Article by Erik Smith. Published on Friday, April 15, 2011 EST.

Republican Move to Force Vote on Lump-Sum Settlements is Defeated

Republican Floor Leader Charles Ross confers with House Speaker Pro Tem Jim Moeller after Thursday’s vote.

By Erik Smith

Staff writer/ Washington State Wire

OLYMPIA, April 13.—You can’t exactly say it was a moment of high drama because everyone seemed to know how it was going to go down in advance, but Republicans tried to force a vote on the House floor Thursday for a workers’ compensation bill that has been blocked in a House committee. And they failed.

The vote was 54-43 to defeat a procedural motion that ultimately might have brought Senate Bill 5566 to the floor. The vote appeared to settle at least one part of the argument on the hottest business issue of the year. At least for now, the bill is dead, and Republicans and business interests are left to ponder their next move.

The measure would allow workers to take lump-sum settlements in place of pensions, if they choose, to close out costly long-term worker-compensation claims. And it might reduce some of the skyrocketing workers’ compensation costs that have forced double-digit worker-compensation tax increases for employers and workers in this state.

Passed by a coalition of Republicans and moderate Democrats in the Senate, the measure has been blocked in a House committee due to labor opposition. House labor chairman Mike Sells has said he will not permit a vote.

The motion on the House floor had been anticipated for more than a week, but it all played out in about a minute. Only one Democrat crossed over and voted with Republicans. They needed eight.

“It was kind of a smoke-out for this perceived Roadkill Caucus,” said Republican floor leader Charles Ross, a reference to the centrist group of Democrats who sometimes have voted with Republicans on business-oriented bills.

“It was a show-me day,” said House Minority Leader Richard DeBolt, R-Chehalis. “We’re all from Missouri today. And they didn’t show.”

            Would Have Been Astonishing

To tell the truth, such tactics rarely are successful in the state Legislature. Sometimes members vote with the opposing party on individual bills, but seldom does it happen on a procedural motion. That’s a breakdown of party discipline. So splits happen when party leaders allow them to happen, and the real decisions are made behind closed doors as members of the majority party decide whether to allow a vote on a particular bill.

Thursday’s motion was not a vote on the actual bill. It was a motion to proceed to the “eighth order of business,” which would have allowed a further motion to relieve the House Labor and Workforce Development Committee of the bill and advance it to the floor.

But the way the Legislature works, it was essentially the same thing as a vote on the bill itself.

Democrats stuck with their leaders. The only Democrat to vote with Republicans on the motion was state Rep. Jeff Morris, D-Mt. Vernon.

            So Much for That

With the vote out of the way, lawmakers have to decide what happens next. Gov. Christine Gregoire and other state officials say something has to give on workers’ comp, because fast-rising claims costs are driving up tax rates and employers are howling for relief. Unless something changes, they warn, there will be a move to radically change the Washington state insurance program. It is only one of four such programs in the country that shut out private insurance companies. The rest either allow private competition with the state program – forcing the states to operate like hard-nosed insurance companies – or allow private insurers to handle all the business.

Lump-sum settlements are allowed in 44 other states but not in Washington. An estimate from the state Department of Labor and Industries indicates that Washington would shave $1.2 billion from its long-term liabilities during the first two years if lump-sum settlements are permitted, because pensioners will rush to take the cash. The settlements would be about 80 percent of the amount that workers would receive over the long haul through pensions.

After the first two years, the state would save about $250 million annually. Eventually the savings would be reflected in lower tax rates.

Ain’t Over Yet

Labor is dead-set opposed to the settlement process, also known as “compromise and release,” because it maintains workers would make choices that are not in their long-term best interest. Jeff Johnson, president of the Washington State Labor Council, said before the vote that he believes most of the financial problems faced by the state system can be chalked up to the recession. The state took a bath on the stock market when Wall Street collapsed in 2008, and the worker’s comp program lost about $618 million in investments.

“The system is fundamentally strong, fundamentally solid, and you know, once the economy comes back, hours come back, premiums come back, this is going to be a forgotten chapter,” Johnson said.

Meanwhile, the governor continues to tout a more moderate proposal she unveiled late last month, and Republicans and business interests say the battle isn’t over. “I think it is too soon for the House to spike the ball into the end zone on this one,” said Kris Tefft, lobbyist for the Association of Washington Business.

State Rep. Cary Condotta, R-Wenatchee, the House Republican lead on the issue, said negotiations are continuing and there may be a bit of horse-trading between business and labor before the session is through.

“There is still some thought there might be something that is acceptable to those middle [of the road] guys,” he said. “Right now they are not quite ready to take the full meal deal but we are not going to give up, we are going to continue to negotiate. You know, either way, the system has to be fixed and if they don’t want to fix it, it is just going to get worse. You will see rates dramatically increase, you’ll see the funds dramatically decrease, and perhaps when the system gets close to bankruptcy, maybe somebody will come to their senses.

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