Don’t use workers’ comp funds to balance budget
The New York State budget will be a hot topic across the state for the next few weeks. Examination of the budget raises more questions than answers.
In the governor’s proposed budget, a raid of the New York State Insurance Fund surplus is proposed to shift $1.75 billion to $2 billion to the state’s ailing general funds. While the construction industry will see some benefit from this, roughly $500 million via the Transformative Capital Fund, the overall impact is much more negative than positive. At the expense of all State Insurance Fund policy holders, the state budget will move closer to being balanced this year. However, nothing about this shift fixes the long-term budget problems or the workers’ compensation system.
New York’s system remains one of the most expensive in the nation and does a poor job of helping injured workers heal so they can return to the workforce. Using workers’ compensation funds to balance the budget is especially impactful for small businesses, which are often customers of the State Insurance Fund. They are paying a high price for insurance already and would probably never imagine that they were writing a tax check to the state’s General Fund as part of their insurance premium. The fund’s capital reserves, or “surplus,” exists to pay claims.
I urge not only my peers in the construction industry, but all New York State small businesses to have their voices heard. If the fund is truly over capitalized, then the excess funds would be more appropriately spent by returning them to the policy holders who paid the premiums, reducing future rates or making system improvements to achieve better outcomes. As an advocate for construction, we support construction spending, but this plan is the wrong approach. You can’t fix a broken budget by taking money from a different broken system. Instead, you need to fix them both.
James C. Logan
Construction Exchange of Buffalo
and Western New York