Gov. Blunt Announces 50 Percent Reduction in Workers' Compensation Tax and Surcharge
Gov. Matt Blunt and the Missouri Department of Labor and Industrial Relations' Division of Workers' Compensation today announced the state is reducing the tax burden on Missouri job creators and employers.
In 2009, Missouri employers can expect a 50 percent reduction in the administrative tax placed on workers' compensation insurance premiums, and the workers' compensation surcharge placed on deductible plan policyholders. The rates will be reduced from 1 percent to 0.5 percent in 2009. The Second Injury Fund surcharge will remain at 3 percent for calendar year 2009.
"A reduction in the workers' compensation administrative tax and surcharge for the upcoming year is another sign that our reforms and pro-jobs, pro-growth initiatives are working for Missouri," Gov. Blunt said. "A rate reduction is a reduction in the tax burden for Missouri employers and job creators. This reduction makes workers compensation plans more affordable for employers, while offering our workers greater protections."
In addition to the tax reduction announced today, a September filing by the National Council on Compensation Insurance indicated that workers' compensation rates in Missouri are expected to decrease for the year. The report anticipates the state could see an approximate 7.7 percent reduction in workers' compensation insurance rates beginning in January 2009. The change will further help attract and retain more jobs and provide more opportunities for Missouri workers.
"The impending workers' compensation rate reductions are an added testament to Gov. Blunt's responsible stewardship, and a reflection of his efforts to make Missouri more competitive and a good place to do business," said Todd Smith, Director of the Missouri Department of Labor and Industrial Relations.
Under Missouri law, the state is statutorily required to assess a workers' compensation tax/surcharge by October 31 of each year for the following calendar year, and a Second Injury Fund surcharge. Revenue derived from the workers' compensation tax/surcharge is used to fund expenses associated with administering the workers' compensation program. The revenue generated by the Second Injury Fund surcharge is used to pay benefits to injured workers who had previous disabilities.
Gov. Blunt has made rejuvenating the state's once-stagnate economy a top priority. Earlier this year the governor signed legislation containing several major provisions to build on strong economic growth and development in Missouri. The legislation increases the annual cap on the governor's successful Quality Jobs Tax Credit Program from $40 million to $60 million. The program has helped create approximately 22,884 new jobs and retain 2,442 others that pay above the average county wage where they are located and that provide health care benefits for employees. Among other things, the legislation also increases the amount of tax credits the Missouri Department of Economic Development may authorize for the Enhanced Enterprise Zone Program from $14 million to $24 million.
Economic development legislation passed this year builds on the unparalleled reforms enacted under Gov. Blunt's leadership. Comprehensive litigation reform enacted under Gov. Blunt's leadership drove the state to a ten spot jump in a leading national watch group's ranking. The state's jump in rank is indicative of the many success stories resulting from Gov. Blunt's pro-family, pro-jobs initiatives.
In addition, Gov. Blunt's workers' compensation reform measures enacted in 2005 are helping to decrease workers' compensation rates in the state. The law restored fairness to Missouri's workers' compensation system by protecting rights of injured workers without threatening Missouri jobs. Missouri had lost 34,000 jobs in the four years before the Blunt Administration. The improvements Gov. Blunt made to Missouri's entrepreneurial climate led to the creation of 77,400 jobs, placing Missouri in the top half of states for total job growth.
Gov. Blunt has kept his pledge of no new taxes on Missourians and enacted three major reductions in the tax burden. Gov. Blunt signed legislation to phase out state taxation of Social Security benefits earned by Missouri seniors. He also cut taxes to protect manufacturing jobs and provided tax relief to Missouri families for their health care coverage.