Injured worker fund raid proposal faces tough opposition

COLUMBIA, S.C. - The state's top business group is telling the House it should back off a budget committee's proposal to raid a fund intended to help injured workers get back on the job.

The state Chamber of Commerce and other business groups oppose a House Ways and Means Committee proposal that shuts down the Second Injury Fund and takes $40 million from the fund to balance the state's budget.

The Second Injury Fund reimburses insurance companies that have to pay out worker's compensation claims for an employee who had a previous work-related injury. The fund collects money each year from insurance companies to help pay for its operations and companies are spared increased premiums when they rehire injured workers.

While state chamber members are divided on whether the Second Injury Fund should be scrapped, they agree the state shouldn't take money from the fund, Hunter Howard, the chamber's chief executive officer, said.

"We feel like that's money that is set aside for employees that are hurt and no one knows what those liabilities are until they're resolved," Howard said. It is "essentially taking their money."

State budget writers have routinely raided trust accounts to balance budgets during the past three years as the economy stalled. But this is different, because it's not the state's money, Howard said.

These "are trust funds that don't really have any connection to the state. ... These are moneys that have been put in by business for their employees' protection," Howard said.

"I'm actually very surprised that they haven't called me to talk with me about this," said Ways and Means Chairman Bobby Harrell, R-Charleston. "I almost feel ambushed by them."

An unusual coalition will join the chamber at a news conference Tuesday. Business groups including the National Federation of Independent Business, South Carolina Manufacturers Alliance and the South Carolina Trucking Association will be joined by the South Carolina Trial Lawyers Association and the Association of South Carolina Claimant Attorneys for Worker's Compensation.

That news conference comes as the Ways and Means budget hits House members' desks. Now they will have to decide to whether to pull $40 million out of the $5.3 billion budget. That will create problems for 58 state agencies that were told Second Injury Fund cash would help shield them from budget cuts.

For instance, the state court system was to get $3.5 million, or 9.5 percent of its budget, from the Second Injury Fund. And the Department of Disabilities and Special Needs and Department of Mental Health each lose $4 million, or more than 2 percent of their budgets.

Those problems shouldn't be there in the first place, Howard said. "You need to look at the legitimacy of the money before you spend it," he said.

Harrell maintains there's no reason to keep the Second Injury Fund, even if the money has to be pulled out of agency budgets. Other states have done away with similar systems, and "we clearly ought to get rid of it," Harrell said.