Special Workers’ Compensation Fund Runs Out of Money, Awaits Emergency Loan
More than 1,600 workers with more than one permanent disability have not received checks from a special workers' compensation fund for more than a month because a the fund temporarily has run out of money, the Sacramento Bee reports. The Subsequent Injuries Fund, which provides additional compensation to workers who are more than 70% permanently disabled as a result of various work-related injuries, ran out of money after legislators this summer eliminated funding for the program from the final budget. Funding was restored under legislation (AB 227 and SB 228) to reform the state workers' compensation system that former Gov. Gray Davis (D) signed in September, but the funding will not be available until Jan. 1, when the laws are scheduled to take effect. However, a measure providing an emergency $3 million loan to the program awaited Gov. Arnold Schwarzenegger's (R) signature as of Friday. The Subsequent Injuries Fund, which is administered by the Department of Industrial Relations, issues about $6.5 million to about 400 claimants annually (Chan, Sacramento Bee, 12/6).
A recent editorial and opinion piece addressed efforts to reform the California workers' compensation system. Summaries are provided below.
- California's workers' compensation system "is a job killer," and Schwarzenegger "should spend some of his considerable political capital to get the system under control," a San Diego Union-Tribune editorial states. Despite attempts to reform the "wasteful" system, a "gaggle of special interests, including insurance companies, personal injury attorneys, medical providers, vocational rehabilitationists and others with a financial stake in the current system have stymied meaningful reform," the editorial states. The editorial adds that the recently passed reforms (AB 227 and SB 228) are "little more than a tourniquet designed to help stem the massive hemorrhaging of billions of dollars into a dysfunctional system." The editorial concludes that if further reforms are not passed by the Legislature, "Schwarzenegger should go directly to the voters with a ballot initiative to get this job-killing system under control" (San Diego Union-Tribune, 12/8).
- Reforming the "massive" and "truly broken" workers' compensation system is the "most urgent need of California's business today," Julie Meier Wright, president and CEO of the San Diego Regional Economic Development Corporation, writes in a Sacramento Bee opinion piece. The costs of the system "are not just hitting business" but also "impact every school district, every college, every university and every level of government -- as well as [not-for-profits]," Meier Wright states. The workers' compensation reform bill (SBX4 3) sponsored by Sen. Chuck Poochigian (R-Fresno) "provides the roadmap for the desperately needed changes to the system ... that will enhance protections to truly injured workers and enact the dramatic cost reductions needed for employers," Meier Wright states (Meier Wright, Sacramento Bee, 12/7).