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Home / Washington Business - July/August 2007 / From the Publisher: The good, the bad and the kicked ahead |
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From the Publisher: The good, the bad and the kicked ahead |
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Written On: July/August 2007 |
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Written By: by Don C. Brunell, AWB President |
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The AWB Legislative Review, published annually in the pages of Washington Business magazine, is usually a compendium of the good and bad legislation impacting our members and competitiveness. Our 2007 voting record is a little unusual, however, because many of the key issues facing the Legislature were “kicked ahead” to the next session and are currently being studied.
While we share many of the Legislature’s goals, we often find their approach troubling. Too often, the unintended consequences far exceed the intended good.
For example, Democratic leaders finally mustered enough votes to pass a rudimentary paid family leave bill. With Gov. Chris Gregoire’s signature, it sets up a new government-run program to give all workers five weeks of paid leave—up to $250 per week—for the birth or adoption of a child. However, proponents are already talking about expanding the paid leave to family illnesses, raising and extending benefits, and passing the cost on to employers.
Washington is the second state to enact paid family leave, but unlike California’s legislation, our new law is just a shell. Now lawmakers must develop the funding source, pick an agency to collect the money and run the program, set the qualifying standards, and figure out how to avoid fraud and abuse.
Family leave may impact UI rates
Although the original measure called for a 2-cent per-hour tax on workers, the seed funding comes from an $18-million supplemental pension fund loan. That Labor and Industries fund is used for cost-of-living adjustments for injured workers receiving disability payments. It operates on a current payment basis and is not required to maintain actuarial solvency. Therefore, employers could see immediate impacts on their L&I rates if the fund is depleted for paid family leave.
Ultimately, the Legislature must decide how this new leave policy affects unemployment insurance rates. Remember, in Washington, employers pay the highest tax per employee in the country.
The 2007 WashACE Redbook shows our employers shell out on average $865 per worker, compared to the national average of $317. Our average weekly worker benefit is the seventh-highest in the nation at $310, well above the national average of $277.
Climate change has sweeping impact
Another study concerns global climate change. How lawmakers approach their goal of controlling greenhouse gases affects everyone in the state. New policies will impact our personal lives and may put us at a competitive disadvantage with neighboring states and provinces.
Our region’s economy is built on low-cost, reliable energy. Yet some environmentalists lobby to rip out power-producing dams, ban nuclear power, stop oil and gas exploration, and terminate research-and-development funding for clean-coal technology. Wind, biomass and solar energy are important new energy sources, but they will not produce the needed power, regardless of our conservation efforts. We support solutions that keep our economy strong while controlling greenhouse gases and minimizing pollution and waste.
Finally, the Legislature continues to march toward the Massachusetts "connector" health care model. They’ve set timelines to commit Washington to the same design before knowing if things will work out in Massachusetts. Basically, the law—which is unproven and costly—makes the state the broker for individual health insurance. In Massachusetts, everyone is required to buy health insurance, much like mandatory auto insurance. Nonetheless, much of the burden is on employers to insure workers.
Keep what’s working, change what’s not
The devil is in the details, which are slowly being worked out in Olympia. We know that sweeping catch-all solutions rarely work. That’s why we advocate building on what is working now and surgically correcting what is not.
For example, association health plans, such as AWB’s HealthChoice, cover more than 500,000 people in our state. About 40 percent of those covered did not previously have health insurance. Washington’s connector legislation would pool all people together regardless of lifestyle. For example, smokers would be lumped together with non-smokers and pay a common rate. Lower rates for some mean higher rates—and possibly no coverage—for many.
The connector may be part of Washington’s health insurance mix, but it should not come at the expense of health plans that are working.
So, as you sift through the review, remember much work lies ahead. AWB’s staff is working hard to protect your interests and improve Washington’s business climate. And we need your help.
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