“The budget is going to be the huge issue in the next state legislature,’ said Jon Bennion, in speaking before members of the boards of the Big Sky Economic Development Authority (EDA) and the Big Sky Economic Development Corporation (EDC), last week.
Bennion is the Director of Governmental Affairs for the Montana Chamber of Commerce. “Our mission is to make Montana an even better place in which to do business,” he said.
With that in mind the organization’s top priority for the next session is to change the status of Montana as having the second highest workers compensation premiums in the nation. That’s a particularly devastating position, he said, given that “some of our neighbors have the lowest premiums.” North Dakota has the lowest premium in the nation.
Employers in Montana spend $400 million annually on workers comp insurance premiums.
A council of five labor representatives and five industry representatives, put together by the Governor, has developed a “comprehensive reform package” which they hope the next state legislature will pass. If they do, Bennion believes it will at least place the state in the middle of the pack when it comes to the cost of premiums. “We expect to save $125 million in premium costs annually,” said Bennion.
It addresses some of the problems which have been identified as contributing to the high cost of premiums, said Bennion, such as tightening up the provisions of what kind of claims get accepted into the system, and faster claim closure and settlement. There are medical claims on record that have been open since the 1990s, said Bennion.
One of the most significant issues that must be addressed is the workplace safety in Montana. The state has one of the highest work place injury rates in the nation, said Bennion.
Not only does Montana injure more people, but they remain off the job longer because of their injuries. That’s probably due, in large part, to the fact that Montana is such a small business state, said Bennion. A lot of employers don’t have as many options available to them, as do larger companies, in finding additional employment for an injured worker. Also, the rural nature of the state and the barriers that presents to medical access is, most likely, a factor. “There are some hurdles that industry may not be able to overcome,” said Bennion.
Montana also has the highest medical reimbursement rate. Some of that is attributable to “widely varying treatments,” which is currently “doctor driven.” In other states the adoption of medical utilization and treatment guidelines have resulted in significant savings, said Bennion.
The reform package proposes “nine-to-one” savings proposals, while at the same time including “fourteen-to-one” benefit increases, according to Bennion. But, he said, “We expect to see some savings, even though there are some benefit increases included.”
Also, high on the Chamber’s agenda is getting the state legislature to repay the funds it removed from the “old fund” of workers’ compensation. The “old fund” was a reserve of funds, paid for by employers to take care of “old claims,” filed prior to a previous reformation of the program in 1995. The Legislature raided the pot to balance the budget in 2003, and “we have pushed for them to pay it back every session since,” said Bennion. They wouldn’t even pay it back in 2007 when there was a $1.3 billion surplus. As it is, “the fund is not actuarially sound,” said Bennion, “It will run out of money in 2011.”
The Chamber is also advocating for a bill that would require the sponsor of a bill to provide a statement with its introduction, regarding its economic impact on small businesses. It’s a proposal that has also failed in the past, “but we believe it is important,” said Bennion.
The Montana Chamber would also like to see reform in Montana’s Wrongful Discharge policy. “We are the only state that doesn’t have at-will employment,” said Bennion. Some states “shy away” from here because of that.
They will also be watching closely what unfolds in regard to the massive confusion that surrounds the medical marijuana law. This is a situation that is impacting all businesses, since employers don’t know how they are supposed to handle drug testing and other issues related to drugs in the work place.
The Chamber will continue to push for the discontinuation of business equipment taxes. They are a “disincentive” said Bennion, for companies to invest in newer, safer and greener equipment.
In addition to these issues the Chamber will be at the session watching. “Much of what we do is to oppose bad things,” which could hamper small business growth and development, explained Bennion.
Bennion said that there are a lot of “special funds” tucked away “all over state government,” many of which were funded by employers. Given the state of the budget, he expects to see attempts made to usurp those funds to help make ends meet for the ensuing biennium. And, as with the “old fund,” Bennion worries that “they may not pay it back.”
The Big Sky Business Journal
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Billings, MT 59103