It's all politics with ESSB 6035 "Retrobution" By Jan Teague, President/CEO
Last Thursday the Senate passed a bill by a 25 to 24 vote that everyone knew was purely politics. Known as "Retrobution", the bill tries to damage the Building Industry Association of Washington and its Retro workers' compensation program. There is no business group in support of this bill and most legislators agree that Retro is a good program. So how come a confusing, bureaucratic bill can pass out of the Senate?
The bill is supposed to provide enough information for trial attorneys to file lawsuits against the Building Industry Association, plain and simple. They can't get this information in enough detail right now to determine if they can file and win a lawsuit. But providing reams of information to the state will clear the path for expensive litigation that will ultimately cost all of those in a Retro.
I was disappointed that those Senators who voted for the bill would not wait for the results of the $600,000 Retro study authorized last session. I would not call this study "just a study bill" with that price tag. Clearly, if there are legitimate reforms needed for a program considered by legislators to be valuable, then they should be waiting for results that will be out in time for next session.
But instead politics won the majority vote in the Senate. A very confusing set of reports would be required every year that would be an enormous amount of paperwork on both the part of the agency and the association. The cost of doing these reports and the time it would take to do them is anticipated to create a lot of confusion. No one in the business community wins with this bill, yet that was not a consideration. While it is not a tax, it is an increase in the costs for the program and a decrease in the potential refunds that would have to cover the added costs. It's a very bad time to give business yet another hit in their pocketbook. The bill now is in the House for further consideration.
One of my Board members put it quite clearly; "It sounds like micromanaging to me". I agree completely considering the level of detail that Senators want reported to the state. The will would require reports to the state with reports and authorizations of reports from the members. There is so much that would have to be handled that it would be a bureaucratic mess without any productive outcomes. (Unless you ask the trial attorneys if they got anything they can use in court.)
Policy analyst bemoans delay in greenhouse gas bills
A policy analyst interested in greenhouse gas emissions reductions has expressed frustration that the overriding state budget crisis is slowing down progress on reducing emissions in Washington State.
Kim Drury, Senior Policy Associate for the Northwest Energy Coalition, spoke this week to a citizens advisory committee in the state Attorney General's Office. The Washington Retail Association is a member of that committee.
Senate bill 5735 that sought to require companies to reduce such emissions has been heavily amended to slow down implementation of requirements.
Due to the recession, "it is unnecessary at this time to adopt new regulatory limits across significant sectors of emissions sources," the amended Senate bill now reads. A hearing is scheduled on the bill in the House of Representatives this week.
The amended bill directs the Department of Ecology to make recommendations to the Legislature by December of 2010 on whether to delay new regulatory standards. The original bill, known as "cap and trade", would have placed a limit on emissions while allowing businesses to trade for the rights to emit greenhouse gases with those that had reduced their emissions.
Businesses, including the Washington Retail Association, opposed the original bill as too expensive for businesses to respond to in a recession. Also, Congress is considering similar legislation that would only cause confusion for Northwest businesses, WRA has said.
Sen. Janea Holmquist during Senate debate this year has said the original bill would discourage companies from moving to Washington because of the additional equipment costs to comply with its requirements.
An editorial in this week's Centralia Chronicle argued the state could not afford greenhouse gas emissions reductions in the current weak economy.
"It would increase the cost of energy and put our state's businesses at a competitive disadvantage when attempting to retain or attract jobs with states that do not have cap-and-trade regulations," The Chronicle wrote. "In light of today's economic environment and the need for jobs in this state, this Legislative session is clearly not the time to be the leader in cap-and-trade."
Drury acknowledged the state's $8.3 billion revenue shortfall is taking priority over other policy initiatives in this Legislative session.
"It's all budget all the time," she told the committee, whose members track legislation and serve as consumer advocates in utility rate cases.
The Northwest Energy Coalition promotes energy conservation, low-income energy assistance and development of renewable energy sources.
Drury said a delay in approving greenhouse gas emissions reduction requirements would not save consumers or businesses money. She maintained that global warming is a growing problem that must be addressed and the costs to do so will rise over time.
"Nothing is saying we don't have to do this," Drury said. "What do we gain by delay except more costs?"
Dammeier's constituents want a tight rein on spending
A telephone poll last week by Rep. Bruce Dammeier (R-Puyallup) shows his District 25 constituents want the Legislature to control spending rather than increases taxes to address the $8.3 million revenue shortfall.
Dammeier released the results of his telephone poll in a newsletter this week.
Here are the results for the three poll questions:
What issues do you see as most important for our district?
*54 percent, controlling state taxes and spending *26 percent, strengthening education *10 percent, improving transportation *10 percent, access to affordable health care
Do you support a new state income tax?
*90 percent, no *6 percent, yes *4 percent, not sure
How do you believe the state should handle its $8 billion budget shortfall?
*61 percent, cut state programs and services *29 percent, a combination of both *7 percent, not sure *3 percent, raise taxes
Source: Rep. Dammeier's office
Sales taxes to increase for commuter rail, bus service
Sales taxes will increase on April 1 in King, Pierce and Snohomish Counties.
The Regional Transit Authority (Sound Transit) sales tax will increase on that date from five-tenths of one percent to nine-tenths of one percent.
Voters approved the increase last November to expand and coordinate light-rail, commuter-rail and express bus service, and improve access to transit facilities in King, Pierce and Snohomish counties. The rate increase applies to the majority of urban areas in the three counties.
After the rate increase, overall general sales tax rates will be 9.5 percent in King County, 9.4 percent in Snohomish County and 9.3 percent in Pierce County.
The Department of Revenue provides a sales tax rate lookup tool accessible from dor.wa.gov. Click here to access a publication showing tax rates for all locations.
Questions about the rate change also may be directed to a Revenue toll-free hotline, 1-800-647-7706.
Source: Department of Revenue
Federal employee gag bill introduced Retailers urge defeat of the bill
The National Retail Federation urged defeat of a federal "card check" bill introduced into Congress earlier this month.
The federal Employee Free Choice Act would take from employees the right to a secret ballot to determine the outcome of union organizing campaigns.
"Secret ballot elections are a cornerstone of American democracy," said Rob Green, the National Retail Federation's Vice President for Government and Political Affairs. "Voters have a secret ballot when the go to the polls on Election Day, Congress has a secret ballot when lawmakers choose the leaders of the House and Senate, and we believe workers deserve a secret ballot when they choose whether to be represented by a union."
NRF has launched a Website to provide information about the federal bill, sponsored by George Miller, D-Calif., House Education and Labor Committee Chairman, and Tom Harkin, D-Iowa, a senior member of the Senate Health, Education, Labor and Pensions Committee. President Barack Obama also has pledged his support of the bill.
The Retail Industry Leaders Association also is actively lobbying against the bill across the country, including targeting campaigns in states including Pennsylvania, North Dakota, Arkansas, Nebraska and Colorado. The campaign includes editorial page opinion pieces, direct mail and paid advertising highlighting the ills of the bill for business.
Besides robbing employees and employers of the voice in union organizing campaigns, the bill would increase business costs in the midst of a deep national recession. This would make it harder for businesses to survive and increase layoffs.
Source: National Retail Federation
"Card check" would lead to layoffs, new study concludes
Unemployment would rise if Congress approved the union-backed Employee Free Choice Act, a new study has concluded.
Unionization of 1.5 million existing jobs would lead to the loss of 600,000 jobs the following year, the study by economist Anne Layne-Farrar found. She projected that job opportunities would decrease and inflation would increase if the bill, introduced this week, were to become law.
Layne-Farrar, who holds a PhD in economics from the University of Chicago, serves on the non-partisan firm LECG Consulting, headquartered in Emeryville, California. The findings won support of the Alliance to Save Main Street Jobs, which includes the International Council of Shopping Centers, the Retail Industry Leaders Association, the U.S. Chamber of Commerce and the Associated Builders and Contractors.
For every 3.9 million jobs that were unionized, another 1.6 million workers either would lose their jobs or not be able to find employment, concluded Layne-Farrar, who urged defeat of the bill in Congress. It would eliminate the employee secret ballot and provide for union organization if a majority of employees signed a card indicating they wanted a union. The industry term for the bill is "card check."
Two similar bills that were introduced into the Washington State Legislature were dropped from consideration this week due to concerns about alleged improprieties in union lobbying tactics.
"The unintended consequences of passing EFCA are likely to be significant," Layne-Farrar said. "Increased unemployment and reduced labor supply are very high prices to pay during any time, but especially during a recession."
The U.S. economy has lost 4.4 million jobs since the recession began in December 2007, the Labor Department reports. The U.S. unemployment rate of 8.1 percent is the higher in 25 years.
In her study, Layne-Farrar concluded that higher union wages lead to fewer positions for unionized workers and slower employment growth as firms shift work to non-unionized sectors.
Retro programs supported in Olympian letter
A letter to the editor last week in The Olympian calls attention to a financial benefit of retrospective rating programs to the Department of Labor and Industries.
In his letter, Bob Hauk, Vice President for Client Services for the Washington Manufacturers Council, suggests that a change in L&I money management policies could correct for the department's overpayment errors discovered to retro programs.
In effect, Hauk's letter points to L&I management practices as the best way to improve its relationship with retro programs as opposed to proposed state legislation to change the way retro programs are regulated.
In the interest of adding clarity to this issue, Hauk's letter follows in its entirety:
Labor & Industries merits a thumbs down
The Department of Labor & Industries deserves a second "thumbs down" for their lack of full disclosure of the total benefits they receive from Retro programs.
Retro programs pay refunds when claims costs are less than the paid premiums. Actual paid and reserved costs are multiplied by a loss development factor, typically in the range of 1.85 to 2.9. The purpose of developing claims costs is to set aside enough money for future liabilities.
Only a percentage of the money set aside is used, so L&I pockets the windfall instead of refunding it to the Retro participants. Since the 2000 refund year, L&I has increased its percentage set aside by 26 percent. This administrative practice has resulted in an underpayment of tens of millions of dollars annually to Retro participants.
Since 2000, L&I has amassed enough funds to pay for a $315 million rate holiday for the last half of 2007 and a $37 million dividend to only non-Retro employers in the state. Most, if not all, of the $352 million was collected from underpaying Retro programs.
The current reported Retro overpayments from the coding error are more than offset by the L&I practice of routinely underpaying Retro program participants. L&I, not Retro programs, should receive more oversight particularly because Washington is ranked 48th of the 50 states for highest workers' compensation program costs - 70 percent higher than the national average!
Bob Hauk, vice president for client services, Washington Manufacturers Council
Source: The Olympian
The Washington Retail Association, WRA, is a 501 C 6 trade association formed to advocate for Washington State’s retailers at the local, state and national level. Since 1987, the WRA has protected Washington's retailers from unreasonable taxes, fees, regulations and legislation. The efforts of the WRA benefit all Washington state retailers and help fuel statewide economic growth.
