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July 18, 2000

Comp costs likely to hold level at best next year

Workers' comp rates in New York will be reduced an average 2.5 percent effective Oct. 1.

However, "assessments"-a surcharge on comp premiums that employers also must pay-will increase by an average of 2.6 percent. As a result, overall costs are unlikely to go down.

Those assessments pay for the Second Injury Fund and other special funds, as well as operating costs of the state Workers' Compensation Board.

The Business Council's Workers' Compensation Committee is evaluating all special funds, especially the Second Injury Fund, which is the most costly, said Kerry Kirwan, The Business Council's legislative analyst for workers' comp. Sixteen other states have already eliminated or reformed their second injury funds, she noted.

The Governor's office said some employers will see rates fall by as much as 27 percent. It was not immediately clear how individual industries would be affected, and whether any would face premium increases.

Including reductions in the past several years, premiums have been reduced an average 35 percent since 1995.

"By reducing the cost of doing business, we are making New York even more competitive," Governor Pataki said.

The Governor has appointed a Workers Compensation Special Funds Study Commission to review the funds and recommend possible reforms. Patrick McLaughlin, training manager for UPS in upstate New York, represents The Council on that task force.