Latham, NY – Seventy-eight percent of respondents to a new survey of New York State municipalities report that their workers’ compensation costs have increased since 2007, when New York State passed the Workers’ Comp Reform Act, despite cost reduction as a key goal.
More than half of all respondents said that their public entity’s workers’ compensation costs comprise a significant portion of their operating budget. The survey was conducted earlier this year by the Workers’ Compensation Policy Institute, the non-partisan research affiliate of the Public Employer Risk Management Association (PERMA).
Although municipalities expected relief with the passage of the 2007 reform, savings to employers have not been realized. In fact, costs, as evidenced by the high percentage reporting increases since its enactment, have only increased. State surcharges, which were also supposed to be eased by the reform, continue to rise and were 20.2 percent just last year.
The Workers’ Compensation Policy Institute conducted the online survey of municipal representatives from across New York State on workers’ compensation and how it affects their public entity.
More than 150 respondents representing towns, villages, cities, fire districts, libraries, public authorities, and schools heeded the Institute’s call and provided the following responses to the seven questions asked:
- New York State municipalities remain committed to public safety and services despite significant obstacles, including increasing workers’ comp costs, the property tax cap, the lack of mandate relief, and the goal of preserving jobs.
- 38 percent felt workers’ compensation costs threaten their ability to deliver the services taxpayers expect and threaten their ability to create or keep jobs.
- 73 percent have a formal workplace safety program and either plan to increase their commitment to it or plan to maintain their current investment in it.
- In addition, the recently passed two percent cap on property tax levy significantly restricts New York’s municipalities’ ability to raise revenues.
“The issue is complicated by the fact that the state is restricting local government revenue and then imposing regulations that drive up workers’ compensation premiums,” said Stephen Altieri, Board Chair of the Workers’ Compensation Policy Institute. “This situation is not sustainable in the long term.”
These costs, combined with the other mandates in New York State, put intense pressure on all New York employers and weaken the economic vitality of the state and its communities. For municipalities and other public entities, the costs put added pressure on the tax base and the municipalities’ ability to provide services – pressure that will only worsen under New York’s new property tax cap.
The full survey report is available here: WCPI Workers’ Compensation Costs Survey (PDF).