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GSI Continues to Fight L&I Rate Hikes

As the Chamber of Commerce and economic development organization for Spokane County, Greater Spokane Incorporated works every day to bring new businesses to the area, in addition to helping existing businesses stay and prosper. Businesses make their decisions to expand or grow in a community based on various factors, but it all comes down to the bottom line. What states and communities offer the best environment for my business? Can I find the right workforce with the right skills? Where can my business be most profitable?

A safe work environment is important to every business. However, the continuous increase in Washington’s workers’ compensation costs – a mandatory program for businesses – overshadows many of the benefits Spokane County businesses enjoy. Even with a strong workforce and supporting education system, stable infrastructure and a high-quality transportation system, these costs are forcing business owners to make some hard decisions.

Recently, the Department of Labor and Industries proposed a 2% increase in worker’s compensation rates. When added to the successive rate hikes that have occurred over the past eight years (3% in 2008, 3% in 2009, 8% in 2010 and 12% in 2011), this recent proposal is just one more reason why Washington is considered the most expensive state in the nation for workers’ compensation. More than 170,000 businesses pay for approximately 2.5 million workers who are covered under the Washington state workers’ compensation system – one of only two monopolistic state funds in the nation.

At a hearing today (October 29) in Spokane Valley hosted by the Department of Labor and Industries, local businesses and our economic development team spoke about the detrimental effects continued increases in the system have on our region. Our unique location as a border community makes it easy for companies to move across the state line and still maintain their educated workforce, supply chains and other significant business resources. Unfortunately, when that happens, we lose the employment of these businesses and the tax base they provide our community.

Some Spokane-region businesses have announced that they are seeking a new location just across the state line, primarily to find lower costs in workers’ compensation, unemployment insurance and other taxes. Recently, we talked with two companies that are seriously considering an Idaho location: Business A can decrease their workers’ compensation costs by 48%, and Business B can decrease their costs by 12%. In addition to other costs savings through lower unemployment insurance, property taxes and lease rates, these companies can save upwards of 45% on their annual business costs. Why, then, haven’t our government officials taken action to help us keep businesses here, in Washington?

Every Spokane County business is vital to our economy and we want to help them succeed. If you didn’t have a chance to attend the hearing today, the Department of L&I is still taking written testimony until 5 p.m. on November 3. Email your comments to joanne.attwood@lni.wa.gov.

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