Initiative to privatize workers' comp rejected

Washington voters have rejected an initiative that would have privatized workers' compensation insurance.

With more than half of the expected vote counted in Tuesday's election, Initiative 1082 was being defeated by more than 16 points, with 58 percent of voters saying no on the ballot.

I-1082 was a business-backed initiative that sought to take away the state monopoly on workers' compensation insurance.

The campaign for Initiative 1082 was part of a long-running political battle between the powerful Building Industry Association of Washington and the state Department of Labor and Industries, which runs the state's workers' comp system.

Initiative supporters argued competition could reduce costs for employers in a time of great economic uncertainty.

Kris Tefft of the Association of Washington Business said the results were disappointing and that business groups would try to reform workers' comp through the Legislature next year.

"I think it shows it was difficult to break down to voters what was at stake in Initiative 1082," Tefft said.

Opponents of the initiative said it would be a mistake to let profit-driven insurance companies into the workers' comp market, which has been run under a public system in Washington since 1911. They also said that the estimated $315 million per year in reduced payments by workers would shift higher costs to employers.

"It's great feeling. It was a long and hard campaign but our main goal was for voters to read the fine print and see it would tax small businesses and hurt families," said Alex Fryer, spokesman for the initiative's opposition. "It's heartening to see voters rejected 1082 so forcefully."

Washington is one of four states that doesn't allow private companies to sell workers' compensation coverage. Some employers self-insure under state supervision, but the rest must buy policies through Labor and Industries.

I-1082 was not one of the marquee match-ups on the ballot but the two sides raised nearly $10 million combined.