Cut in workers' comp tax to save more than $12 million

Missouri Gov. Bob Holden announced Oct. 15 that the administrative tax on the state's workers' compensation insurance premiums will drop by 50 percent in 2004, according to a news release from the Missouri Department of Insurance.

The tax decrease will save employers more than $12 million.

The administrative tax will decline to 1 percent of premiums in 2004, and the surcharge that funds benefits from the Second Injury Fund will remain at 4 percent.

"This administration is committed to working with the business community to reduce workers' compensation costs while maintaining the integrity of the workers' compensation system," Holden said.

Renee Slusher, director of the Division of Workers' Compensation, said the reorganizations in her office, as well as the larger tax pool related to an increase in insurance premiums, have allowed the department to make the tax cut.

The department's reorganization efforts include streamlining data entry, changes in mail service and increased use of electronic filings. These efficiency efforts enabled the department to cut state positions and save money for Missouri employers.

"By streamlining our state operations, we are able to help improve the business climate for Missouri employers and continue to provide needed services to those who depend on the workers' compensation system," Slusher said.

State law requires the director of the Division of Workers' Compensation to determine the rate of tax to be paid in the following calendar year, based on projected expenditures.

Revenue from the Second Injury Fund surcharge pays for benefits to injured workers who had previous disabilities. The amount of the surcharge must be adequate to cover payments from the fund during the calendar year.