There is an old cliche that says "only two things are certain in life -- death and taxes." If the unprecedented increase in workers' compensation rates recently proposed by the National Council on Compensation Insurance (NCCI) -- a third-party industry watchdog group -- is approved, we may soon see a death tax on many South Carolina businesses, especially small businesses.

A few weeks ago, my concern about increasing workers' compensation premiums in South Carolina was raised even higher by an NCCI announcement calling for a crippling 32.9 percent increase in workers' compensation premiums. According to NCCI, factors driving the increase include rising medical costs and consistent delays by the Workers' Compensation Commission in the settlement of cases. This proposed increase comes on the heels of double-digit increases in the previous two years.

In order to ensure an open review of the proposed increase and to prevent any unwarranted increases, various state associations as well as numerous local chambers have teamed up with the South Carolina Department of Consumer Affairs and asked for a public hearing before the South Carolina Administrative Law Court. When NCCI recommended a 17.6 percent increase in workers' compensation premiums last year, a similar hearing request resulted in a reduction of the premium increase to only 11.4 percent.

From an economic development standpoint, we need to be mindful that most businesses in South Carolina are small businesses. These small businesses are one of the keys to growing our economy so we must strive to maintain a favorable environment for their future growth and prosperity. Legislators (myself included), business leaders and others feel that a public hearing is necessary to determine if the amount of NCCI's request is justified. Does the 32.9 percent increase accurately reflect the conditions in South Carolina? Do the NCCI's numbers back up their assumptions? These are questions that the small business owners and working families in South Carolina deserve to have answered.

The Department of Consumer Affairs estimates that the increase could cost South Carolina businesses at least an additional $130 million dollars a year. If this debilitating rate increase goes into effect, we may well see our businesses closing down or leaving South Carolina in favor of a more pro-business environment.

On the other hand, if a rate increase believed acceptable by insurance companies is not adopted, some fear that the few insurance companies that provide workers' compensation coverage in the state may opt out of South Carolina, leaving our marketplace with no real competition. These complex problems are indicative of much larger problems in the state's workers' compensation system that must be addressed legislatively.

As a former small business owner in South Carolina, I am familiar with the insurance costs that accompany everyday operation of a small business, including workers' compensation insurance. Additionally, as a state representative, I hear from multiple constituencies telling me the costs of doing business in South Carolina are rapidly becoming untenable. In a state under fire for economic stagnation, unstable employment rates, and the resulting reduction of the state's AAA bond rating, this proposed workers' compensation rate increase very well could be the straw that breaks the back of small business. In other words, businesses may close, people may be out of work and the state's entire economic picture could be irreparably damaged. Therefore, it is paramount for the future of economic development in South Carolina that reforms be enacted now.

Because insurance costs represent the second highest expenditure for small businesses -- after wages -- I have worked for several years with the South Carolina Chamber of Commerce and other members of the business community to pursue comprehensive workers' compensation reform. Although the reform efforts have sparked much debate about change and shined some light on the Workers' Compensation Commission, it is clear that the debate and light alone have not been enough to ease the burden placed on South Carolina businesses.

In the 2005 legislative session I sponsored reforms targeting specific areas of the workers' compensation system related to increasing costs, controlling waste and creating efficiency. Such legislation provides for reforming the workers' compensation procedural structure (by moving appeals from hearing commissioner panels to the Administrative Law Court), reining in the compensability of repetitive trauma injuries and dissolving the Second Injury Fund. These are three remedies that can reduce the escalating cost of our workers' compensation system by reducing administrative costs, limiting excessive awards and eliminating Second Injury Fund assessments.

It's a matter of simple common sense. We're trying to attract business and industry to South Carolina, not push it away. Without significant modification of the Workers' Compensation system and relief from its attendant costs to business, the state's pursuit of a "more prosperous, knowledge-based economy" we keep hearing about will be severely compromised.