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January 7, 2010


Jan. 6: Forum Jan. 12 on labor's future

Jan. 5: Casa Latina, WSLC team up

Jan. 4: Legislative Updates start Friday

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Thursday, January 7, 2010

 
L&I: State's workers' comp system is sound

Judy Schurke, Director of the Department of Labor and Industries, responds to an "alarmist, misleading" editorial in Wednesday's (Tacoma) News Tribune that suggested the state-run workers' compensation system was in danger of insolvency. "The fact is the state’s workers’ compensation system is sound," writes Schurke. "L&I carefully estimated how much money it needs to fund the workers’ comp system in 2010. We deliberately decided to keep premiums as low as possible this year as we come out of the worst economic recession in over 70 years. Read more.

►  Also see -- Washington's workers' compensation advantage -- The gap between the negative rhetoric and the truth about our state-run workers' compensation costs is shocking. Not only do we have comparatively low premiums, by the national measure most often cited, the system's costs to employers in Washington state are the fifth lowest of any state in the nation.

►  From L&I -- L&I's anti-fraud program saves $128 million, up 3% from a year ago -- It includes recoveries of payments made as a result of fraud, inadvertent overpayments to injured workers and health-care providers, and employer payments for delinquent or falsely reported premiums.

 

Democrats' plan: Furloughs, outsourcing, business tax cuts

►  In today's Olympian -- State to consider state employee furloughs -- Senate Majority Leader Lisa Brown says lawmakers likely will look for immediate cuts before moving ahead with a revenue package, and that cuts to the state payroll could be part of that action. “Personally, I think furloughs might be a good way to go. It’s temporary. You save the jobs,” Brown said. She added that she wants a conversation with the WFSE leadership. “I would like to work with the federation and with state employees knowing that there are jobs on the line,” Brown said. “I would like to work with them on what they think are the least-worst options.”

►  From AP -- State legislators, governor talk reforms -- House Ways and Means Chairwoman Kelli Linville (D-Bellingham) says she was personally open to major reforms, including privatization of technology services, printing, and even the state monopoly on liquor sales: "At this point in time, in our economy, I think (liquor)'s something that the private sector can do as well or better than we do -- as long as we tax the heck out of it and regulate the heck out of it. We don't actually have to do the job."

►  At SeattlePI.com -- Should cash-strapped state outsource more work? -- Gov. Chris Gregoire's administration says that claims by business-funded think tanks that state government doesn't currently do extensive private contracting are false. But Rep. Ross Hunter (D-Medina) says the state should do more to save money and balance the budget. Rep. Reuven Carlyle (D-Seattle) agrees, recently writing that "I believe it is time for state government to consider outsourcing key aspects of the liquor business, for example, as well as some of its licensing, printing and technology functions."

►  In today's Kitsap Sun -- Gig Harbor's Kilmer leading job-creation efforts in Senate -- Senate Majority Leader Lisa Brown says Sen. Derek Kilmer (D-Gig Harbor) will take the lead on a host of bills designed to give tax breaks to businesses and offer other ideas to boost the economy.

►  In today's Everett Herald -- Gregoire hopes help from feds can head off tax increases -- If more federal money comes, the governor says she may not have to seek new tax revenue and can instead erase the budget’s red ink by spending less, draining reserves.

►  In the (Aberdeen) Daily World -- Lawmakers offer thoughts on what could be tough session -- Local legislators offer a stark view of the budget and ideas on how to increase revenue. As for creating jobs, they say the focus will be on supporting local stable companies that offer lasting family-wage jobs. “We will break our necks to support you here,” says Sen. Jim Hargrove (D-Hoquiam). “We will listen to you more than we will listen to Boeing or Weyerhaeuser.”

►  In the Everett Herald -- 2010 marks economic crossroads for our state (John Burbank column) -- It is odd when a leading politician (Snohomish County Executive Aaron Reardon, a Democrat) publicly declares that his state is not competitive, especially when that state, our Washington, is ranked by Forbes magazine as the second-best state for business. We achieved that ranking because our labor force is well educated, and more and more people are migrating to Washington. We are ranked No. 1 for future growth, thanks to “projected job, income and gross state product growth as well as business openings/closings and venture capital investments.” Yet Aaron Reardon suggests we embrace a race to the bottom, reducing wages and benefits while giving away more and more tax credits to global corporations. What's next? Slash our minimum wage? Charge parents for K-12 education?

 

Other legislative news:

►  In today's Yakima H-R -- Seniors sick of program cuts -- Proposed cuts to services scare local seniors who on Wednesday registered their displeasure with the austere state budget announced by Gov. Chris Gregoire. In Yakima County, the cuts would amount to $300,000 this year and would include eliminating a day program for developmentally disabled adults.

►  In today's tri-City Herald -- Possible cuts worry Tri-City seniors -- Local seniors are speaking out to prevent billions of dollars in services from being cut from the state budget later this year.

►  In today's Seattle Times -- Bellevue attorney expected to fill Senate seat -- Officials expect Randy Gordon to be appointed to former state Sen. Fred Jarrett's seat after the Bellevue attorney won the support of most of the 41st District Democratic precinct-committee officers.

►  At HorsesAss -- 520 bridge project rife with opportunities (by Sen. Ed Murray) -- If we fail to come together as a region on this crucial project, I believe we will destroy the coalition that moved our transportation system forward and return to the defeats we suffered in years past.

 

Boeing news:

►  Today from Bloomberg -- Pentagon altering request for tanker proposals -- The Air Force's preliminary request for proposals on a $35 billion program to replace its refueling tanker fleet is being reviewed and changed after comments from bidders and lawmakers. Northrop Grumman/Airbus said it wouldn't compete against Boeing for the contract unless the draft request was amended. Boeing expects "no significant changes" to the draft. 

►  In today's Seattle Times -- Boeing promotes 9 to refocus on "engineering excellence" -- Boeing has come in for heavy criticism, particularly from SPEEA, for ditching its engineering-focused culture in favor of an emphasis on marketing and cutting costs in the development and manufacturing of airplanes. In the union's newsletter last month, SPEEA President Cynthia Cole wrote that engineers "are treated as costs to be cut or at least contained."

►  At SPEEA.org -- Boeing withdraws proposed retroactive withdrawal, but questions remain -- SPEEA secured several improvements to proposals to change the Learning Together Program. One key improvement is elimination of most of the retroactive elements, meaning represented employees will not need to repay any money for classes already taken or started.

►  In today's Everett Herald -- Boeing hit 2009 jet delivery goal, likely trails Airbus -- Boeing handed  over 481 aircraft to customers last year. After several years of record jet orders, Boeing logged 142 net orders last year as airlines and freight companies saw a huge decline in air traffic.

 

Health care reform news: 

►  In today's NY Times -- Obama urges tax on high-cost health insurance -- The White House supports the Senate proposal to impose a 40% excise tax on the cost of individual policies above $8,500 and on family policies above $23,000, with higher thresholds for retirees and employees in high-risk fields like police officers. House Democrats have resisted the idea, which is also strongly opposed by many organized labor groups, because the tax may hit a number of more generous union-sponsored health plans.

►  At HorsesAss -- Republicans target Rep. Adam Smith on health reform -- U.S. House Republican Whip Eric Cantor has sent out a memo naming the 37 Democrats who voted for the House health care reform bill, but who he believes can be persuaded to vote against final passage. And our very own Rep. Adam Smith (WA-9) is listed amongst them.

 

Local news:

The Olympian photo -- click to enlarge►  In today's Olympian -- Logs give boost to Port of Olympia -- The port's marine terminal had a banner year last year, with ship visits rising more than 600% compared with 2008, year-end data show. Preliminary data show the terminal generated $2.64 million in operating revenue, up from $1.62 million in 2008. Dockworker hours doubled in the same period, increasing to 29,806 hours from 14,248 hours.

►  In today's Seattle Times -- Forecasters see Washington as among best in the West for 2010 -- The state gets generally good marks in the new Western Blue Chip economic forecast.

►  In today's Yakima H-R -- Appeal to county workers: Budget will disappear... if all raises do, too -- Two county commissioners write personal checks to return their 2010 pay increase and are hoping employees will share some of their wage increases to fill a $1.1 million budget hole.

►  In today's Everett Herald -- County office's past sexual complaints come to light -- Long before he was fired for exposing himself on a golf course, Snohomish County’s former planning director and his staff were at the center of complaints about sexual harassment. Nothing happened.

►  In today's Bellingham Herald -- Worker dies in accident at Edaleen Dairy near Lynden -- Deputies were called to the dairy after a large, overhead door fell onto Nick L. Spoelstra, 30, killing him.

  

National news:

►  From the SF Bay-Guardian -- New year, same struggle for San Francisco hotel workers -- The workers’ contract at the 61 union-represented city hotels expired in August and now, five months later, owners and labor are still at odds over health care and retirement benefits. The union’s proposal would increase labor costs by 1.5% over a one-year period, something it says is essential to maintain the benefits for workers and their families they’ve fought to win in the past. But it has been summarily rejected by management, who cite economic hard times.

►  In today's Detroit News -- Labor Department unveils $100 million in green jobs training grants -- The grants, funded by the $787 billion stimulus, support training programs to help dislocated workers, veterans, women, African Americans and Latinos find jobs in green industries.

►  From AP -- Jobless claims data signal job gains are near -- The sharp drop in first-time claims in recent months as well as other signs of improvement have caused some economists to predict small job gains in December. If so, it would be the first net increase in jobs in two years.

►  At Huffington Post -- Who can you trust? Tom Daschle, Michael Chertoff, Barry McCaffrey, Robert Rubin or... an airline employee? (by Janine Wedel, author of Shadow Elite) -- Can we have the same faith in public experts to speak and operate in our interest as I had in the airline employee? There was a time when Americans could have more confidence in the objectivity of the experts who advised government and pronounced on issues of vital importance. Roles of influencers and powerbrokers were better defined and more stable, not unlike the airline employee whose unambiguous job was to help me and other passengers.

 

THURSDAY, JANUARY 7, 2010
L&I: Workers' comp system
is sound
State responds to "alarmist, misleading" TNT editorial implying insolvency

The following was written by Judy Schurke, Director of the Department of Labor and Industries, in response to an editorial in Wednesday's (Tacoma) News Tribune suggesting that the state workers' compensation system was in financial peril:

A News Tribune editorial, “Workers comp audit should set off alarms,” (Jan. 5) left the mistaken impression that the workers’ compensation system may soon become insolvent. The editorial also questioned the way the Department of Labor & Industries estimated how much money it will need to operate.

These assertions are alarmist and misleading.

The fact is the state’s workers’ compensation system is sound. It will continue to provide important medical, time-loss and pension benefits to workers when they’re injured on the job and insurance protection for employers from costly claims and litigation.

L&I carefully estimated how much money it needs to fund the workers’ comp system in 2010. We deliberately decided to keep premiums as low as possible this year as we come out of the worst economic recession in over 70 years. We know that businesses are struggling to meet payrolls and stay open.

We also didn’t want to overreact to temporary conditions in the economy by charging businesses too much. This was a deliberate and well-thought-out decision. We worked with the Workers’ Compensation Advisory Committee and business and labor, held hearings around the state in a deliberate and transparent process, and conducted a comprehensive review of our investment portfolio with our economic advisers.

How were we able to keep the rate increase at only 7.6 percent? We were able to do this by drawing down our contingency reserve, which is like a rainy day fund. We and others felt this was the right thing to do given the state and national economic climate.

The claim in the News Tribune editorial that funds in the workers’ comp program may become insolvent confuses a negative contingency reserve balance with financial insolvency of the whole system. It’s important to recognize that the contingency reserve is only a fraction of the system’s current total assets of $11 billion.

Drawing down the contingency reserve is not unprecedented in Washington. Over the years, the department has used it to keep workers’ comp premiums stable and predictable, as required by the Legislature. In fact, the contingency reserve has fluctuated from a high of more than $2 billion to below zero, depending on the economy. When it has been unusually high because of robust investment returns, we have returned hundreds of millions of dollars to employers and workers. In 2007, we returned $350 million.

We also take issue with the suggestion that we lowballed the anticipated shortfall in one of our benefit funds. The auditor’s report uses much more conservative results on our investment yields – 4.2 percent vs. our assumptions of 5 to 5.5 percent. Our estimates are consistent within our actual historical yields.

This is a prudent assumption because our investment portfolio, beginning in January 2008, was restructured to be less exposed to volatile stock market fluctuations and more invested in federal securities and investment-grade bonds.

If you are hurt on the job today, the 98-year-old workers’ comp system in our state will be here to provide your medical and time-loss benefits and we will be here to provide insurance coverage for all employers. We’ve been here in the past and we’ll continue to support Washington’s 2.5 million workers and 171,000 employers in future.

We welcome serious discussions about Washington’s workers’ comp system and any changes to it. It’s important that these conversations be based on accurate information.

Judy Schurke is director of the Washington State Department of Labor & Industries in Tumwater.

 

Copyright © 2010 --  Washington State Labor Council, AFL-CIO