We think money set aside in the public trust to promote worker safety should be spent on worker safety.
So say Sen. Mark Doumit (D-Cathlamet) and Rep. Bill Fromhold (D-Vancouver) in a must read guest column in Tuesday’s Seattle P-I: “State’s ‘retro’ program needs repair.”
Doumit and Fromhold do an excellent job of explaining what retro is, how it works, and why the BIAW has been able to exploit its inequities to finance their partisan political agenda. To summarize, employers can choose to pay their worker’s comp premiums into “retro groups” run by associations like the BIAW, who pool the funds, and forward the money to the Department of Labor and Industries. At the end of the year, rebates are paid back to associations with favorable safety records… savings that are supposed to be passed on to the members.
But the size of the rebate is based as much on the size of the group as it is on the its success at preventing injuries. The largest groups get the largest rebates, even if their safety records are mixed.
The BIAW runs the state’s largest retro group.
It is also one of the greatest beneficiaries under the current system. In one year, 96 cents of every dollar the group paid into workers’ compensation was paid out to injured workers. But because the group is so large, it received 24 percent of its premiums back in the form of a rebate.
In other words, the association received a rebate of more than $25 million even though the difference between premiums paid in and losses paid out amounted to a little more than $3 million.
Then, the association turned around and charged its own members a 20 percent fee, generating millions of dollars more than the cost of administration. This money could have been used to promote worker safety or to reduce workers’ compensation premiums. Instead, it was funneled into political campaigns.
This is the money that bought Jim Johnson his seat on the State Supreme Court, and that financed $750,000 of independent expenditures on behalf of Dino Rossi before the election, and god knows how much since. This is the money that paid for those $10.00 checks the BIAW used to defraud voters of their signatures.
But reforming retro is more than just partisan retribution — although the BIAW certainly deserves any retribution it might get. As Doumit and Fromhold point out, this is about fixing inequities in the program and returning to its original intent of helping small and medium-sized businesses.
Despite an unenviable safety record, the association was able to draw millions of dollars away from groups that had shown more commitment to safety simply because it runs one of the largest retro groups in the state. Calling the money the association received a “rebate” is misleading, since it never actually belonged to the association.
This is inherently unfair. Companies that uphold their commitment to worker safety should be rewarded. Money dedicated to worker safety should be spent on worker safety, not funneled away as a cash cow for organizations that have no right to it.
Republicans like to talk the talk about helping small businesses. It’s time they walk the walk, and join Democrats in reforming retro, so that more of the savings go back to the businesses to which it belongs.
The Seattle Times editorializes on the BIAW’s “political sleaze.”