Friday, March 29, 2013

Less Cost. Better Service: Governor Kasich Signs the IC Budget

COLUMBUS, OH — Laid end-to-end, the 55 million dollars in the Ohio Industrial Commission’s Fiscal Year 2014 Budget would stretch from the William Green Building’s front door to the Space Needle in Seattle, Washington and back—with a few dollar bills leftover.

“It takes millions of dollars to run our agency, but I am committed to every dollar being spent wisely and responsibly,” Chairperson Jodie Taylor said. “Our employees recognize that as a non-general revenue funded agency, we have a responsibility to Ohio employers to maintain the lowest possible cost structure while achieving our goals of quality, timeliness and impartiality.”

In January, the IC submitted its Fiscal Year (FY) 2014-2015 budget to the Ohio General Assembly. The bill passed unanimously in the Ohio House of Representatives and the Ohio Senate before Governor John Kasich signed the bill on March 26. Chairperson Taylor, Executive Director Tim Adams, Director of Hearing Services Tom Connor and Legislative Liaison Jacob Bell attended a signing ceremony at the Ohio Statehouse.

Over the next two fiscal years, the IC budget will be $55.6 million in FY 2014 and will fall to $54.4 million in FY 2015.

The budget for FY 2014-2015 is less than the previous budget for FY 2012-2013. In fact, the FY 2014 budget is 4.9 percent less than the FY 2012, and the proposed FY 2015 budget is six percent less than the FY 2013 budget.

“As a result of our fiscal responsibility, administrative cost rates for three of four Ohio employer groups were cut for 2013,” Chairperson Taylor said. “The fourth group, while not realizing a reduction, remained stable with no rate increase.”

Taylor said the IC intends to maintain the lowest possible rate structure through the end of the next biennial budget period.

“The IC is an agency that has embraced process innovation and a commitment to quality,” Taylor said. “Our budget is in excellent shape because of the smart decisions made by our employees every day.”

Technological innovations and common sense solutions to problems have allowed the agency to reduce staff through attrition from 643 positions in 1997 to 400 positions at the end of 2012, without sacrificing the quality of service.

As a result, the IC’s budget was reduced from a ten-year high of $62.6 million in FY 2011 to $58.4 million in FY 2013.

While agency attrition since FY 2008 has yielded an estimated payroll expense savings in excess of $12 million, there are other areas of note that have contributed to the IC’s low cost structure. These include:

  • Lease payment expense – an aggregate savings of $2.4 million since FY 2009 using office consolidations and rent renegotiations in IC district offices.
  • VoIP operations have saved an aggregate of $219,000 since FY 2009 while expanding our broadband capabilities to the district offices.
  • Leveraged toner purchases using a vendor point program to secure $106,000 in needed equipment replacements without a cash outlay.
  • Reduced annual expenditures for office supplies from $219,000 in FY 2008 to $109,000 in FY 2012 through office consolidations, claims processing workflow, and utilizing centralized mailing.
  • Server virtualization has allowed Single Point Management and improved Disaster Recovery capabilities while negating the need to expend $200,000 to replicate these advantages with more hardware.
  • Images stored within our paperless hearing process have been converted to a content engine platform that allows faster access while eliminating $76,000 in annual licensing costs associated with the previous platform.
  • Slashed overtime payments by 75 percent from $96,792 in FY 2006 to $23,828 in FY 2012.

“The recent financial savings has not sacrificed the quality of the IC’s workers’ compensation decisions,” Taylor said. “Our agency still offers an excellent service at a lower cost.”

The IC adjudicated nearly 150,000 claims in 2011, of which only 122 were advanced through a writ of mandamus to the Tenth District Court of Appeals. This was a 25 percent decrease from 2010. The IC’s decisions were affirmed 73 percent of the time.

In 2012, there were 89 new mandamus cases filed, which was a 37 percent decrease from the 122 new cases filed in 2011. The 89 new cases is the lowest number of new mandamus cases filed in many years.

Of these court decisions rendered in 2012, the Court of Appeals denied the writ – or, in other words, affirmed the Commission – in 78 percent of the cases. To put this achievement in perspective, 248 of these cases were filed in 2005 and 295 such cases were filed in 2001.

“Along with our financial success, appeals to court are now at an all-time low,” Taylor said. “I am certain that we will maintain our momentum by continuing to upgrade our technological systems and focusing on the assurance of quality decisions while building on our history of fiscal prudence through realized savings.”