The Washington State Department of Labor & Industries (L&I) announced that workers’ compensation insurance rates need to increase an average of 43 percent in order to “break even” and avoid dipping into 2003 reserve funds.

Ironically, the increase was predicted a year ago by the Building Industry Association of Washington (BIAW) in its October 2001 Building Insight newsletter. The BIAW said the increase is a result of the “grossly inefficient” operation of the department and excessive benefits paid to workers, combined with a lack of leadership by L&I Director Gary Moore and stock market losses in L&I’s reserve fund.

In past years L&I has managed to keep rate increases artificially low by “buying” down rate increases with money from the L&I reserve fund, the BIAW charged.

For four years, L&I’s reserve fund grew only because of gains in the stock market. With stocks declining steadily as they have been since Sept. 11 2001, L&I’s reserve fund has dwindled. L&I stock investors lost $328 million of fund assets in 2002.

According to BIAW, this rate increase is combined with increasing unemployment insurance taxes, double-digit increases in health insurance costs and “out-of-control” liability insurance rates, 100 percent to 500 percent increase.