Judge Orders State to Refund Money Swept Out of Work Comp Fund

Thursday, October 19, 2017 | 0

A Kansas county judge has ordered the state to repay a little more than $3 million that it swept out of its Workers’ Compensation Fee Fund and other funds financed by user fees to balance the state budget during the height of the recession in 2009, the Lawrence Journal-World reported Wednesday.

Mike O'Neal

Shawnee County Judge Franklin Theis issued the order late last month in response to a lawsuit brought by several group self-insurance pools. Former Speaker of the House Mike O’Neal, a Hutchinson attorney, represented the plaintiffs in the suit, according to the newspaper.

"Although it has taken the parties (seven and a half) years to obtain justice, the final approval of this significant settlement, plus acknowledgment of wrongdoing with respect to the 2009 sweeps, is very gratifying," O’Neal said in a press release.

The Kansas Supreme Court ruled in 2015 that the state has limited authority to use money from user fees for any purpose other than what the fees were established to pay for, the Journal-World report said. 

The state budget adopted by the Kansas Legislature in 2009 pulled $2.355 million out of the workers’ compensation fund to make up for revenue shortfalls caused by the recession. O’Neal, House speaker at the time, voted against the measure.

The state also took $534,5127 from the Bank Commissioner Fee Fund and $195,671 from the Real Estate Fee Fund.

After leaving office, O'Neal represented the self-insurance pools in a legal challenge to the money transfer. The Kansas Association of Realtors joined the lawsuit because of concern by members that money they pay for license fees could be used for other purposes. 

The judge’s order requires the state to pay O’Neal $105,000 in attorney fees.