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    March 11, 2008 - 1:21pm

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    FOR IMMEDIATE RELEASE
    March 11, 2008

    MEDIA CONTACTS
    Mollie Hammar, PR Director, mhammar@wsfb.com (360) 528.2915
    Dan Fazio, Employer Services Director, dfazio@wsfb.com (360) 360.528.2917

    Washington Farm Bureau Urges Speaker Chopp to Stop Workers' Compensation Fund Diversions
    In a letter to House Speaker Frank Chopp, Washington Farm Bureau has detailed $13.39 million in new misappropriations of workers' compensation (comp) trust funds in the 2007 - 2009 budget cycle and proposed a three-part plan to end the diversions.

    On March 6, in an effort to halt yet another attempt to divert $1 million from state Industrial Insurance funds, Rep. Cary Condotta (R-East Wenatchee) made a rarely-used motion to move House Bill 3387 - Preventing Workers' Comp Fund Diversions - directly to the floor for a vote. The motion failed on a party-line vote, with Democrats claiming it was merely a "procedural" vote and the underlying bill did not need to be brought to the floor. Farm Bureau's letter to Speaker Chopp outlines the organization's dismay at this party-line vote and calls for an immediate stop to this ongoing misuse of funds.

    "By law, workers' comp premiums are supposed to be used to pay benefits for injured workers," said Dan Fazio, Washington Farm Bureau's Director of Employer Services. "This ongoing misuse of funds sets a dangerous precedent and increases the likelihood that workers' comp and unemployment insurance funds will be raided next year, and the year after that, with no end in sight."

    HB 3387 would require that industrial insurance funds be spent for purposes solely related to the payment of benefits to injured workers or the administration of the workers' compensation system. The bill would allow impacted ratepayers, both employers and employees, to file suit to stop the illegal diversion, and provide a steep penalty, if a court found that the Department of Labor and Industries (L&I) is improperly using the funds.

    Washington Farm Bureau believes funds held in the workers' comp accounts are trust funds - a specific legal term meaning that they are held for a specific purpose. The organization adds that the Governor and the director of L&I have a fiduciary responsibility to protect these trust funds for the beneficiaries of the trust - injured workers. Not only are they not protecting the interests of these injured workers, but the Governor is actually accelerating the diversions. Recent examples of fund diversions include funding to begin building the Paid Leave program, more farm labor contractor inspectors, apprenticeship programs, and this year, a new employment program for victims of domestic violence.

    Last year, L&I raised workers' comp rates by $58 million. If there were no diversions, a rate hike probably would not have been necessary. Of course, lawmakers don't want to end the diversions - they are already unable to fund all the promises that they have made to various special interest groups, and the more they can take from the workers' comp funds, the more they can spend on other programs.

    Farm Bureau anticipates huge budget deficits next year and more pressure to divert money from both the workers' comp trust fund and the unemployment insurance trust fund. And so, Farm Bureau is asking legislators to implement this three-step plan:

    1. Stop the Bleeding. Lawmakers should immediately cease further misappropriations.
    2. Determine the Scope of the Problem. Farm Bureau believes that diversions exceed $50 million per year, while others think it is a lesser number - $10 million or so. A judge or arbitrator needs to be brought in to rule on the size of the problem.
    3. Commit to a time table to end the diversions. Depending on the size of the problem, it could take up to four years for lawmakers to wean themselves off these funds.

    To view Washington Farm Bureau's letter to Speaker Chopp and data related to the ongoing diversion of funds, go to www.wsfb.com/employers/employerservices/08-labor-issues.

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    Washington Farm Bureau is a 35,000-member advocacy organization representing family farmers and ranchers across the state. For more information about the Washington Farm Bureau go to www.wsfb.com or call 1.800.331.3276.

     

    FOR IMMEDIATE RELEASE

    March 6, 2008

    MEDIA CONTACTS
    Mollie Hammar, PR Director, mhammar@wsfb.com, (360) 528.2915
    Dan Fazio, Employer Services Director, dfazio@wsfb.com, (360) 951.8641

    Washington Farm Bureau Urges Legislature to Stop Diversions of Workers' Comp Funds
    LACEY - Each year nearly $60 million of workers' comp trust fund assets goes to places other than the industrial insurance division at the Department of Labor and Industries (L&I). Although the workers' comp trust fund was established to assist injured workers, that technicality hasn't deterred creative legislators from repeatedly diverting the funds.

    Employers and workers contribute equal premiums into two of the three funds that make up the workers' compensation system - the Medical Aid Fund and the Supplemental Pension Fund. However, the third program, the Accident Fund, is bankrolled solely by employer-paid premiums.

    "Guess which fund gets used the most for diversions?" quipped Dan Fazio, Farm Bureau's Director of Employer Services. "Nearly 90 percent of the money used to create these new programs is taken from the workers' comp accident fund, meaning small to mid-size employers are left footing the majority of the bill."

    It is difficult to determine how much each potential injury will cost, and impossible to project how many people might become injured in any given year. Thus, by design, there is an excess in the workers' comp accident fund, meant to ensure that money is readily available to injured workers who need it. In recent years Legislators have discovered this ‘pot of gold' and have been raiding it to fund new, unrelated programs.

    Using workers' comp funds to finance unrelated programs should be considered illegal. And, in circles outside of the legislative arena, it is. Yet, year after year the Legislature continues to raid the fund for unrelated programs without consequence. "Given next year's pending budget deficit, the time to put a stop to these unscrupulous raids is now, before the Legislature starts to view these funds as their problem-solving piggy bank," Fazio warned.

    In an attempt to stop this ongoing abuse, House Bill 3387 (HB 3387) will be brought to the House floor for a vote Thurs., March 6. This bill would stop the misappropriation of workers' comp trust funds.

    Sponsored by Rep. Cary Condotta (R-East Wenatchee), HB 3387 would require that workers' comp trust funds be spent for purposes related to the payment of benefits to injured workers or the administration of the workers' compensation system. The bill would allow impacted ratepayers to file suit to stop the illegal diversion, and provide a steep penalty, if a court found that L&I is improperly using the funds.

    Last year the Legislature used workers' comp trust fund money to bankroll the hiring of additional farm labor contractor inspectors. The Legislature has also used money from the fund to finance the hiring of minimum wage inspectors and create new apprenticeship programs. This year the Legislature is considering raiding the fund to finance inspectors for a new domestic violence bill. None of these programs or ideas relate to helping injured workers get better.

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    Washington Farm Bureau is a 35,000-member advocacy organization representing family farmers and ranchers across the state. For more information about the Washington Farm Bureau go to www.wsfb.com or call 1.800.331.3276.