The Ohio Bureau of Workers’ Compensation announced Thursday that it is recommending a 12% rate reduction for school districts and local governments, to take effect Jan. 1.

The BWC said the reduction would be the second-largest decrease for the state’s public employers since at least 1985. The reduction would save $21 million annually.

The BWC has decreased local government rates seven times since 2011 for a cumulative 41.8% reduction with a statewide financial impact of $435 million, the agency said. The bureau is also in the midst of delivering approximately $157 million in rebate checks to employers during the month of July and has returned $8 billion to all Ohio employers since 2011.

The BWC said declining claims and relatively low medical inflation costs were among several factors that are combining for a favorable forecast of future average claim costs.

The decrease represents the change to the statewide average of the collectible rates for public employer taxing districts. The actual premium change for an individual public entity will differ based on several factors, including its employer type or classification, recent claims history and program participation, the bureau said.

The board will vote on the proposal during its next meeting, scheduled for Aug. 24.