Legislature Does Not Pass Workers’ Compensation Reform by March 1 Deadline
As expected, the Legislature did not pass legislation to reduce employers' workers' compensation costs by Gov. Arnold Schwarzenegger's (R) Monday deadline for approving such legislation, the San Diego Union-Tribune reports (Ainsworth, San Diego Union-Tribune, 3/2). During his State of the State address last month, Schwarzenegger said he would seek to place a measure on the November statewide ballot if legislators did not pass reform legislation by March 1. As part of his "California Recovery Plan," Schwarzenegger in November proposed reducing by $11.3 billion the cost of the state's $29 billion workers' compensation program, under which employers pay $5.85 per $100 of payroll -- the highest rate in the nation -- for coverage. Schwarzenegger's plan includes measures that would prohibit workers from receiving multiple disability payments for the same injury; require dispute resolution more frequently to reduce litigation costs; limit penalties paid by insurers and employers in medical bill disputes; and establish uniform standards for permanent disability. Democrats in the Legislature, who generally do not support all of Schwarzenegger's reforms, have said that no workers' compensation reforms will be ready until the end of March (California Healthline, 3/1).
Despite the missed deadline, Schwarzenegger on Monday said that parties interested in workers' compensation reform "are working so well together," adding, "Democrats and Republicans, the providers, the unions and everyone. Things look really good." Schwarzenegger aides have met with Assembly and Senate leaders almost daily for two weeks to work on workers' compensation reform, the San Jose Mercury News reports (Folmar, San Jose Mercury News, 3/2). Margita Thompson, press secretary for Schwarzenegger, said that the deadline "served a positive purpose," adding, "It was a focusing event and people are talking. ... The governor is very hopeful those discussions will lead to a legislative solution so we can get workers' comp reform as soon as possible" (Lawrence, AP/Monterey County Herald, 3/2). Assembly Insurance Committee Chair Juan Vargas (D-San Diego) said that March 1 "was an artificial deadline [Schwarzenegger] put in [his speech] to get us working on the issue, and I think it worked," adding, "I don't believe he or anyone else expected to get this done by March 1" (San Diego Union-Tribune, 3/2). Sen. Charles Poochigian (R-Fresno) said, "All sides are interested in having a very meaningful and productive dialogue about what to do, and the differences are being narrowed. ... I have a belief based on what's going on that there is a good chance that we can bring about major reforms" (Herrera, Riverside Press-Enterprise, 3/2). Insurance Commissioner John Garamendi (D) said, "I've been around this business for 30 years and after a while you get a sense of what's possible and what's not, and [passing a workers' compensation bill] is very possible." He added, "It's in nobody's interest to go to the ballot" (Sheppard, Inland Valley Daily Bulletin, 3/1). Democratic leaders said that the real deadline for passing workers' compensation reform is April 16, the date when signatures for the November ballot are due, the Union-Tribune reports (San Diego Union-Tribune, 3/2). Schwarzenegger said that he would "absolutely" accept a workers' compensation reform plan from the Legislature at any time, even after signatures have been collected. He added that "if we win [the passage of Propositions 57 and 58], that will be a strong signal that we can in fact" pass workers' compensation reforms (San Jose Mercury News, 3/2).
Likening the debate over workers' compensation reform to the debate over Proposition 13, a ballot measure passed in 1978 that limited property tax increases, columnist Dan Walters in a Sacramento Bee opinion piece writes that the "major difference between the dynamics of 1978 and those of 2004 is that this time, the governor has chosen sides, threatening to lead the ballot measure campaign if lawmakers don't act." Walters writes that although the Legislature has missed Schwarzenegger's deadline, "there could be a deal that would stop a full-fledged battle" over a workers' compensation reform ballot measure. If voters on Tuesday approve Propositions 57 and 58, which deal with the budget, Schwarzenegger's workers' compensation ballot measure "threat will have gained credibility and his negotiating position will have been strengthened" (Walters, Sacramento Bee, 3/2).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.