Nunez Says Democrats’ Cooperation on State Budget Will Depend on Changes To State Workers’ Compensation Insurance Rules

Democrats will block the next state budget unless Gov. Arnold Schwarzenegger (R) reverses some state rules to implement the workers' compensation reform law (SB 899) passed last year, including provisions related to medical care, Assembly Speaker Fabian Nunez (D-Los Angeles) said Tuesday, the Riverside Press-Enterprise reports.

Nunez, who spoke at a rally led by the group Voters Injured at Work, said, "When we begin to negotiate the budget this year, we are going to say, 'Governor, before we go any further, we need to put an end to what that law is doing to injured workers" (Herrera/Miller, Riverside Press-Enterprise, 4/19).

Critics of the law say that it makes it difficult for workers who are severely injured to receive increased benefits and that workers who have less-serious injuries could be denied benefits because of stricter guidelines, the Sacramento Bee reports.

"Democrats would have never signed onto a deal that puts injured workers in harm's way," Nunez said (Chan, Sacramento Bee, 4/20).

Attorney General Bill Lockyer (D) also called for the reversal of some of the rules, saying, "We know rights have been taken away, benefits have been taken away. But we won't lose this fight" (Riverside Press-Enterprise, 4/19).

Schwarzenegger spokesperson Vince Sollitto said, "We can't go back to the broken system. The governor won't allow it" (Sacramento Bee, 4/20). He added, "If [Nunez] truly wants to bring back what the governor has called the 'poison of our economy,' and to drive business from California, I can assure you that the governor's not interested in that" (Riverside Press-Enterprise, 4/19).

Also at Tuesday's rally, some Democratic legislators, union leaders and workers called for the removal of Andrea Hoch, director of the Division of Workers' Compensation, the Bee reports. The Senate Rules Committee on April 27 will hold a confirmation hearing for Hoch, who was responsible for creating the new rules.

Sen. Joe Dunn (D-Garden Grove) said he supports the removal of Hoch, adding, "We can't have an administrative director who has proposed regulations that are not based on the law."

Sollitto said, "Ms. Hoch is implementing the law exactly as it was intended by both sides" (Sacramento Bee, 4/20).

On Monday, Hoch in a "pre-emptive" move released a progress report on SB 899 and said employers by 2005 likely will see workers' compensation insurance rates decrease by more than 26% from their high in 2003 if insurers pass on rate cuts, the Bee reports.

According to Hoch, "Drafting these regulations is a vital part of implementing the reforms" (Chan, Sacramento Bee, 4/19).

Summaries of an editorial and opinion piece addressing efforts to reform the state workers' compensation insurance system are provided below.

• Riverside Press-Enterprise: Two bills (SB 46 and SB 538) that would "set back" the "progress" made by SB 899 would "driv[e] more coverage to the inefficient, government-run State Compensation Insurance Fund" and "erod[e] the savings" managed-care networks could provide, a Press-Enterprise editorial states. The editorial concludes, "The Legislature should instead build on these reforms and lend stability to California's fragile recovery" (Riverside Press-Enterprise, 4/18).
  
  
• Dan Walters, Sacramento Bee: Schwarzenegger "may have reason to regret his much-touted" workers' compensation reform effort because "[i]t deluded him into thinking that he had discovered the magic formula for moving a Democrat-dominated Legislature," Walters writes in a Bee column. Walters writes that the reforms "added fuel to his multifront battle with the unions and the Democrats over other ballot measures this year" (Walters, Sacramento Bee, 4/20).