By Kathryn Skelton,Staff Writer

AUGUSTA – With his daughter Michelle beside him, Paul Dionne was sworn in as executive director of the Workers’ Compensation Board on Wednesday, Gov. John Baldacci telling the former Lewiston mayor:

“I’m just very proud of what you’ve done.”

Dionne was hired by the board as executive director in 1996, but in changing its makeup to three members on each side with a new executive director as chair, Baldacci got to name a new leader. He picked Dionne and the Senate unanimously confirmed him.

“My hope is that Paul and the board become a national model for how things should be done in other states. I think there’s a lot of good things they’ve been able to do under his leadership,” Baldacci said.

After the workers’ compensation market here crashed and insurance carriers fled the state in the early 1990s, “Businesses were going to New Hampshire,” he said. “We had employers who couldn’t afford to do it anymore, couldn’t afford the rates.”

Legislative reforms – including the creation of Maine Employers’ Mutual Insurance Co. – moderated rates and brought private competition back.

“With health care, (insurance companies) were all leaving, too,” Baldacci added. “A lot of the inspiration I got to tackle health insurance came from the model of workers’ comp.”

Workers’ compensation insurance has been mandatory in Maine since 1974, with a few exemptions. Employers here will pay $460 million in premiums this year, a 2.2 percent increase over 2004, according to the Bureau of Insurance.

Instead of having close to the most expensive rates in the country, the state’s rates are now 13th, Dionne said.

Baldacci recast the board a year ago to skirt deadlock that had become commonplace. As recently as last spring the four labor and four management directors had refused to meet.

An attorney moved to have the board declared incompetent and assigned a legal guardian in 2003.

Baldacci gave the Labor Committee the names of six people to act as new directors on the board this winter, then withdrew the nominees in March. Dionne said new names would be resubmitted at the end of this session or the beginning of the next. One concern was tackling a May report on whether to extend benefits to injured workers by an additional year or two. Both the AFL-CIO and Maine Chamber of Commerce wanted their experienced directors to deal with it, he said.

Baldacci said the Maine Employers’ Mutual Insurance Co. was reducing injury and accidents and lower premium rates.

“That was the biggest complaint with the entire system before the changes were made: People were out too long, they couldn’t come back, if they did come back it was held against them,” he said. “If they are reducing injuries and accidents there ought to be a benefit for that, there ought to be some sort of recognition; that was what the whole program was established for.”

The ceremony in the governor’s office was small. Dionne repeated back a two-part oath.

“You passed, congratulations,” Baldacci quipped before signing a certificate to make the appointment official. Dionne now serves at the governor’s discretion.

He was mayor of Lewiston from 1980 to 1984. A Lewiston High School graduate, his daughters both teach in the local school system. Michelle Dionne is at Lewiston High School, Melodie Dionne-Klick at Longley Elementary School.

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