SENATE President Pro Tempore Brian Bingman, R-Sapulpa, has made clear that major overhaul of workers' compensation will be a priority for the state Senate next session.
“This is more important than tax reform, even though that is an important issue,” Bingman said. “The number one issue, hands down, is workers' comp, and you'll see some aggressive legislation this year.”
That's encouraging, because Oklahoma's workers' comp rates continue to be a drag on our economy. The Oregon Department of Consumer and Business Services' biennial study of workers' compensation rates in all 50 states found Oklahoma's rates were sixth-highest in the nation. Index rates in every state bordering Oklahoma are at least 41 percent lower.
At a State Chamber event last week, Bingman noted one Poteau businessman pays $90,000 per year in workers' compensation premiums. In nearby Arkansas, he would pay half that amount.
“We are not competitive,” Bingman said. Minor reforms enacted in recent years have generated inconsequential results, so Bingman said it's time for “wholesale change” that makes workers' compensation an administrative system instead of a court-based system.
Bingman's announcement was met with applause from the audience of businesspeople who know the financial burden created by the current system.
However, House Speaker-elect T.W. Shannon, R-Lawton, was notably less direct, merely referring to the need to reduce third-party costs. Shannon made no specific call for action and simply noted that state Rep. Fred Jordan, R-Jenks, will be the House point man on the issue.
This may worry some business officials, as will the fact that Gov. Mary Fallin, whose husband is a workers' comp attorney, has yet to stake a position on moving to an administrative system. Her office merely says she supports efforts to reduce workers' comp costs for businesses. Fallin has been a leader in workers' comp reform for many years.
A complete overhaul will require the support of both legislative chambers and the governor. When just one of the three leaders appears eager to take on that task, businesses have reason for concern. Still, we still think the chances for major workers' comp improvement are better this year than at any time in recent memory largely because businesses are clamoring for it.
Shannon's apparent nonchalance may be designed to gain political leverage in future negotiations rather than signal active opposition to an administrative system. If the Senate leader wants workers' comp reform badly, House leaders may make their support contingent upon Senate backing for Shannon's priorities.
That may frustrate business owners struggling with high workers' comp premiums, but it's an unavoidable part of the political process. Bingman will no doubt do the same thing to Shannon when given the chance. And the governor will do the same thing to both legislative leaders. But in the end, none of them wants to be seen as blocking pro-growth reforms demanded by Oklahoma job creators.
At the chamber event, House Minority Leader Scott Inman, D-Del City, mockingly noted that “three or four” workers' comp reforms have passed in the past six years, each heralded as a major improvement, yet rates remain high. That's true — and the reason so many people now endorse a complete overhaul instead of tinkering at the edges.
Our advice to business owners wanting major reform: Stay engaged in the process. Internal political maneuvering at the Capitol may influence legislative tactics, but public pressure largely determines outcomes.