Building Industry Association of Washington Turns Up Pressure With Privatization Proposal

by Erik Smith
Staff writer/ Washington State Wire

OLYMPIA, Jan. 22.—The Building Industry Association of Washington, one of the state’s most politically active trade associations, has filed an initiative that would junk the state-run worker’s compensation system and allow private insurers to offer policies instead.

            The measure mirrors a bill introduced in the state House by Republican Doug Ericksen, R-Ferndale, House Bill 2879, which is not expected to get a hearing in the Democrat-controlled Legislature. Democrats have sided with labor interests in opposing changes to the system.

            The initiative goes further than a proposal BIAW has been circulating this session. That proposal would allow private insurers to compete with the state. It has not yet been introduced by sympathetic lawmakers.

            Amy Brackenbury, lobbyist for the organization, said the initiative filed by the organization Wednesday afternoon may not be the final version that the group will take to the voters. But it demonstrates that its talk of an initiative is no idle threat. “We’re open to considering other people’s good ideas, and this is one of them,” she said.

            Filing Follows Announcement

            Fast-rising premium costs have made worker’s compensation a front-and-center issue in this year’s legislative session. Last year the state Department of Labor and Industries raised rates an average 7.6 percent to help cover a $1 billion shortfall in the state fund. But that won’t even come close, says a report from the state auditor’s office. Rates would have to increase by a third to stave off insolvency, the audit says. Which means further increases may be in store for business next year.

            Washington is one of four states that do not allow private competition, and while large employers are allowed to self-insure, about four-fifths of the state’s workers are covered by the state program.

            The filing came after word filtered through the statehouse that Democratic leaders in the House and Senate would refuse to hold hearings or permit votes on worker’s compensation bills favored by the business lobby. A broad coalition of business interests put forward a more moderate proposal for reforms to the state system, and those bills were introduced in the Legislature Tuesday. House Bill 2950 is sponsored by Rep. Jeff Morris, D-Anacortes, and Senate Bill 6638 is sponsored by Sen. Jenea Holmqust, R-Moses Lake.

            Word got around the Capitol by midday Wednesday that the bills would not receive a hearing. BIAW filed its initiative later in the day.

            Democrats Hold Firm

            Meeting with reporters Thursday, Democratic leaders reaffirmed their plan not to allow the business measure to advance.

            “That particular bill is not moving forward,” said House Speaker Frank Chopp, D-Seattle. But he said some of its components might be pushed as separate bills.

            The measure contains one component labor interests say they can’t accept – a provision that would allow employers to offer workers lump-sum settlements. Labor groups maintain employers would use it as a way to settle claims on the cheap.

            But the business bill contains other features that may not be so controversial, including allowing the state and self-insured employers to establish managed-care networks.

            Senate Majority Leader Lisa Brown, D-Spokane, said Sen. Jeanne Kohl-Welles, D-Seattle, will hold a work session on worker’s compensation issues in her Labor, Commerce, and Consumer Protection Committee. But it won’t be a hearing on the business measure – a necessary step for the business bill to advance.

 “In general I don’t think we’ll be having a hearing on a specific bill. But that’s Sen. Kohl-Welles’ call. You’d have to talk to her. A big bill is highly unlikely, but that doesn’t mean any worker’s compensation issues won’t be addressed. Sometimes out of a work session a bill emerges.”

            Labor Ready for War

            Meanwhile, the initiative comes as no surprise to the Washington State Labor Council. BIAW has been threatening to file a ballot measure for months. Kathy Cumming, spokeswoman for the labor council, said the timing suggests that BIAW is attempting to put pressure on the Legislature to take action on business worker’s compensation proposals.