Michael F. Easley, Governor
Buck Lattimore, Chairman

Bernadine S. Ballance, Commissioner
Thomas J. Bolch, Commissioner
Laura K. Mavretic, Commissioner
Renée C. Riggsbee, Commissioner
Christopher Scott, Commissioner
Dianne C. Sellers, Commissioner

North Carolina
Industrial Commission




TO:         The Workers’ Compensation Community

FROM:   Chairman Buck Lattimore

DATE:    April 12, 2002

RE:         Budget Cut Proposals—Request for Comments

North Carolina currently faces a major financial crisis. As a result each state agency has been asked to develop a plan to reduce its annual appropriation.

The Industrial Commission operates on an $8.4 million dollar budget of which $6.5 million is appropriated by the General Assembly and the remaining $1.9 million is generated through fees (hearing fees, compromise settlement agreement fees, etc.).

The Commission has been asked by the Governor’s Office to propose cuts ranging from 7% to 11% of our current budget (cuts of $460,923 to $724,306). These figures will be utilized in the Governor’s budget recommendations.

The General Assembly has now asked that the Commission provide a proposal for a 13% cut in our current budget ($855,998).

We have been asked to review all positions, programs and line items for available cuts.

Because of far-sighted action by the Commissioners a year ago to modestly increase certain fees, we project that collections from fees for the over 9500 compromise settlement agreements approved annually and hearing costs for over 2500 hearings and 550 appeals will generate funds necessary to cover some of these cuts.

However, we must explore additional steps. The Commissioners are currently considering a change in our procedure for collecting the fee for approving compromise settlement agreements. For years, the Commission has approved these agreements and later billed the responsible party. As you may imagine, this requires time and costs to generate the billing, plus mailing charges and collection activity in many cases. Our monthly receivables total more than $400,000. Annual bad debt also results.

In an effort to save processing and mailing time and costs and to eliminate bad debt, the Commission is considering charging “up-front” for the approval of compromise settlement agreements. In other words, no more billing. The proposal is a “pay as you go” or “cash and carry” system. A check must accompany the submitted agreement. As you know almost every other judicial or quasi-judicial agency requires up front payment (clerk of court, register of deeds, general court of justice, etc.).

The Commission needs your input on this proposal. Please provide your comments in writing to my attention at the following mailing or e-mail address:

Buck Lattimore
N.C. Industrial Commission
4340 Mail Service Center
Raleigh, NC 27699-4340

Thank you for your comments and your support in this difficult budget time.

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N.C. Industrial Commission · 4319 Mail Service Center · Raleigh, NC 27699-4319
Phone:  (919) 807-2500 · Fax:  (919) 715-0282
Internet Address:  http://www.comp.state.nc.us/