Unions fight Washington ballot measure to privatize workers comp

There’s a lot at stake on the Washington ballot this year, and the Washington State Labor Council — the statewide body of the AFL-CIO — is working to get the word out about ballot measures that will impact workers.

Washington is the fourth most unionized state in the country. The roughly 400,000 members of WSLC-affiliated unions can be a formidable force politically.

For WSLC, the absolute top priorities are returning Patty Murray to the U.S. Senate, and defeating I-1082 — a ballot initiative that would privatize Washington’s workers’ compensation system.

Initiative 1082 is funded by out-of-state insurance companies and by the anti-union Building Industry Association of Washington. The measure asks voters to privatize Washington’s workers’ compensation system, which pays workers’ medical bills and lost wages when they are injured on the job. The system is currently run by the state Labor and Industries (L&I) department, except that large companies like Boeing are allowed to self-insure.

“The insurance companies are looking at Washington state as a tremendous opportunity to make money,” says Alex Fryer, spokesman for Vote No on Initiative 1082. Liberty Mutual, the nation’s largest workers comp insurer, donated $500,000 to the campaign.

The pro-1082 campaign is using ideological arguments about “government monopoly” and scary claims that workers’ comp rates are high and are killing jobs. An online “rap” video shows Labor and Industries stuffing money in a pocket labeled “union,” and the pro-1082 campaign says in its Voters’ Pamphlet statement that “union bosses” are against the initiative because “they are terrified to lose their political and financial grip” on the workers’ comp system. Such anti-union venom gives a pretty good picture of the ideology of the measure’s backers, but is more absurd than offensive: Washington’s union movement has no financial ties or any direct financial stake in Washington’s public workers’ comp system. But, it has been steadfast in fighting attempts to erode workers’ comp, which is a benefit that Washington workers have had since 1911.

The way it’s written, I-1082 would harm union workers in particular. Workers’ comp premiums are currently computed as a charge per hour worked, since the more hours worked, the more a worker is exposed to hazard. I-1082 would change that, instead computing the premium as a percentage of payroll. That would mean higher-paid (and unionized) employees would be more expensive to insure.

Could private insurance companies offer workers’ comp insurance more cheaply than the public system? Private insurers have higher marketing, underwriting and administrative costs, have to pay taxes, and need to turn a profit for shareholders and CEOs. So just to match L&I’s rates, they would need to save money — I-1082 opponents say — by delaying and denying claims. Washington’s insurance commissioner has estimated that workers comp insurance rates would go up, not down, if I-1082 passes.

“This is a wholesale remake of what happens to workers injured on the job,” says Fryer. “I don’t believe a special interest backed initiative is the right way to make changes to the system.”

While its top focus is defeating I-1082, WSLC is opposing four other ballot measures, and supporting two. So its message to union members is, “Two for you.” The two measures it’s endorsing are Referral 52 and Initiative 1098.

  • Referral 52 would create an estimated 30,000 new construction jobs doing energy efficiency upgrades to public schools.
  • Initiative 1098 would set up, for the first time ever, a state income tax — but only for the top 3 percent of incomes: the estimated 38,400 taxpayers with “adjusted gross income”over $200,000 for individuals or $400,000 for joint-filers. Income over that would be taxed at up to 9 percent — equivalent to other states — except that 97 percent of Washingtonians wouldn’t have to pay any state income tax. The measure would lower taxes for most Washingtonians: State property taxes would be reduced, and “business and occupation” taxes on gross receipts would be eliminated for small businesses — 81 percent of Washington businesses will no longer pay any B&O tax. The measure would raise an estimated $2.9 billion starting 2012, while giving $393 million in property tax relief; and the net increase would fund education and health care. Finally, in answer to fears that the tax might later be extended to the less-well-off, the measure requires a public vote for any future change to the income tax.

Measures WSLC is opposing:

  • Initiative 1053, authored by perennial ballot measure activist Tim Eyman, would require a two-thirds majority for the Legislature to raise taxes without voter approval.
  • Initiatives 1100 and 1105 would privatize and deregulate liquor sales. All state liquor stores would be closed, eliminating $350 million a year in revenue that funds education and public safety, and every gas station and convenience store that currently sells beer could sell liquor. United Food and Commercial Workers, in particular, has come out against these two.
  • Initiative 1107, funded by the American Beverage Association, would end a new sales tax on candy, and repeal a temporary 2-cents-per-can sales tax on soda and a temporary sales tax on bottled water. Passage would reduce state revenue by $300 million.

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