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Knowles wants to changes workers compensation

Posted: Friday, February 11, 2000

Gov. Tony Knowles announced two bills addressing workers' health and safety today.

Under the new legislation, the state's Occupational Safety and Health Administration program would have a new funding source and workers compensation benefit levels would go up for the first time since 1988.

``We have seen, over recent years, repeated budget cuts to the Department of Labor and Workforce Development and they have threatened the viability of these programs,'' Knowles said. ``As a matter of fact, federal takeover of occupational safety and health has been a distinct possibility.''

Last year, the state House approved a budget that would have eliminated state money for OSHA. Funding was restored in the Senate. If the cut had happened, the federal government would have taken over the program.

Dwight Perkins, deputy commissioner of the Department of Labor and Juneau Assembly member, said Juneau is one of about 30 governments and businesses in the state that are self-insured. Under current rules, self-insured entities don't pay for the administration of workers compensation claims. Under Knowles' proposal, they would.

Rather than paying a premium tax for workers compensation, businesses would pay a percentage of the amount of claims they generate. The more on-the-job injuries, the higher a business would pay.

With the proposal, about $3.5 million would be raised. He would use $1.2 million of that to pay for the state's OSHA program. The rest would go toward workers compensation.

Under Knowles' measure, most businesses would pay 3.3 percent of the amount of their reported claims in 2001, dropping steadily to 2.6 percent in 2004.

Self-insured concerns would start off paying less, but end up paying the same by 2004.

Perkins said that based on 1998 claims, Juneau would pay $5,900 in 2001 if the measure is approved. That price would rise to $18,000 in 2004.

The state, also self-insured, would be paying $231,000 into the fund by then.

Knowles announced his proposals at a press conference, but only one of the measures was ready in final form. The other - adjusting workers compensation benefit levels - is expected to be ready early next week.

Pamela La Bolle, president of the Alaska State Chamber of Commerce, said that from what she's heard, the adjustments to the state's workers compensation laws are something businesses can support.

``I believe they're generally in agreement with the adjustments in benefits and how the tax is paid,'' she said today. ``That's been pretty well worked out between management and labor.''

But those sorts of agreements can run into trouble in the Legislature, said Sen. Tim Kelly, an Anchorage Republican. Hard-won compromises can be pulled apart with amendments, he said. He supports some of what he's seen and heard of the two measures, but will reserve judgment on the proposals until he's sure a predictable, stable workers compensation program will emerge without a bunch of ``governmental gobbledygook.''

Keeping OSHA in state hands, he said, is something most will agree with.

``I think it's in the private companies' interests, workers' interests and the state of Alaska's interests,'' Kelly said.

Also, adjustments to the workers compensation benefit levels, which Knowles said will be included in the bill when it's ready next week, makes sense. During the dozen years since workers compensation levels have been set, Kelly said, the value of money has changed.

``I do believe it's time that we rework our workers compensation law due to inflation,'' he said. At the same time, he's not interested in legislation that would automatically raise claim levels with inflation. That would mean always-rising costs to businesses, Kelly said.



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