nysif-1166065Noting that New Yorkers had been treated last week to “almost daily political perp walks” involving “a parade of office-holders,” an editorial in Saturday’s Wall Street Journal pointed out: “The bigger scandal in the Empire State continues to be what the politicians do that’s legal.”

Case in point: the new state budget’s diversion of $1.75 billion in technically excess reserves from the State Insurance Fund (SIF), the off-budget, non-profit, government-owned carrier that now covers nearly 40 percent of the New York market for workers’ compensation insurance. The Journal noted (alas, behind its online paywall):

Note: These reserves [being shifted to the state budget] are merely an accounting charade concocted by Albany. The state has hitherto required policyholders to pre-fund liabilities for “second injuries,” which workers re-aggravate on the job. By eliminating this requirement, lawmakers have created a $1.75 billion reserve that they can now tap to finance their sundry desires. Mr. Cuomo calls this reform.

Lawmakers claim no-harm-no-foul since many employers prefer to pay second injury claims as they are filed rather than pre-fund the liabilities. But then why not return the “reserves” to policyholders or use them to reduce future premiums? Or let the insurer keep the cash for a rainy day, which may be more imminent than they expect.

The Journal’s criticism echoes what I had written here, and here.

By the way, New York’s workers’ compensation premiums — a key cost of doing business — were ranked fifth highest in the country last year, 150 percent of the median for all states in a study conducted by the Oregon Department of Consumer and Business Services. Financially weakening SIF certainly won’t promote comparatively lower rates in the future.

About the Author

E.J. McMahon

Edmund J. McMahon is Empire Center's founder and a senior fellow.

Read more by E.J. McMahon

You may also like

New Jersey’s Pandemic Report Shines Harsh Light on a New York Scandal

A recently published independent review of New Jersey's pandemic response holds lessons for New York on at least two levels. First, it marked the only serious attempt by any state t Read More

Albany Lawmakers Push a $4 Billion Tax on Health Insurance

Legislative leaders are proposing an additional $4 billion tax on health insurance plans in the upcoming state budget – but withholding specifics of how it would work. Read More

Hochul’s ‘Straight Talk’ on Medicaid Isn’t Straight Enough

Arguably the biggest Medicaid news in Governor Hochul's budget presentation was about the current fiscal year, not the next one: The state-run health plan is running substantially over budget. Read More

DeRosa Is Still Hiding the Truth About Cuomo’s Pandemic Response

As the long-time top aide to former Governor Andrew Cuomo, Melissa DeRosa ought to have useful information to share about the state's pandemic response – especially about what went wrong and how the state could be better Read More

New York’s Medicaid Spending Is Running Billions Over Budget

New York's Medicaid program ran billions of dollars over budget during the first half of the fiscal year, adding to signs of a brewing fiscal crisis in Albany. According to the fro Read More

One Brooklyn Health’s Money Troubles Raise a Billion-Dollar Question

A brewing fiscal crisis at One Brooklyn Health, which has received more than $1 billion in turnaround funding from the state, raises the question of whether that money has been well spent. Read More

As migrants flow to NY, so does red ink 

The influx of foreign migrants to New York could cost the state $4.5 billion more than expected next year, Governor Hochul today warned.  Read More

Beware of Medicaid’s Spending Swings

The state's Medicaid spending is becoming increasingly volatile from month to mo Read More