Dear Friends and Neighbors,
Last week, we voted on a supplemental operating budget fix, House Bill 1086, to close the books on the remainder of the fiscal year which ends June 30. Unfortunately, it fails to bring us into balance and it resembles the House supplemental budget passed earlier this session (I voted against both proposals). It continues to take money retroactively away from school districts who have already hired teachers in grades K-4; relies on budget gimmicks; and only chips away at programs we know have to be eliminated in order to fill the larger, $4.6 billion shortfall for the 2011-13 biennium.
This budget proposal only cuts about $365 million and leaves a shortfall of about $250 million. This is the same “kick the can down the road” approach we have been using. Now it looks like we are kicking the can into the next biennium. In fact, one of the options they are considering is moving the remaining shortfall into the next biennial budget.
House Republicans are ready to make the tough decisions. We must eliminate entire programs in the next two-year operating budget; why not do it now and capture the savings sooner? Why pay for programs today that we can't afford tomorrow? We must use this as an opportunity to reduce the size of government rather than simply reduce programs until they become completely ineffective.
The workers' compensation system, like the unemployment insurance system, must be addressed. As the lead Republican in the House on business and labor issues I am actively working on overdue reforms to the workers' compensation system. We are working on legislation that would:
- modify the definition of occupational disease for purposes of industrial insurance to require that the disease arise out of and in the course of the particular employment and meet other criteria;
- limit the time for filing occupational disease claims; and
- authorize voluntary settlement agreements regarding any or all aspects of industrial insurance claims under certain conditions, something that both employers and employees are seeking.
Consider these facts:
Program is costly, insolvent – A recent state audit of the solvency of the workers' compensation system detailed how it has more than a 70 percent chance of insolvency within two years. Additionally, according to the 2010 financial statements from Labor and Industries (L&I), the workers' compensation system collects $1 for every $1.61 paid out in claims.
Workers' compensation rates rise – L&I increased workers' compensation premiums for 2011 an average of 12 percent, bringing $190 million new dollars into the system, a portion of which comes out of employees' pockets. This is on top of a 7.6 percent increase last year. Washington state businesses pay one of the highest rates in the nation, second only to Alaska.
Worst in the nation – To put the 12 percent rate increase in context, based upon a survey of National Council of Compensation Insurance (NCCI) rate filings and news sources, 12 percent is the highest 2011 workers' compensation rate increase in the country. By contrast, California's state fund announced a 5.2 percent rate increase this year and California is a fiscal disaster. The next highest to us is Florida, at 7.8 percent, but that is in the context of a cumulative 60 percent rate decrease since reforms were enacted in that state in 2003. The majority of other states are seeing either no increase or a slight reduction in 2011. In competitive states, the soft economy continues to keep rates low. In Washington, we've had a cumulative rate increase of 66.4 percent since 2003.
If we want to turn our economy around, we must get serious about addressing failing state agency programs like workers' compensation by putting in place reforms that not only help our employers retain and hire more people, but provide the best assistance to our employees.
I have two consumer protection measures working their way through the legislative process. Just about everyone has dealt with an overzealous television company or business. I introduced House Bill 1534 due to a situation where a seller required a customer to capture card information for future payments as a condition for paying with the card. The bill is intended to prevent businesses from capturing credit card information if a customer does not want it used for future payments.
The other bill, House Bill 1535, relates to personal guarantees. I was a small business owner for almost thirty years. Toward the end of my small business career, it became concerning what I was finding out about personal guarantees. Many of the them can make someone personally liable for a debt in the fine print of a contract. This legislation would require personal guarantees to be more obvious and not in areas of contracts that seem to be inconspicuous. The bill sailed through the House Business and Financial Services Committee unanimously. However, I have recently become aware the Washington State Bar Association has come up with a number of reasons to oppose this bill. We will keep you posted.
Wisconsin Democrats set poor example
Finally, I am sure many of you are following the situation in Wisconsin with the collective bargaining battle between unions and Wisconsin Governor Scott Walker. Many states with budget problems would like to rework collective bargaining agreements to help make ends meet in these difficult times. Whether you agree with Governor Walker or side with the public sector labor unions, I find it deplorable how the Democrat lawmakers have handled this situation. I have been in Olympia for eight sessions and watched the majority party pass piece after piece of legislation benefiting the labor unions, while not taking into consideration the ramifications on the state budget, employers, or the private sector. Not once did I, or members of my caucus get up and walk out because we didn't agree. We followed the process – introduced opposing legislation, offered amendments, and worked to shine light on our sides of the argument. That is what you do when you are in the minority.
The legislators in Wisconsin should not have gone into hiding. Those lawmakers needed to stay in their offices and do the work they were elected to do – not run away. Try to sit down and work out an agreement, offer amendments, find common ground, but don't run for the hills when things get tough or don't go your way.
Wenatchee Legislative Wake-up Call Forum
Date: Tuesday, March 1, 2011
Time: 7:00 – 8:00 a.m.
Place: Banner Bank
501 N. Mission St.
Wenatchee, WA 98801
During the 2011 legislative session, Washington Policy Center (WPC) is bringing the debate over taxes, the budget and the future of our state to Wenatchee
. Join the WPC for this hosted breakfast with updates on the top issues of the legislative session. This is your chance to be connected live to Rep. Armstrong and I in Olympia and give us your ideas and feedback on the issues you are concerned about most.
To RSVP for this hosted breakfast, contact Chris Cargill at 509-570-2384 or email@example.com.
Thank you for allowing me to serve you.