CHARLESTON — Sentiment against Gov. Joe Manchin’s proposed $25,000 cap paying for unspent sick leave smothered it Monday, but lawmakers agreed to set the new workers compensation mutual up for a three-year respite from federal taxes.

Ending a two-day special session, lawmakers rolled three of Manchin’s bills into one, but abandoned his bid to impose a ceiling on cashed-in sick leave.

“I think it did catch a lot of people by surprise, especially the cost of it,” Senate President Earl Ray Tomblin, D-Logan, said before the final vote on the compensation bill.

“In January, we were in kind of a rush situation, and a lot of people didn’t take the time to look at what the actual cost of it was. It’s going to be several million dollars.”

Manchin’s idea was to limit the payout to $25,000 on the front end of unused sick leave.

But the Senate Finance Committee voted 12-0 against the proposal, and Chairman Walt Helmick, D-Pocahontas, said a more in-depth study needs to be done before the issue likely is revisited in January.

“People have a right to know how this thing happened and what the true meaning of it was and the true intention,” Helmick said.

“Are we living with the true intention? Did anyone ever think there would be a true liability, which there is? I don’t think so.”

Helmick said his panel simply was uncomfortable with the administration bill and decided to table it. One member, Sen. Karen Facemyer, R-Jackson, told of one constituent who was anticipating a $48,000 lump sum payout. The House, likewise, struggled with the idea.

“There was some level of consternation,” House Majority Leader Rick Staton, D-Wyoming, said of the payout bill.

“People were as concerned over here as they were over there.”

Staton said there was some talk about raising the ante on the front end payout to $35,000 or $50,000.

“But I don’t think anything would have made it more palatable to people,” he said..

At one stage, Staton noted, there was some talk of calling Democrats in for a caucus, but then the Senate balked at the bill entirely in its finance meeting.

Delegates wrapped the three remaining bills into one, then amended it, and the Senate concurred.

As outlined by House Finance Chairman Harold Michael, D-Hardy, the amendment strikes any time limits on a prohibition against the private mutual, BrickStreet Mutual Insurance Co., from dissolving.

It bars BrickStreet from assuming coverage for anything other than workers compensation and lets the governor appoint directors until New Year’s Eve in 2008.

After that, employers are enabled to elect the company’s directors. The new mutual cannot refuse coverage to any applicant before Jan. 1, 2009. Manchin will appoint five of the seven directors until then.

A second provision, outlined earlier in a separate measure, keeps West Virginia’s black lung fund and its assets under state control for miners exposed before Jan. 1.

The new mutual will administer the fund three years before an agreement is reached with the state Insurance Commission.

BrickStreet will get “a reasonable fee” for administering other funds for three years.

Originally, the bill called for a seven-year administration of the uninsured employer fund, self-insured employer guaranty risk pool, the self-insured employer security risk pool, and private carrier guaranty fund, and the so-called “old fund.”

Legislative leaders were assured by Manchin the new mutual will get a three-year exemption from federal taxes.

“Obviously, we can’t guarantee it, but that’s the hope that it will be,” Michael told House Republican Leader Charles Trump IV, R-Morgan.

Employees in other agencies weren’t given payouts for accrued sick leave, Tomblin said, including the move to privatize state liquor stores. Instead, they were given priority in other state jobs, Tomblin noted.

“And the same thing when we cut back on the lottery commission,” he said.

“We cut several hundred employee’s off that when we changed the way we delivered the tickets. It’s something new. And it’s something both the administration and the Legislature need to look at, if and when we ever make these kind of changes again. It’s an expensive proposition. We made that choice back in January and we’re going to have to live with it.”

Tomblin feels the brief session was a success in altering the makeup of the board of directors of the mutual and saving the state several million dollars with the tax exemption.

“It’s worth it to do that for three years,” he said.

“With a fund as underfunded as it was, anytime you save $100 million or $200 million some place, you do what you can to do that.”

While the session went quickly as Manchin predicted, it didn’t occur in record time.

“We’ve done some of them in a matter of minutes,” Tomblin observed.

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