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Letters Workers Comp article lacked balance Editor. Bill Knight's article in the April 1995 Illinois Issues entitled "Workers Comp: renewed battle over business costs vs. employee rights" (see page 17) lacked the balance and background that most of us have come to expect from your magazine. Some of the glaring inaccuracies include references that "fraud" wasn't a problem in our system; that two-thirds of employers surveyed feel that workers comp costs are not significant in deciding where to do business; and that connecting workers compensation to competitiveness is invalid. These opinions expressed in the Bill Knight article attempt to downplay the significant and serious problems associated with workers compensation. First, the fraud issue. Published and broadcast reports have estimated that workers compensation fraud ranges from 5 percent to as high as 40 percent. To read that fraud is not a problem — according to David Morrison of the Coalition for Consumer Rights — is ridiculous on its face. For the sake of argument, assume the "Coalition" is correct and fraud appears in only 5 percent of the cases. That means in 1993 alone the Illinois Industrial Commission's caseload had 3,500 fraudulent cases. This is totally unacceptable! Each dollar removed from the system fraudulently is a dollar better spent somewhere else. Keep in mind that the Industrial Commission's backlog is 4,000 cases. How much time and energy is spent adjudicating fraudulent claims? How many innocent workers hurt on the job and rightfully entitled to benefits have to wait because of these fraudulent claims? Would there be a backlogif we eliminated fraud? Knight also attempted to downplay the economic importance of workers compensation by referencing a Towers Perrin study which "showed that almost two-thirds of employers surveyed feel that workers compensation costs aren't significant in deciding where to do business." Indeed, there are a number of factors that are considered in making plant location decisions: availability of raw materials, transportation and energy costs, market location, labor market considerations and government mandated costs, i.e., taxation, unemployment insurance and workers compensation. It is important to note that a third of those surveyed for the Towers Perrin study believe that workers compensation was significant in making a location decision. When you factor in the other considerations, it is obvious that workers compensation is an overriding concern of business and industry. In 1995, over $2.5 billion will be spent in workers compensation system costs. Workers compensation is far and away the most important government-controlled economic criteria in making a location decision — a third of those surveyed agreed. Finally, a Republican member of the House of Representatives was quoted as saying "this idea of connecting workers comp with Illinois being more competitive economically isn't valid." The state representative making that statement has no clue of the influences and pressures of running a business. When comparing costs in other Midwest industrial states, Illinois' workers compensation costs are constantly higher. Manufacturers can operate almost anywhere, and while making a location decision, all too often, workers compensation costs cause Illinois to lose more plants. Maybe next time [Bill] Knight should call a former Illinois manufacturer who now operates in another state so he can hear first-hand about lost opportunities. Or better yet, the unemployed worker whose job evaporated and is left behind.
Gregory W. Baise
Bad debt: time to cut losses Editor: The hotel settlement I negotiated regarding the Springfield Renaissance and Collinsville Holiday Inn is getting much attention, and that is fine. However, I am concerned the facts of this settlement are being glossed over. Citizens are continually being told that I have forgiven a 30-million-dollar debt. That is not true. That debt was forgiven by former Treasurer Jerome Cosentino when he twice modified the loan terms and wrote down the amount due by the hotel owners. That all occurred as part of restructuring deals struck in 1988 and 1991. At the same time, former Treasurer Cosentino agreed to eliminate all personal liability to the investors. In essence, he cut them free should their investment group default on the loan. This is understandably the hardest part for citizens to comprehend. These investors were loaned millions of tax dollars and then told, "If you don't pay us back, that's okay. We won't expect you to be personally responsible for helping recoup the losses." None of "us" have the ability to borrow money without paying it back. Yet, that is the deal struck by former Treasurer Cosentino for these hotel investors. It was later held as valid by former Attorney General Roland Burris. Thousands of pages of legal documents contain the specific language that authorized all of this. When I first came to office, I looked for any way to end this debacle and recover the losses. My legal staff worked feverishly toward that end. Unfortunately, this well-crafted deal appears to be air-tight and offers me no opportunity to go after the investors at this time. I wish I had the ability to fix mistakes generated by those who preceded me. But, I can't. However, I can stop the situation from growing even worse. If I were to allow this deal to continue, the potential is strong that we would lose millions more for the state. If we receive the $10 million negotiated as a part of this settlement, at least I can begin the healing process by investing that money and beginning the partial recovery of our losses. That is what I was elected to do. A bad investment is a bad investment. We've carried it for 13 years. No one in the private sector would have allowed this to go as long as it has, let alone hang with it another 15 years. There comes a time to cut your losses ... that time on this deal is now.
Judy Baar Topinka
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Letters to the Editor 40/June 1995/IllinoisIssues |
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