The Problem with Raiding the Montana State Fund

The reserves are intended to pay current and future claims of injured Montana workers

By Fred Thomas

During the recent legislative special session, Montana Gov. Steve Bullock proposed that one solution to our state’s revenue shortfall could be to dip into the reserves of the Montana State Fund (MSF). Here’s the major problem with that plan – MSF reserves are accumulated through payments made by MSF clients and are intended to pay current and future claims of injured Montana workers. The fund ensures that employers can guarantee a workers’ compensation operation for their employees.

Regulated by the Montana Commissioner of Insurance, state law protects workers’ compensation reserves to ensure that they are available when MSF customers need the funds. In addition, in order to help develop and build a first class workers’ compensation company to serve Montana, MSF has an independent board of directors appointed by the Governor and confirmed by the Senate. The Fund has done a good job, protected employers, provided coverage for injured employees and accrued the reserves that a well-run and funded insurance company should have.

When it comes to Bullock’s attempts to balance the budget with $30,000,000 of reserves for injured workers, many are standing up to say no way! For those who remember the last time that workers’ compensation was raided in the 1980s, it didn’t end well for Montana. Another Democratic governor poorly managed the workers’ compensation program and it ended up creating a huge deficit.

Following the special session in November, the MSF board voted to challenge the legality of Bullock’s plan to raid the fund as an unlawful breach of contract. However, Bullock quickly removed two of the most qualified board members and replaced them with votes more likely to go his way. Shortly thereafter the board reconsidered and voted to close down the legal challenge.

So, it was liberal politics that got the state into deep debt with workers’ compensation and the same thinking that now threatens the fund reserves again. Let’s remember that it is workers who have the most to lose in this maneuver.

There is still potential that this can be challenged in the state courts, and it should be. The contractual law between MSF and their customers should be upheld. Then, action needs to be taken during the 2019 Legislature to further protect the MSF from politicians wrongfully robbing their reserves.

Fred Thomas, R-Stevensville, is the majority leader of the Montana Senate.

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