A compromise to cut costs in the Washington’s worker-compensation system eluded House and Senate negotiators tonight. They ended a more than four-hour session of talks with Gov. Chris Gregoire after 8 p.m.
Negotiators return to Gregoire’s at 10 Saturday morning to resume talking. Getting agreement by Saturday may be crucial to lawmakers getting out of town by Wednesday, the 30th and final day of their special session.
That is because a budget must pass, and Senate Republicans may hold back the votes that Democrats to pass a spending agreement for 2011-13. The GOP would not vote for a budget if they cannot get a deal that avoids double-digit premium increases in the worker comp system this year, Sen. Janea Holmquist Newbry, R-Moses Lake, before the last round of talks began.
At issue is how to reduce costs in the worker comp system that could require double-digit premium increases for businesses this year. The Senate had passed a bill that allowed lump-sum payments to close cases for permanently disabled people, but House Democrats were seeking an alternative that saved more than $700 million in the insurance trust fund over four years that didn’t have settlements.
Democratic Sen. Jeanne Kohl-Welles said the governor’s package would be worth $1.25 billion – if already passed legislation to improve the medical responses to occupational injuries is counted.
Gov. Gregoire’s new proposal was a package that included a form of “structured” settlements that require several smaller lump sum payments. How many and how large to make them is one area of disputed, and so is the age at which settlements can be considered.
“Right now they are stuck at 55,” Holmquist Newbry said. “And I don’t think that achieves enough savings on the pension system. That would save $70 million annually compared to the bill the Senate passed out, which was $240 million.” She said a House bill rejected by the majority of House Democrats could save $190 million.”
Most other costs would be saved through reduced benefits, Holmquist Newbry said.
Among those cuts are an end to automatic cost-of-living increases for pension recipients, according to Kohl-Welles.
Costly lifetime pensions and investment losses during the 2008 financial crisis are blamed for reducing the reserves that now require rate hikes of as much as 30 percent for some businesses.
But Senate Majority Leader Lisa Brown, D-Spokane, said the governor’s proposal is a major change to the system that would “stave off rate increases” for businesses.
Talks on a budget deal also continued into the evening. “Our goal is to get the budget decisions wrapped up by the end of tomorrow (Saturday) so the staff can write the bill, everyone can read it and then we can get the votes in the House and Senate,’’ Brown said.
Progress was made on major disagreements such as funding for K-12 schools, universities and health care, Brown said.