|Michael F. Easley, Governor
Buck Lattimore, Chairman
Thomas J. Bolch, Commissioner
Laura K. Mavretic, Commissioner
Renée C. Riggsbee, Commissioner
Christopher Scott, Commissioner
Dianne C. Sellers, Commissioner
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
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
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:
Thank you for your comments and
your support in this difficult budget time.
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