MATT GOURAS Associated Press Writer HELENA
Gov. Brian Schweitzer says he may propose a lump sum infusion of cash to deal with the underfunding in an old injured workers program that is backed by the taxpayers. Schweitzer met Wednesday with the State Fund's chief executive, Laurence Hubbard, to discuss a projected deficit in the so-called Old Fund that has grown to $32.6 million. The system covers workers injured on the job before 1990. Schweitzer, after hashing out the genesis of the problem with Hubbard, said it is obvious something will have to be done to address it during the 2009 Legislature. Schweitzer said it appears the state has the flexibility financially to at least chip away at the problem, like he did with a pensions system deficit by using a combination of cash infusions and changes in law. He said problems, like the summer forest fires that prompted a September special session of the Legislature, can't be left unfunded. The governor said he could seek a lump sum of cash for the Old Fund, or prepare the state to make payments over the course of years. The Old Fund is expected to exhaust its reserves by 2013, when the first bill of about $8 million will come due. "I have a demonstrated preference to pay on these things as soon as possible," Schweitzer said. State Fund says it can do little to hold down costs in the Old Fund because old cases are governed largely by past decisions on the claims. The state workers' compensation program was facing a $500 million potential deficit after years of keeping rates artificially low when the 1989 Legislature split it into two funds. The deficit in the Old Fund was paid off with a temporary tax on employers and employees. Schweitzer lambasted a decision made by the 2003 Legislature to take $22 million out of the Old Fund and use the money to balance the state budget. He pointed to a letter Hubbard mailed to the former governor and previous legislative leaders warning them not to take the money. "This kind of Ponzi-style accounting has got to stop," he said. Hubbard said that the deficit in the Old Fund would probably only be about $5 million to $7 million if the lawmakers had not taken the money out in 2003. A legislative panel was set up earlier this month to look at problems at the Old Fund, and to review management decisions made at the State Fund.
