In the flurry of initiatives trying to get on the November ballot, there's one half-baked proposal that should make business owners and employees think twice: I-1082, the measure written by builders and insurance companies to privatize Washington's public nonprofit workers' compensation system.

Bottom line: I-1082 is bad for business. Even the advocates of I-1082 concede that some businesses will end up paying more if for-profit insurers enter the workers' compensation market.



Costs shift

Retailers, for example, could pay 40 percent more.

How is that possible? Because I-1082 would remove the portion of workers' compensation now paid by employees. And because the changes would go into effect in December but private insurers wouldn't be allowed into the market until 2012, every employer in the state would see rates go up for at least 18 months.

You don't have to take my word for it. Even one of I-1082's biggest boosters, the Association of Washington Business, admits in a memo to members that "This will increase costs for some employers."

I'm a small, family-owned auto repair and tire business with four employees, and if this thing passes, I could be looking at rate hikes of $1,500 per year.

And for what? Boosting the already healthy profit margins of the out-of-state insurance giants?



Passing the smell test

The current system isn't perfect, but it's a level playing field for small businesses. And I know that if there's a claim, I can talk to someone in my area code.

Hand the system over to private insurance companies and they're sure to cherry pick and raise rates for small businesses. And I'd be dealing with someone from out of state who knows nothing about Washington.

Fact is, we control the government. It's called elections. But who controls the millionaire CEOs of the insurance industry? We can't fire the top guy at AIG and that's not a good thing. Just three years ago, AIG was fined $5 million by the state of Oregon for mishandling workers' compensation claims and failing to pay injured workers in a timely fashion. Those are real people feeling real pain.

The backers of 1-1082 will say that Oregon, with a privatized system, hasn't raised workers compensation claims for 19 years.

But that factoid doesn't pass the smell test.



Apples to apples

When you really compare apples to apples, employers in both states have paid about $2 per $100 of payroll for their workers' compensation insurance since 2003.

Other tidbits of misinformation in the I-1082 that should be corrected: Only a tiny percentage of all claims involve permanent disability and the system is on sound financial footing. Just ask State Auditor Brian Sonntag, who has come out against I-1082.

When you consider all the facts, I don't see any benefit for bringing in unknown insurance companies into Washington's workers' compensation system. It's the wrong solution and it would make a tough economic situation even worse. That's why the Main Street Alliance of Washington, a group of small business owners, is opposed to I-1082.

When it comes to ballot initiatives, let the voter beware: I-1082 is not all it's cracked up to be.



Don Orange is vice chairman of the Main Street Alliance of Washington. He is owner of Hoesly ECO Auto and Tire in Vancouver, Wash.