A $10 Million Boondoggle You’re Going to Pay For

Last week, the Democrats in the House rammed through a piece of legislation (HB 2622) in which the state will loan $10 million to a new “public” workers’ comp insurance company to compete with the over 300 companies now licensed to sell such insurance in Illinois.

According the sponsors, we’re going to mimic such companies now operating in a number of other states. The bill does not address the causation standards in Illinois, which result in employers paying, on average, $2.23 per $100 in payroll in workers’ comp premiums. They think that by taking the “profit” out of workers’ comp insurance, they can drive down premiums.

I pointed out to the sponsor in the Labor Committee hearings on this bill that anyone who’s watched Shark Tank on TV would know that the first thing a potential investor would want to see would be the business plan explaining in detail how the investor was going to get his or her money back. If the taxpayers of Illinois are going to put $10 million (which we don’t have) into this venture with a promise to be repaid in 5 years, with interest, then the least she could do is tell us how that’s going to happen. We were told that the business plan would be forthcoming after the company was set up. In other words, we’d have to pass the bill to see what was in the bill. Sound familiar?

The Laborers’ union testified on behalf of the bill. I pointed out that if this was such a good, money-making idea, why didn’t he go back to his union and suggest that they fund this company with $10 million from their pension fund instead of putting the taxpayers on the hook. No response.

My seatmate Chad Hays made the comment that if he were to die and come back again as a State representative, he’d want to do so as a Democrat. He says it’s much easier, because the math never has to work on any bill you’re trying to pass.

I challenged the sponsor during debate on the House floor, and got nothing but palaver in return. Of course the bill passed in spite of that. You can see part of my comments by clicking here.

This entry was posted in Cost of Government, Illinois Budget, Workers' Comp. Bookmark the permalink.

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