Wednesday, Dec. 4, 1996 | 11:59 a.m.
Insurance Division actuaries had suggested the Legislative Committee on Workers' Compensation draft a bill to impose a 4 percent annual surtax to help pay off the industrial insurance system's $1.35 billion long-term debt.
But the committee decided Tuesday to only recommend a general formula for a surtax on the total amount of workers' compensation claims paid by each company. There's no mention of a specific tax rate.
The committee had been directed by a law passed in 1995 to draft the formula to help SIIS if necessary - and Assembly members Lynn Hettrick, R-Gardnerville, and Sandi Krenzer, D-Las Vegas, said the proposal meets that mandate.
But Sen. Joe Neal, D-North Las Vegas, said a specific tax rate should have been inserted in the formula.
"The law says this committee shall adopt a formula," he said. "Why are we running from it? If we have reservations, we shouldn't be on the committee in the first place."
Krenzer said it's premature to propose a rate. She said the Legislature should wait until it has a better idea of SIIS liabilities.
Before the Legislature imposed a drastic overhaul of SIIS in 1993, the system faced a $2.2 billion deficit. That has been cut to $1.35 billion mainly through laws that reduced benefits to workers and put medical care in hands of managed care organizations.
After the meeting, SIIS chief Doug Dirks said a standby tax may not be needed if his agency continues to slash its long-term liabilities.
Insurance Division actuary Chuck Knaus suggested the 4 percent levy, saying the system could become insolvent by 2016 without the tax.
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