State leaders reach key deal on workers' comp changes

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OLYMPIA (AP) -- Washington lawmakers ended days of contentious negotiations Sunday night with a plan to overhaul the state's workers' compensation system and potentially save hundreds of millions of dollars in the years to come.

The proposal announced by Gov. Chris Gregoire and leaders from both parties seeks to improve the financial health of the system by offering financial settlements to older workers who get injured. Labor groups immediately called the deal unacceptable while business advocates gave lukewarm approval.

Gregoire called it one of the most contentious, complex and difficult issues that she and the Legislature have tackled.

"There's no one here who won. There's no one here who lost," Gregoire said while looking around at Democratic and Republican leaders from both chambers.

Pressed for time with the end of the special session looming on Wednesday, lawmakers hope to pass the bill as early as Monday. They do not plan to have a public hearing. State leaders believe the bill is necessary in order to clear passage of the state's operating budget.

The compensation system came into focus this session because of concerns about the long-term sustainability of the program. Businesses that fund the system faced an average rate increase of 12 percent for 2011 and feared another double-digit increase in 2012. Gregoire said she wasn't sure what the rate increase would be, but she expects the new plan would limit it.

Senators and Gregoire had initially pushed a program to allow lump-sum settlements, but House leadership and labor groups wouldn't accept the plan. The new proposal would essentially create a hybrid of the two approaches by allowing settlements that would be paid over a period of time. They would be offered only to people over the age of 55 at first, and eventually to people at least 50 years old.

"This is a fair deal for everyone involved," House Speaker Frank Chopp said.

The negotiated settlements are expected to save more than $500 million in projected costs over the next four years. Combined with other changes that have already been approved, such as a cost-of-living freeze, total savings would top $1.1 billion.

Jeff Johnson, president of the Washington State Labor Council, said the settlements weren't something the group could support. He argued that the shift will create a workers' compensation that's more of a gamble than the secure safety net it should be.

"It is atrocious," Johnson said. "For workers, it's a loser."

Johnson said labor officials would discuss Monday their next steps, but he acknowledged that it was unlikely they could stop the bill from passing.

The Association of Washington Business said the settlements would provide much-needed relief for businesses facing the prospect of further rate increases. But Don Brunell, AWB's president, said officials would still need to discuss further changes for the future.

"Washington state's workers' compensation system cannot continue indefinitely in its current state -- even with the changes reflected in this agreement," Brunell said.


Mike Baker can be reached at http://twitter.com/MikeBakerAP