Morning Fizz

Morning Fizz: A Lack of Clarity

Caffeinated News & Gossip featuring same numbers, different interpretations.

By Morning Fizz February 15, 2013


Caffeinated News & Gossip

1. Republicans and Democrats are using the very same set of numbers to make the case that this session's package of workers' comp bills is necessary (the Republicans) and unnecessary (the Democrats).

On Wednesday, the Republicans and their leader, renegade Democratic Sen. Rodney Tom (D-48, Medina), noted that only about 30 claims so far, out of 386 in the queue, had been settled. Their point: The option of taking lump sum settlements (as opposed to the traditional ongoing payment system) needs to be made easier. They say their reforms, such as simplifying how time-loss benefits are calculated, would do that.

Meanwhile, liberal labor advocate Sen. Karen Keiser (D-33, Des Moines) pulled out the same numbers—a subset of them—to point out that the current system, set up with a bipartisan compromise bill in 2011, should be left alone. She pointed out that of 53-plus cases from bigger companies that made it to the Board of Industrial Insurance Appeals—the board that decides whether or not the structured settlements are in the workers' best ineterest—40 were rejected. Her point? Private companies aren't offering injured workers very good deals.

Rather than seeing the low approval rate as evidence of a broken system as the GOP does, perhaps it's evidence that the new structured settlement option isn't good for workers.

Keiser noted that the low 24 percent approval rating was not a symptom of a unfair system. Claims against smaller companies that rely on state insurance rather than larger private companies had a 75 percent success rate—15 were approved by the BIIA and only five were rejected.

Rather than seeing the low settlement approval rate as evidence of a broken system, perhaps it's evidence that the new option isn't good for workers.

2. Another stat in the workers' comp debate that Sen. Tom noted this week: The workers' comp fund was supposed to see savings of $335 million since the original reforms kicked in, but only saw savings of $47 million, he says. (Fizz is still waiting on the Republicans for documentation of that claim.)

"I don't think that permits us to say, give us more time," Tom said to reporters this week when pressed on Democratic charges that his caucus wasn't letting the 2011 reforms take effect.

Labor and Industries spokeswoman Renee Guillierie wasn't familiar with Tom's numbers and said the workers' comp fund—at $181 million in the depths of the recession in 2010—has grown to $804 million as of the latest report in late 2012 (vs. $580 million in mid 2012).

She added that by the end of 2013, L&I actuaries estimate another $80 million in savings.

3. Yesterday, the Republican-controlled state senate ways and means committee heard six separate Democratic proposals that would raise taxes to deal with the state Supreme Court's K-12 funding mandate (estimated at about $1.4 billion) and the general fund budget shortfall, about $900 million. The bills ranged from creating an income tax, to instituting a plastic bag tax, to extending beer and B&O surcharge taxes, to narrowing deductions for property and dividends.

The late afternoon hearing—featuring a parade of lefties (pro) and business interests (anti)—lacked the drama and passion of Occupy-era hearings on revenue with both sides delivering what seemed like perfunctory testimony this time around.

Indeed, at one point Sen. Bob Hasegawa (D-11, Beacon Hill), the lefty Seattle senator who was the prime sponsor on three of the six bills, was startled to learn after being questioned by Sen. Ann Rivers (R-18, La Center) during his own presentation that one of his bills—one that would take up the Joint Legislative Audit Review Committee's (JLARC's) recommendations to repeal certain tax breaks— repealed one for nonprofit health care providers on prescription drugs.

"Is that one of them?" he said.

"Some of this stuff is not necessarily what we would want to see," he explained, "it's just they [JLARC] want clarity [on why it's there.]

Hasegawa does have a legitimate point about the lack of clarity on why certain tax breaks exist, though.

All in all, the hearing seemed like a clever political move for the Republican-controlled Majority Coalition Caucus; they gave the opposition a hearing—but by lumping all the proposals together they were able to spin the Democrats as tax fiends: The total hit to taxpayers if all six proposals passed (which no one is recommending) would be $7.9 billion. "My pen ran out of ink," Republican committee member Sen. Michael Baumgartner (R-6, Spokane) said, referring to his attempt to add up the dollars.

Another Democratic revenue proposal—one that's estimated to bring in $1.4 billion a biennium (exactly what the state needs to meet its K-12 obligation this cycle)—was MIA at the hearing: Democratic minority leader Sen. Ed Murray's (D-43, Capitol Hill) five percent capital gains tax proposal.

Murray reportedly didn't get his proposal on the calendar in time.

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