Op-Ed: Made in Washington: Put people back to work by reducing employer costs

Several days ago, I received the following messages from local business owners:

Dear Rep. Kristiansen,

My company is already challenged without the increased proposed taxes to compensate for budget deficits that weren’t made by my company. These tactics only make me NOT want to become an employer, but subcontract out my overflow work. Because my cash flow is not where it needs to be, I am without health insurance myself. The American people need jobs!

Dear Rep. Kristiansen,

I recently received the 2010 Employment Security Tax rate notice to find that my company rate was increased by 271 percent.  Our company has an extremely good record of not laying off any employees for the past 10 years. It is unconscionable to expect that small business can accept anything near a 271 percent increase in any taxes.  If the governor and the Legislature expects to keep small business in this state they must relieve the small business person from this kind of increase.

This is a sampling of what employers in Washington face every day. The recession has made it difficult, but when government adds more taxes and costs to employers on razor’s edge, it’s little wonder that employees are laid off and more than 320,000 people are out of work. Here in the 39th District, 7,720 people filed for unemployment in November. That’s nearly the size of the populations of Concrete, Granite Falls and Sultan combined.

My House Republican colleagues and I believe job creation in the private sector should be the highest priority of the 2010 legislative session. That’s why we have introduced our “Made in Washington” agenda, which focuses on preserving employees’ existing jobs and creating new ones to get people in Washington working again.

Our plan’s first component is: “Put people back to work by reducing employer costs.”

We propose to accomplish this goal making reforms to improve the state’s costly and complex workers’ compensation system and reducing unemployment insurance costs.

Washington is one of only four states with a workers’ compensation insurance system that is a state-run monopoly. When rates are being lowered in other states, the Department of Labor and Industries in Washington just raised workers’ compensation rates by an average of 7.6 percent. This comes at the worst time for employers and employees, both of whom pay into the system.

Employers have made workplaces safer. In fact, the number of workers’ compensation claims has dropped 55 percent since 1990. Yet, premiums have increased by more than 40 percent over the last five years. This suggests an inefficient system.

Our proposed reforms include:

1. Freezing premiums immediately. This would give employers some financial certainty in the coming year.

2. Eliminate the state-run monopoly on workers’ compensation insurance by allowing private insurers to compete and offer a product to employers at a better rate with more choices as is already being done in 46 other states.

When West Virginia privatized its workers’ compensation system, premiums dropped by 30.3 percent. Other states enacting similar reforms have experienced lower costs. Washington is one of the last states that has not provided comprehensive reforms.

When we reduce employers’ costs, it frees up money so they can hire again. When people are working, they become less reliant on government services, and at the same time, they generate the revenue that helps us carry out the core functions of government. It’s a winning solution for all.

To see more of our solutions in the Made in Washington plan, go to my Web site at: houserepublicans.wa.gov/Kristiansen.

EDITOR’S NOTE: State Rep. Dan Kristiansen, R-Snohomish, represents the 39th Legislative District, and also serves as chairman of the Washington House Republican Caucus. He can be contacted at (360) 786-7967 or e-mail him and sign up for his e-newsletter at: houserepublicans.wa.gov/Kristiansen. His office address is: P.O. Box 40600, Olympia, WA 98504-0600.

State Representative Dan Kristiansen, 39th Legislative District
426A Legislative Building | P.O. Box 40600 | Olympia, WA 98504-0600
(360) 786-7967 | Toll-free: (800) 562-6000