Legislation to Remove Budget Authorization to Raid Employer Dollars from BWC & IC Advances

Earlier this year, a dangerous provision was added to the state budget bill, House Bill 49, which would have allowed the Office of Budget and Management (OBM) to transfer up to two percent of the Bureau of Workers’ Compensation (BWC) and Industrial Commission (IC) budgets to the General Revenue Fund (GRF). Authority to transfer budget money from agencies is not a new concept, as it is known colloquially as the “rotary raid” of agency budgets when the state is looking for money to fill budget gaps at the end of state’s budget cycle. However, this would have been the first time the BWC and IC were included in the list of agencies potentially subjected to this raid. This would have set a dangerous, and potentially illegal, precedent of raiding entirely employer funded agencies to finance general government operations, through the GRF.

Unlike the state’s main operating budget, both the BWC and IC are funded entirely by the payment of premiums and assessments by Ohio’s employers. Though the allocation of the BWC and IC budgets must receive legislative approval, no GRF dollars are used to fund the agencies. Therefore, any transfer of money from the budgets of these agencies would have been taking money paid by Ohio’s businesses to obtain workers’ compensation coverage and pay injured workers’ claims to fund state government. Further, this could have led to premium rate hikes beyond the actuarial needs of the BWC to account for potential raids or to aid in funding future budgets.

The Ohio Chamber continually voiced concern that the language set a dangerous precedent authorizing the siphoning of funds when budget shortfalls occur and that there may be legal issues with directing funds to the GRF that are constitutionally reserved for the treatment of injured workers and the promotion of safer workplaces. Thankfully, a provision to repeal this authorization was inserted into a recent bill, Senate Bill 8, during conference committee to workout differences between the House and Senate on that legislation. This will remove the offensive language and restore confidence that money paid by Ohio’s employers for workers’ compensation purposes will not be used to subsidize general government operations. This is a big win for Ohio’s employers to eliminate this very dangerous precedent.