Meddling with successful Retro funds will hurt the state By Jan Teague, President/CEO
I am concerned about the unintended consequences of a legislative debate over Retrospective Rating Programs, which reward safely-run businesses with partial refunds of their workers' compensation insurance premiums.
Right now, Retro programs work so well that they return to employers from 20 percent to 30 percent of the workers' injury compensation premiums that they pay the state. I would call that a success for the policy makers who set up the voluntary Retro programs years ago. At that time lawmakers were hoping to enhance the state's workers' compensation program by devising a system to encourage worker safety and return injured workers back to their jobs as soon as possible. Legislators wanted state associations to administer the programs rather than private insurance companies
The Seattle Times and Tacoma News Tribune have recently written stories that the Building Industry Association uses some of its Retro revenues to fund political campaigns. There is speculation that some legislators want to dry up that funding by attacking Retro and placing new regulations on how the programs operate.
There can always be a legislator willing to make a case about fairness. Some have said that workers are getting cheated in all of this. But are they?
Workers benefit by having less deducted from their paychecks when they avoid injuries and remain productive. The foundation of Retro programs is increased safety awareness, which benefits all workers.
Others have said some businesses are getting cheated because they deserve more of the refunds that BIAW, for example, keeps for other uses.
What may be escaping some legislators is that punishing the Building Industry Association would punish other efficient, non-controversial Retro programs in the process.
Also, if associations became discouraged enough to drop their Retro programs, the state's workers' compensation claims through the Department of Labor and Industries would drastically increase. This would be an expensive new cost to the state in a time when revenues currently are running billions of dollars short of expenses, making layoffs and deep state program cuts a certainty for the next couple of years. The consideration to tinker with Retro programs is a huge financial risk that couldn't be more poorly timed.
Each Retro group works based on annual contracts with the financial arrangements included, as the Tacoma News Tribune points out. As contracts expire, companies are free to change who administers their Retro program if they are unhappy with the performance or the financial terms.
Businesses understand that when their Retro program is doing well, they get back a portion of their premiums. But what The News Tribune story does not address is what happens when a Retro program needs more of an emphasis on eliminating certain types of re-occurring injuries. Associations then respond and address those needs with their business partners. The associations have personal relationships with their enrolled companies and provide them the advice they need to improve worker safety. Associations are nimble and responsive which are key reasons why Retro programs are successful. In the process, they save the state lost revenues from injured, non-productive employees.
It would be wrong to interfere with a successful workers' comp system that is providing positive support to both workers and businesses. The system is far from broken.
Attacking the Building Industry Association's Retro program would endanger state government finances and amount to an assault on all of the other functioning and productive Retro groups. Let's hope legislators will see through any bill that wrongly suggests that businesses are being treated unfairly by Retro programs.
Contractors hired for Retro review
Two contractors reviewing the state's Retrospective Rating Programs may complete their work by the middle of next year.
Tammie Hetrick, the Washington Retail Association's Vice President of Retail Services, attended a Retro Proviso Group meeting this week to update progress on the review of the programs' actuarial, underwriting and claims/risk management operations. The proviso group is a coalition of business and labor organizations overseeing the Retro review.
The contractors were hired after Gov. Christine Gregoire asked for a review of state Retro programs last year, Hetrick said.
"We are confident these contractors will find Retro to be a very successful program and may even find ways to improve on the programs," Hetrick said.
Hetrick said a benefit of the review would be to better educate legislators and other interested parties on the benefits of Retro programs.
Retro programs operated by state associations work with employers to better manage their workers' compensation premium costs and return refunds to employers who maintain safe workplaces. The programs also assist injured workers in expediting compensation benefits and medical treatment while assisting them with programs to return to work as soon as possible.
Labor groups have been considering bills for the next Legislative session that could change the way Retro programs operate.
Hetrick said she was hopeful that legislators would await the results of the proviso group's review before considering any bills related to Retro program operations.
State budget shortfall climbs to $5 billion
The Washington state budget shortfall heading into 2009 has climbed to $5.1 billion, the state's new chief economist says.
Economist Arun Raha told the state Economic and Revenue Forecast Council that the slowing state economy has boosted a previous $3.2 billion state revenue shortfall by $1.9 billion in recent months. The shortfall would be for the two-year budget cycle beginning next July.
Raha attributed dwindling state revenues to falling auto and home sales and worsening consumer confidence, which promises to make this year's holiday shopping season one of the weakest in the past several years.
"Car sales are at recessionary levels not seen since the early 80s, when there were 40 percent fewer drivers," Raha told The Tacoma News Tribune. "Consumer confidence has plummeted to its lowest value ever recorded. It's not surprising that the American consumer has decided to just sit on his wallet."
Gov. Christine Gregoire pledged during her recent election campaign not to raise taxes to address the shortfall, but that was before this week's financial projections were released. She already had begun a freeze on state hiring and out-of-state travel and cuts in personal services contracts and equipment purchases. She also has warned state agencies to prepare for deep budget cuts.
Writing in The Everett Herald newspaper, Richard Davis of the Washington Alliance for a Competitive Economy urged state lawmakers to hold the line on spending when they convene in January. He warned against raising business taxes or repealing existing tax exemptions to address the revenue shortfall.
"With manufacturers and high tech firms already eyeing more tax-friendly states, repealing exemptions would cost Washington critical jobs and revenues," wrote Davis, who heads the coalition of organizations working for a more competitive state business climate. "After boosting (state) spending by more than a third over the last four years, lawmakers must now hold the line."
Safeway seeks resolution with Department of Licensing
Safeway's loss prevention director testified last week at a Department of Licensing hearing regarding a policy change that he said makes it harder to prosecute criminals.
Jason Moulton, Safeway's Loss Prevention Director, appealed to the department to reconsider a recent policy change that removed his access to driver's license records that allow him to identify vehicle owners.
Concerned landlords and private investigators joined Moulton in testifying against certain new Licensing procedures.
Licensing records can be valuable in helping to clear store parking lots of abandoned cars, catching motorists who leave without paying for gasoline or in investigations of suspects in organized retail theft cases, Moulton testified.
Department of Licensing officials took testimony during the hearing but did not comment on the department's interpretation of state and federal laws regarding access to driver license records and privacy matters.
In the past, Moulton said he has used computerized licensing records to help in investigations of theft and vehicle abandonment cases. He testified that he recently was denied that access by the Department of Licensing.
Losing access to the identity of vehicle owners will make it more difficult to investigate and prosecute theft and abandonment cases, Moulton said.
Without a resolution of the issue, Moulton said he was concerned that grocery parking lots could become a favorite spot for people to abandon vehicles. He also warned that if more suspects are successful stealing gasoline, Safeway and other retailers who sell gas would be forced to pass increased costs on to customers.
The Washington Retail Association testified in support of Moulton at the hearing by pointing out the importance of providing security officials with all the tools they need to combat the growing organized retail theft problem. National estimates are that retailers lose an estimated $30 billion a year in stolen merchandise that typically gets re-sold on the Internet. Retailers warn that growing losses could increase the price of merchandise.
Also at the hearing were landlords, private investigators and representatives of repossession companies who were concerned about Licensing's policy changes.
A Federal Way landlord said losing access to driver's records would make it harder to identify suspicious vehicles on his property and to quickly respond to tenants concerned about the issue.
Legal investigators who serve subpoenas objected to the department's practice of notifying vehicle owners by letter after investigators have run a check on their plate. The notices have made some vehicle owners irate and this is slowing down efforts to identify suspects, the investigators said.
Number of state retail jobs falls with slowing economy
The number of people working in the retail trades has fallen as the state's economy has slipped into recession, new Employment Security Department data show.
Preliminary October data show about 326,500 people employed in retail trades around the state, which is down from 329,100 in the same month a year ago. Retail trades, not including restaurants and drinking establishments, make up about 11 percent of the 2.9 million non-farm jobs in the state, the Employment Security data show.
Retail trade categories include auto dealers, furniture and home furnishings, groceries, apparel, health and personal care items and general merchandise.
Depressed auto and furniture sales are the main reasons that retail employment is down this year, the data show.
Another factor is that retailers are hiring less this year because of the recession.
"Retailers are not staffing up as aggressively," said Jan Teague, President/CEO of the Washington Retail Association. "October is normally where you see seasonal hiring starting. The data are confirming that this is going to be a weak Christmas season."
The all-time peak for state retail employment was in November last year, when estimates were than 340,000 people were working in retail trades statewide.
There have been dips before in retail employment, though employment had been steadily increasing since 2003. During the last state recession at the beginning of the decade, retail employment statewide fell from about 316,000 to 305,000 between early 2001 and late 2002, according to Employment Security Department data.
Nationally, the holiday shopping season begins on a low note as far as sales are concerned.
Sales at retailers across the country fell in October by the largest amount on record. A steadily worsening economy pushed consumers away from nonessential purchases, and the result was a 2.8 percent drop in retail sales from September to October. That decline surpassed Wall Street projections and broke the 2.65 percent record drop posted in November 2001 in the wake of the 9/11 terrorist attacks. The weakness was led by a 5.5 percent plunge in auto sales, the biggest drop since August 2005. Auto companies reported unit sales fell to the lowest level in 17 years as potential buyers stayed away from auto showrooms. Excluding autos, retail sales fell by 2.2 percent -- still a record decline. Regional state economist Jim Vleming was reluctant to project how much further retail employment could fall in the state.
"There are too many factors at work," he said. "How long will people remain nervous about the economy and the stock market? There needs to be higher consumer confidence."
At this point, Vleming said, many retailers are simply too nervous about sales.
"Most retailers in our state are small, and those people right now are saying I'm not going to hire that extra person," Vleming said.
Walgreens airs concerns on priority legislative issues
A Washington Retail Association representative attended a briefing on priority legislative issues presented last week by the national pharmacy chain and WRA member, Walgreens.
Mark Johnson, WRA's Vice President of Government Affairs, heard company officials outline several state and federal issues of concern in the two-day, high-level briefing with several state associations at company headquarters in Chicago.
Walgreens officials in particular raised their concerns about an expected federal government proposal that would make it easier for labor unions to organize workplaces. The proposal, known as "card check," would remove secret ballot elections to determine whether a union formed. Instead, the proposal would allow a majority of employees to sign a card saying they wanted a union. If that happened, a union would be formed without an election.
Other topics discussed in the briefing included: *Medicaid/Medicare reimbursement rates. Walgreens' officials said they are fighting to ward off further cuts in reimbursement rates. *Organized retail theft. The issue is a growing national problem for retailers. The Washington Retail Association has called for the creation of an Organized Retail Theft Task Force and the appointment of a special retail theft prosecutor to address the problem in Washington State. *The company's rollout of Take Care clinics in select Walgreens stores around the country. Such clinics allow patients to get immediate care for minor medical items at convenient hours without appointments *Plans to fill some mail-order prescription orders at off-site locations so that Walgreens' pharmacists will have more time to consult in person with customers. *Expired drug take backs. Walgreens' officials expressed their opposition to forcing pharmacies to take back expired drugs. They said their concerns had to do with maintaining a safe shopping environment for customers and a safer workplace for employees.
Johnson said the WRA would work diligently to promote the company's concerns and defeat proposals on a state level that could harm the company. WRA will support Walgreens on federal legislative matters where appropriate, he said.
WRA Website adds new features
If you haven't visited the Washington Retail Association's Website recently, please take another look.
We're putting more information onto the site more frequently as we near the next Legislative session. The quicker pace of additions to the site will continue through the next session and beyond.
A new right-hand column on the homepage now includes periodic video and audio updates on important issues, recent news developments of importance to retailers and several Internal Revenue Service business-related links to help retailers prepare for the upcoming tax season.
Our hope is that WRA members and the public at large will increasingly rely on the Website to keep abreast as issues related to retailers and their well-being surface or change.
And, of course, we invite your feedback and suggestions.
Please contact Jim Szymanski, Director of Public Affairs, with any thoughts you have regarding the additions to the site or further changes you believe might be useful. You can reach Jim either at 360-943-9198, Extension 12 or at jim.szymanski@retailassociation.org.
Motorist complaints to the state have nearly doubled this year regarding the accuracy of gasoline pumps, the Weights & Measures Advisory Committee reported this week.
The division of the Department of Agriculture took 633 complaints as of November 1 this year compared to 348 all of last year.
Complaints have risen despite a drop in the price of gasoline, said Kirk Robinson, the Weights & Measures program manager. Olympia-area prices for regular unleaded fuel, for example, have dropped from a record $4.39 a gallon in June of this year to an average $2.16 this week, according to AAA-Washington.
Robinson said complaints began rising ahead of last year's pace last April, when the per-gallon price of gasoline in the state cracked $4. The pace of complaints has continued even though prices have fallen, he said.
As many as 15 percent of the complaints turned out to be valid after investigation by state inspectors. Violations typically include pumps that don't dispense the advertised amount of fuel or posted prices that don't distinguish clearly enough the difference between the cash and credit price for fuel, Robinson said.
Faulty pumps are put out of service until the gas station owner gets them repaired, Robinson said.
The department has not found a pattern of valid complaints regarding individual station owners.
"They're very random problems," Robinson said.
Source: Department of Agriculture
"Personal" and "practical" are watchwords for holiday gifts
Holiday shoppers will tend toward buying practical as opposed to expensive gift this season, a new National Retail Federation survey has found.
Clothing, books, CDs, DVDs and video games will top the list in popularity, said the survey conducted by BIGresearch. As of this week, it found that 72 percent of those surveyed has completed less than 10 percent of their holiday shopping. It polled 8,758 consumers between Nov. 5 and 11.
"Americans may be hesitant to purchase expensive gifts this holiday season, but personal and practical gifts will resonate with most shoppers this year," said NRF President and CEO Tracy Mullin.
Shoppers can expect to find good deals on many items, said Phil Rist, BIGresearch's Executive Vice President of Strategic Initiatives.
"Even though consumers will be watchful of their spending this year, shoppers may find the bargains too good to pass up and will treat themselves to something they've had their eye on for months."
Other survey findings: *41.5 percent of shoppers will primarily use debit or check cards; 22.8 percent will rely mostly on cash, while 31.5 percent will use credit cards. *Usage of checks will be low. The survey found 4.3 percent of shoppers will use checks this year.
Source: National Retail Federation
Retail return policies relax
Retailers are relaxing their return policies this year in hopes of improving customer relations, the National Retail Federation reports.
Fifty-two percent of retailers surveyed this year by NRF said their return policies would be more lenient, up from 35 percent surveyed a year ago.
"In a year when practicality is paramount, many retailers are making return policies more flexible for customers who need to bring back duplicate or unwanted gifts after the holidays," said NRF Vice President of Loss Prevention, Joe LaRocca. "Retailers seem to be finding a balance between providing good customer service to shoppers while preventing criminals from taking advantage of lenient policies."
Common return policy changes include extending the amount of time for returns and being more flexible to customers without a receipt, the NRF reported. The October survey questioned 82 retail loss prevention executives.
Washington Retail Association | 618 Quince St SE, STE A | PO Box 2227 | Olympia | WA | 98501
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.
