Business Weekly E-Newsletter
August 18-22, 2008
Workers’ Compensation Insurance Premiums Decline in Arkansas
The Arkansas Democrat Gazette published a story on August 10 about workers’ compensation in Arkansas. The story was written to address the impact of the recent decrease in workers’ compensation insurance premiums. Here is the entire story written by Seth Blomeley:
Workers’ compensation insurance premiums have declined, which is good for businesses, but it’s making Workers’ Compensation Commission officials concerned about their budget.
Starting July 1, premiums were reduced 12.8 percent, and various reasons are given for that by different groups. Those include improved safety records at Arkansas plants, high competition among insurance carriers, and state workers’ compensation laws that give lawyers and workers little financial incentive to push for more than a company offers.
The commission operates on the basis of a 3 percent tax levied on workers’ compensation insurance premiums. As premiums decline, so do the taxes collected off those premiums, which could lead to a reduction in revenue for the commission.
“Our only revenue stream is the collection of the premium tax,” said Alan McClain, the commission’s chief executive officer.
In 2007, the commission collected $21.7 million, used to operate the commission, which conducts hearings to determine the validity of workers’ compensation claims, and two trust funds to provide benefits to injured workers. The commission has 128 employees.
With the premium reduction, the commission expects to collect less for at least the next two years. But there is no projection because the amount of taxes paid also is affected by employment in the state. It’s possible if employment goes up dramatically, more could be collected, McClain said.
The uncertain financial situation led Commission Chairman Olan “Butch” Reeves to seek an attorney general’s opinion on whether the commission could legally collect more premium taxes during the year after policies are adjusted.
Attorney general opinions are not binding but are given much weight within state government.
Attorney General Dustin McDaniel, in the opinion prepared by Assistant Attorney General Elisabeth Walker, said the premium taxes for the year ending Dec. 31 must be collected by April 1 the following year. Any tax related to premium adjustments after the first of the year can apply only to that calendar year and be collected the next year.
McClain said the commission asked for the opinion because the commissioners wanted to be sure insurance carriers were properly reporting premiums they’ve received. But he said he had nothing indicating insurance carriers weren’t paying as they were supposed to.
“This was really just an effort to make sure that we are collecting taxes on all workers’ compensation premiums,” he said. “Only in the last couple of years did we start collecting the tax. The Insurance Department previously collected it. So it’s a little more on our radar screen now. Premiums are going down ... so we just started asking questions.”
Act 505 of 2005 by Sen. Denny Altes, R-Fort Smith, switched the collecting responsibility from the Insurance Department to the Workers’ Compensation Commission.
Alice Jones, Insurance Department spokesman, said the change was made to “take the middleman out of the process.”
The rates for workers’ compensation premiums vary according to the job covered, she said. For example, the premium on clerical workers is 40 cents per $100 of payroll while the rate for house builders is $22.39 per $100 of payroll.
McClain said all of the premium is paid by the employer. He said generally every employer with at least three employees must provide coverage. Exceptions include farm workers and domestic servants. The commission doesn’t tally how many workers in Arkansas are covered and how many aren’t.
Alan Hughes, director of the Arkansas AFL-CIO, said he hopes the commission takes a more active role in collecting the tax.
“We’d like to see where there is a better audit system to make sure these employers [through the insurance carriers] are paying the tax,” Hughes said. “They might say they have 200 employees, but it turns out they have more than that.”
Hughes said the reduced rate is more evidence that the 1993 workers’ compensation changes in the Legislature have hurt workers.
He said it’s “dern near impossible” for workers to be properly compensated for their injuries.
“Lawyers can’t make any money out of it,” Hughes said. “It takes a lot of time to work on workers’ comp cases.”
That means less expensive payouts by insurance companies, he said.
“The carriers are making a killing,” Hughes said.
But Lynn Tatum, the workers’ compensation chairman for the State Chamber of Commerce and a retired workers’ compensation specialist for Tyson Foods, said the system “works the way it’s intended to.”
“We’ve got a system in Arkansas that’s designed to do the most important thing for insured workers, and that’s to provide quality medical care and temporary benefits and get them back to work. Usually they are able to get back to work without litigation. There are states where 80 percent plus of the cases are litigated and lawyers get a bigger share of the pie. Litigation just stalls the entire system. We don’t have that in Arkansas.”
Tatum said the insurance rate announcement by the Insurance Department is “advisory” but the carriers usually follow it because of the competition in the industry.
Jones, with the Insurance Department, pegged rate reduction on “the emphasis on safety awareness” by carriers and Arkansas companies.”
Steering Committee Adopts Strategy for Proposed Union Card Check Legislation
A steering committee set up to develop a strategy to oppose the Employee Free Choice/Union Card Check legislation expected to be re-introduced in the next Congress met on August 14 to review bids from public relations firms and determine the next course of strategy.
CJRW, headquartered in Little Rock, was selected from among the bids. The agency will work to develop a comprehensive campaign, which will include naming the coalition, polling, editorials, messaging, possible advertising and coordination of public appearances. A sub-group of the steering committee will meet again at 10 a.m. on August 22 and schedule the next full meeting of the coalition.
All State Chamber/AIA members are strongly encouraged to spread the word about this issue to fellow members of the business community as well as to employees. It is vitally important that our members of Congress hear the business perspective on this issue; they will be in Arkansas during the August Congressional Recesses. A great way to communicate with our members of Congress is to attend public appearances that they make in your home town.
We are discovering almost daily that people do not know about this proposed legislation, they do not understand this legislation, they think this legislation will not apply to their business or they believe it is not important in Arkansas because we are a “right to work” state.
If this legislation becomes law, unions can be formed in any business by simply obtaining the signature of more than half of a recognizable group of employees on a card. If a contract is not reached within 90 days, then the matter goes to binding arbitration. The unions have one year to collect the signatures and the law eliminates the use of secret ballots—only the signed cards are used to determine if a union will be formed. The size of business does not matter and our “right to work” laws will have no impact.
State Chamber/AIA Annual Meeting, Governor’s Summit, Other Events Slated
The 80th Annual State Chamber/AIA Meeting will be held Wednesday, October 15, at the Statehouse Convention Center in Little Rock, in conjunction with Arkansas Works 2008: The Governor's Summit on Education and Economic Development , whichwill be held on October 15-16 at the Statehouse Convention Center in Little Rock. For your convenience, we have scheduled these events back-to-back.
Check-in for our Annual Meeting will begin at 11 a.m. on October 15. For our lunch at noon, we are working on a very exciting program. We are confident that our world-class, keynote speaker will be someone you do not want to miss. Following lunch, we will convene at 1:30 p.m. to present for approval our positions on the upcoming 2009 Legislative Session. That will be followed by our General Business Session, which will end at 4:30 p.m. Our Reception, beginning at 5:30 p.m. at the Statehouse Convention Center, will open the Governor’s Summit.
Other scheduled events include:
- The Arkansas Chamber of Commerce Executives (ACCE) Annual Meeting on Tuesday, October 14 at the Little Rock Regional Chamber of Commerce.
- The Arkansas Economic Developers Board Meeting on Wednesday morning, October 15, at the Little Rock Regional Chamber of Commerce.
- Leadership Arkansas Class III Session I on Wednesday morning, October 15, at the Little Rock Regional Chamber of Commerce.
- The Governor’s Quality Awards from 7 to 9 p.m. on Wednesday evening, October 15, in Wally Allen Ballroom A of the Statehouse Convention Center. For Governor’s Quality Awards ticket or event information, contact Sue Weatter at 501-210-4201 or sweatter@arkansasstatechamber.com .
On Thursday, October 16, the Governor’s Summit will begin at 8 a.m. at the Statehouse Convention Center and will conclude at 3:30 p.m. The Summit will assemble business, education and policy leaders from all 75 counties to develop a vision for every community and the leadership to implement the vision. The Summit has the potential to be an extraordinary gathering. Together we will assess our strengths, define our weaknesses and determine our opportunities.
The registration cost for both the State Chamber/AIA Annual Meeting and the Governor’s Summit is $175 and $100 for each individual event. To register, click here .
Leadership Arkansas Class III Schedule Announced
Leadership Arkansas Class III will kick off its third class with a Retreat on September 14-15 at Mountain Harbor Resort near Hot Springs.
Other planned sessions include:
Session I – Arkansas State Chamber/AIA Annual Meeting, October 15, Little Rock
Session II – Tourism, December 4-5, Eureka Springs
Session III – South Arkansas Economy, January 29-30, 2009, Magnolia
Session IV – Legislative, February 23, 2009, Little Rock
Session V – Economic Development, March 26-27, 2009, Fort Smith
Session VI – Northeast Arkansas Economy, May 21-22, 2009, Jonesboro
Session VII – Northwest Arkansas Economy, June 25-26, 2009, Fayetteville
Graduation – June 26, 2009, Fayetteville
We are seeking sponsors for all sessions at the $2,500 presenting level and the $1,000 participating level. Sponsors will be recognized in signage and materials and have the opportunity to network with Leadership Arkansas members at the appropriate session reception.
If you would like to be a session sponsor or need further information about Leadership Arkansas, please call Susie Marks at 501-210-4206.
Randy Zook Welcomed, Susie Marks Honored at State Chamber/AIA Reception
More than 200 people, including representatives of each of the state Congressional delegates, State Chamber/AIA members, various state representatives and senators, and representatives of various state agencies, gathered at Trapnall Hall in Little Rock the evening of Tuesday, August 12 to meet and welcome new State Chamber/AIA President and CEO Randy Zook and to honor and recognize Senior Vice President – Programs Susie Marks.
Zook was introduced and welcomed in remarks by Governor Mike Beebe. Zook joined the State Chamber/AIA in his new position effective July 28, replacing Paul H. Harvel, who left after two years to become the new president and CEO of the Arkadelphia Regional Economic Development Alliance. Zook previously worked as Deputy Director of the Arkansas Economic Development Commission.
Marks was honored for receiving the prestigious Certified Chamber Executive (CCE) designation recently during the American Chamber of Commerce (ACCE) Annual Convention in Pittsburgh, Pennsylvania. Marks is one of only nine Chamber executives in the state to have received this designation. The CCE program, the only national certification for chamber professionals, represents the highest achievement in the Chamber management profession.
For photos of the reception, click here .
Small Business Council Sets Meetings through May 2009
The State Chamber/AIA Small Business Council has established a schedule of meetings through May 2009.
The meetings will be held from 11:30 a.m. to 1 p.m. in the Bob Lamb Conference Room at our Little Rock office unless otherwise indicated.
Wednesday, September 17, 2008 – Insurance. Jeff Everetts with Background Information System of America is the lunch sponsor. A representative of the U.S. Chamber of Commerce will also make a presentation on the proposed federal Union Card Check Legislation.
Thursday, November 20, 2008 - Congressional Presentation
Thursday, January 22, 2009 - Government Regulation
Thursday, March 19, 2009 - Employee Benefits
Wednesday, May 6, 2009 - Information Technology
Small Business Council meetings are open to all State Chamber/AIA members. Each meeting will feature a short presentation from a member in regard to the service that they offer (first-come, first-served).
If your company would like to provide a short presentation on your service, or sponsor the lunch portion for one of the upcoming Small Business Council meetings, or if you need further information, please contact Jeff Thatcher at (501) 210-4205 or jthatcher@arkansasstatechamber.com .
Manufacturing Matters 2008 Conference Slated
Arkansas Manufacturing Solutions is hosting Manufacturing Matters: 2008 Conference: Maximize Results Minimize Waste on September 17-18 at the Doubletree Hotel in Little Rock.
Robert Smith, senior vice president of industrial programs for Dassault Falcon Jet, and Hank Cox, vice president of media relations for the National Association of Manufacturers (NAM), are the keynote speakers during the conference on September 18. Also scheduled are a number of workshops, panels and resource exhibits.
For further information or to register, click here .
Welcome to Our New Members
Thanks to the following companies and organizations that have recently joined the State Chamber/AIA:
Combs & Company
Commercial Beverage Equipment Inc.
Doubletree Guest Suites
MP Productions
North Little Rock Municipal Airport
University of Arkansas System
Umarex USA Inc.
Union Pacific Railroad
Thanks to Our Pinnacle Members
We wish to express special thanks to all of our Pinnacle investors, the respected companies that support the State Chamber/AIA at the highest annual investment levels. We appreciate all that they do for us.
APEX
Alltel Corporation
Entergy Arkansas, Inc.
Wal-Mart Stores, Inc.
SUMMIT
Chesapeake Energy, Inc.
Cox Communications
Cranford Johnson Robinson Woods
Tyson Foods, Inc.
PEAK
Arkansas Blue Cross and Blue Shield
Arvest Bank
AT&T Arkansas
CenterPoint Energy Southern Gas
Electric Cooperatives of Arkansas
FedEx Freight - East
Georgia-Pacific Corporation
Harps Food Stores, Inc.
Kraft Foods
Oaklawn Jockey Club
Pathfinder Exploration LLC
SemGroup LP
Southern Bancorp, Inc.
Southland Park Gaming & Racing
Southwestern Energy Company
State Farm Insurance
Weyerhaeuser Company
Windstream Corporation
XTO Energy, Inc.
CROWN
Acxiom Corporation
AEP Southwestern Electric Power
Albemarle Corporation
Alcoa
Alta Resources LLC
American Greetings Corporation
America's Car-Mart, Inc.
Arkansas Employees Federal Credit Union
Arkansas Farm Bureau Federation
Arkansas Oklahoma Gas Corporation
Arkansas Western Gas Company
Bank of the Ozarks
CardinalHealth
CenterPoint Energy Gas Transmission Company
Crossland Construction Company
Deltic Timber Corporation
Dynegy
Entegra Power Group LLC
Evergreen Packaging Company
Farm Bureau Mutual Insurance Company of Arkansas, Inc.
Forest Oil Corporation
Glad Manufacturing/A Clorox Company
Golden Living
International Paper Company
Kimberly-Clark Corporation
Lion Oil Company
Metropolitan National Bank
Murphy Oil Corporation
Nabholz Construction Corporation
Nucor-Yamato Steel
OG+E
Pfizer Pharmaceuticals
Philander Smith College
Pinnacle Foods Group LLC
Potlatch Forest Products Corporation
Pulaski Technical College
Rheem Air Conditioning Division
Riceland Foods, Inc.
Signature Bank of Arkansas
Simmons First National Corporation
Stephens, Inc.
Storm Cat Energy
Suez Energy North America
The Clorox Company
The Trane Company
US Bank
Waste Management
Wright Lindsey & Jennings
Calendar of Events
August 24 – 27 Arkansas Economic Developers Annual Conference
Hot Springs Convention Center
September 14-15 Leadership Arkansas Class III Retreat
Mountain Harbor Resort
September 17 Small Business Council Meeting
11:30 a.m. – 1 p.m.
State Chamber/AIA Conference Room
September 17-18 Manufacturing Matters 2008 Conference
Doubletree Hotel
Little Rock
October 14 Arkansas Chamber of Commerce Executives Annual Meeting
Little Rock Regional Chamber of Commerce
Little Rock
October 15 Arkansas Economic Developers Board Meeting
Little Rock Regional Chamber of Commerce
October 15 Leadership Arkansas Class III Session I
Little Rock Regional Chamber of Commerce
October 15 80th State Chamber/AIA Annual Meeting
Statehouse Convention Center
Little Rock
October 15 Governor’s Quality Awards
7 – 9 p.m.
Wally Allen Ballroom A, Statehouse Convention Center
Little Rock
October 15 -16 Arkansas Works 2008:
The Governor’s Summit on Education and Economic Development
Statehouse Convention Center
Little Rock
