Let's review L&I operations before allowing tax increase

This editorial appears in the Sept. 25, 2009, Yakima Herald-Republic.

When economic times get tough, the moment to reform business operations becomes the most opportune. It's a time to question past assumptions and arrive at a more rigorously disciplined enterprise.

Somehow the state's Department of Labor & Industries doesn't believe in that philosophy. The guiding principle there seems to be to keep adding revenues and charge ahead, no matter what the cost is to others.

With the nation still wallowing in a recession and the state's economy feeling its ill effects, L&I has considered it a prudent practice to raise workers' compensation taxes 7.6 percent, or nearly $120 million, for 2010.

For argument's sake, let's don't even consider the deleterious effect this rate increase will have on struggling businesses in this state. Instead, let's look at L&I's current track record and see if more revenues are warranted.

Already the state's workers' comp benefits package is the second highest per employee in the nation. While businesses have done an admirable job of making their workplaces safer and have resulted in a 55 percent reduction in claims being filed since 1990, costs to manage those claims have gone through the roof. In this past year alone, those costs have climbed 28 percent, or $39 million.

Then there's the lifelong pensions this state awards. Washington leads the nation with a rate that has skyrocketed by more than 300 percent since 1996.

What these statistics cry out for is not what L&I wants: added revenue. They cry out for reform, from top to bottom.

These reforms are easy to spot. Take lump sum settlements, for instance. Washington is one of six states that doesn't allow them.

"Washington is one of the few states which prevent employers, employees and L&I from settling claims for a lump sum, which has proven to be a successful way to resolve claims," said state Sen. Curtis King, R-Yakima. "This is just one of several ideas for trimming the program's expenses. Instead of focusing solely on refilling state coffers, lawmakers and others should view this as an opportunity to fix the system and reduce costs without reducing benefits that injured workers need most."

The assumption that the workers' comp system needs additional revenues without a comprehensive review of its expenses is foolish and harmful to the state's business community. L&I needs to get a grip on expenses before getting one cent of new revenue.

L&I is scheduled to hold public hearings before seeking to institute the rate hike in November. We urge lawmakers to push this process off the table and review the way L&I operates when the Legislature reconvenes in January.

That makes the most sense. Let's hope this time reason wins out over revenue.

* Members of the Yakima Herald-Republic editorial board are Michael Shepard, Bob Crider, Spencer Hatton and Karen Troianello.