March 12, 2010
To: Northwest Council Members
From: Northwest Legislative and Public Affairs Committee
Subject: PRESUBMITTED
NEW BUSINESS: OPPOSITON OF INITIATIVE MEASURE 1067, AN
INITIATIVE TO FORCE THE PRIVITIZATION OF THE WASHINGTON STATE INDUSTRIAL
INSURANCE (WORKERS’ COMPENSATION) SYSTEM.
Background
The Washington State Department of
Labor and Industries (L&I) administers Washington’s workers’ compensation
system which was created in 1911. This system provides insurance coverage for
employers and workers through either the State Fund or through self-insurance
for some of the largest employers. The State Fund covers the vast majority of
Washington State employers – about 171,000 – and approximately 2,570,000
workers. Employers pay premiums to L&I for their workers’ compensation
coverage. Their workers pay a significant share of the premiums – about
one-fourth. This coverage pays medical expenses for workers who suffer
job-related injuries or illnesses and, when workers are unable to work due to
these conditions, partially replaces their lost wages. This no-fault system
also protects employers from lawsuits that could otherwise result from
job-related injuries and illnesses.
From
the Washington State Secretary of State’s office:
Ballot
Title
Statement of Subject: Initiative Measure No. 1067 concerns industrial
insurance.
Ballot Measure Summary
This measure would establish a joint legislative task force on industrial
insurance privatization consisting of sixteen members: eight legislators, five
representatives of business, two representatives of insurers, and one
representative of labor. The task force would be directed to develop proposed
legislation that would eliminate the state industrial insurance fund by
December 1, 2011. Task force recommendations would be provided to the
legislature by February 1, 2011. The legislature would provide staff and budget
support.
This
initiative, from the Building Industries Association of Washington (BIAW),
mandates a forgone conclusion that an insurance system established to provide
for working men and women when they are injured on the job would be best run by
private insurance companies, no matter what the task force may discover in its
investigation. This is not a rational
approach to concerns about cost and the health and welfare of workers.
The
workers’ compensation system here in Washington State has among the lowest cost
programs in the nation and among the highest benefits to workers so why does
anyone think there is a drastic problem with our system that requires such an
extensive measure as to have other insurance companies manage the program? Have the insurance companies demonstrated any
better performance? As one example, look
at what the insurance companies did to California’s workers’ compensation
system. The people of California had to
bail out the irresponsible insurance companies in that state at a cost of
billions of dollars.
The
initiative is legally questionable and likely in violation of Washington State’s
constitution which means that if it passes we will be spending millions of
dollars of our tax money to litigate this initiative.
The
initiative is also undemocratic as it creates a task force with five
representatives from the business community, two from insurance companies and
only one from labor.
For more information:
Washington
State Department of L&I Facts about workers' compensation:
http://www.lni.wa.gov/news/2009/qa091015a.asp
Washington State Labor Council: http://www.wslc.org/reports/Outside-EC2.htm
Secretary of State’s web site for initiatives: http://www.sos.wa.gov/elections/initiatives/people.aspx
Building Industries association of Washington (BIAW): http://www.biaw.com/
Motion
It is moved that: THE NORTHWEST COUNCIL OPPOSES INITIATIVE 1067 (I-1067) AND THEREFORE ENCOURAGES SPEEA MEMBERS, AND ALLOWS THE
NORTHWEST L&PA COMMITTEE, THE LABOR DELEGATES AND SPEEA STAFF TO OPPOSE THE
PASSAGE INTO LAW OF I-1067, AND TO EDUCATE, ENCOURAGE, AND PRESENT MATERIALS TO
OTHERS IN ORDER TO ULTIMATELY BRING ABOUT THE DEMISE OF THIS INITIATIVE.
PRO
1. The measure is undemocratic and
subrogates the health, welfare and interests of the workers in this
state to those of costs to businesses.
2. The measure is so poorly written and poorly
conceived that it will be contested in court if it is passed
at a cost to us of millions of dollars.
3. Our state has a low cost system that
both the workers and businesses pay into.
The system is well
run and provides good benefits and assistance
to injured workers. The system doesn’t need to be
wrecked by handing it over to insurance
companies whose only interest is in making a profit.
CON
1. Some members believe that competition
will bring about lower costs and better benefits.
2. Some members will feel we have no
interest in this issue as Boeing is a self-insured business.
3. Some members
may believe that the system is abused too much.