Department of Labor & Industries Director Judy Schurke, labor unions and other defenders of the status quo in workers' compensation have been touting this letter from State Auditor Brian Sonntag which, they claim, proves the state fund is financially strong.  But in highlighting one paragraph in Sonntag's letter, they're leaving out the rest of the story.

In fact, the Auditor stands by the findings issued in this report, despite overwhelming pressure from Schurke and, apparently, organized labor. In his follow-up letter, he says,

"Again, our report is a warning that if this condition continues, the future liabilities may exceed assets within a few years, creating a financial hole difficult to recover from."

Does this sound like a retraction?

The Department may have finally cowed Sonntag into saying "FINE... you still have money to keep the lights on for now," but that's really nothing more than a response to L&I's straw man argument.  Nobody has been making the argument L&I doesn't have the money to meet its obligations today. 

One more note about Director Schurke's performance at the State Labor Council legislative day earlier this month.  When she talks about how other states have made changes to their workers' comp programs since 1911, she mentions that "we" have been able to protect our program from these changes...as though that were a good thing.  But our state-run system costs $1.81 for every $1.00 it collects in premium.  We have the highest pension rate in the country, the highest time loss duration, and despite a drop in the number of claims filed, taxes are going up.  Even the Department's own consultants conclude it's the worst insurer in the country. The Hammer wonders what exactly is worth protecting about this obviously broken system?