Backing grows to privatize workers comp

The Utah Taxpayers Association has endorsed the privatization of the state's Worker's Compensation Fund and is pushing Gov. Mike Leavitt to call a September special session to resolve the issue.

The association is joined by the Utah Business Coalition, which has adopted a set of principles to guide any drafting of a bill that would change how the fund operates.

Leavitt, however, does not see the need for a special session this fall and opposes any alteration to the fund, which serves as the "carrier of last resort" for employees and employers who can't get Worker's Compensation insurance elsewhere.

"If there is not a clear pattern for action or if lawmakers have not a desire to meet, then there's no value," in calling a special session, Leavitt said recently.

The coalition represents such groups as the Utah Manufacturers Association and the Utah Retail Merchants Association, which maintains the state is entitled to no "founder's equity" or other settlement should it relinquish its control over the board of directors.

Among the principles it endorses for the operation of the fund:

• Retention of the federal tax exemption to ensure the lowest possible rates to employers.

• Continuing to serve as the insurer of last resort.

• Election by policyholders for the fund's board of directors.

• Employees of Utah companies working in other states should be eligible for coverage through the fund's wholly owned for profit subsidiary.

It is the operation of the fund's for-profit subsidiary, which writes $30 million in business in Idaho, that has put the fund at odds with officials there, who say the fund's license to operate must be relinquished by Nov. 1 unless it severs its ties with Utah state government and becomes private.

"Mutualization is essentially a baby step, which . . . allows the fund to have a more diverse pool of insured employees other than just Utah," said Utah Taxpayers Association President Howard Stephenson.

"That is especially important for Utah-based companies that have employees in neighboring states."

For more than a year, state officials have been grappling on what to do with the fund, which is a quasi public entity initially established by the Utah Legislature in 1917 with an investment of $40,000.