The Labor and Industries department runs the state’s insurance program, paying workers when they are injured for their lost wages, medical bills and pensions.

    Yesterday L&I announced it needed to raise rates by 7.6 to 9.3 percent to pay for rising costs. The rate raise for 2010 would bring in $117 million. L&I Director Judy Schurke said her department kept the raise as low as possible. The rate raise, which we call an increased tax on businesses, is not final. They won’t kick in until late November after public hearings.

    This shouldn’t come as too much of a shock to businesses, as in the past 10 years L&I rates have increased a total of 53 percent.

    Most businesses are required to carry such workers’ insurance. A small percentage of businesses are allowed to carry their own insurance. Today about 170,000 employers pay into the L&I insurance plan.

    This is an onerous time for the state to add more burden to businesses that are already struggling to stay open during this damaging recession. Most private businesses have already trimmed back on their spending and on their employees, and are fortunate if able to hold onto a small profit.

    We believe L&I could do a better job of resolving outstanding claims, and offer more modest benefit packages. While we respect and agree that workers need help when injured on the job, we also place a premium on helping businesses retain their employees and also turn a profit.

    Statistics back up our suspicions. With employees and employers working together on safety issues, the annual number of L&I claims filed since 1990 has dropped by 55 percent. The average worker injured in this state is absent from work about 266 days, three times higher than the national average. We are the leader in the nation in awarding lifelong pensions.

    Less injuries, higher costs and higher taxes?

    We suspect the state L&I department has not made the same, painful cuts in spending and employees as in the private sector. No, we suspect the workers inside L&I have enjoyed raises and protected status as part of the massive bureaucracy emanating out of Olympia.

    Need a fact? L&I’s administrative costs are up $39 million last year.

    Yet perhaps the real answer is the state allowing private-sector industrial insurance. When West Virginia, for example, went the privatization route, after one year premiums dropped by $150 million and 90 percent of claims had a decision within 30 days. Those filing protests against claims dropped 68 percent.

    If Washington state could replicate the West Virginia case, this state could see savings of a half billion dollars.

    This is not the time for L&I to place higher taxation on such businesses.