A firm hired by the state to conduct an actuarial review of Missouri’s Second Injury Fund completes its work and delivers the final product to Governor Matt Blunt (R-MO). The study by PricewaterhouseCoopers concludes the Fund is headed toward a negative balance by 2009, with declining fund balances experienced through 2012, assuming the maximum rate of assessment – that’s the amount paid by businesses – is maintained at three percent.
PricewaterhouseCoopers’ Chris Walker says the problem with the fund is quite simple: inflows – revenues, and outflows – payments to individuals, are not in balance as there is more money going out than is coming in.
The study also reviewed the impact of the Schhoemehl case, a Missouri State Supreme Court ruling that basically extended workers’ compensation benefits to survivors of beneficiaries who have died. It found that while the Schoemehl case did increase the amount of money leaving the Second Injury Fund, it did not contribute significantly to the Fund’s approaching bankruptcy.
The study puts forward a number of recommendations that might ensure solvency – including one suggesting the amount paid by businesses be increased. That proposal does not sit well with the business community.
Mike Grote with the Missouri Chamber of Commerce says there is no need to make a hasty decision because there is time to, "see what opportunities lie out there that don’t cause increased costs on businesses."
Jim Kistler, representing Associated Builders and Contractors, says, "Contractors typically pay about three times the average rate in workers’ comp premiums." He adds, "I think there are a number of other avenues that have to be explored."
Brad Jones, Missouri State Director of the National Federation of Independent Business, wants to see the state take action to limit spending on benefits before it goes to business asking for more money. "We’re looking at a situation where we’ve got an absolutely out of control amount of expenditures," says Jones. "And they’re talking about the revenue stream not being adequate." Jones continunes, "I think you’re going to have to get one in line before you can even talk about the other."