Calif. WC Reform Faces Uncertain Future
A possible ballot initiative or a new legislative offering are viewed as possible scenarios following California Gov. Gray Davis veto last month of measures to raise workers compensation benefits, according to one insurer group.
“At this point there is a great deal of uncertainty,” said Mark Webb, vice president for state affairs at the American Insurance Association in Sacramento. “There is an expectation that organized labor will be filing an initiative any time now. Their primary objective would be to create a greater sense of urgency on the part of the governor to sign a benefit increase bill in 2002.”
The vetoed measures author, State Sen. John Burton, D-San Francisco, is the most likely author of another bill, Mr. Webb said. It remains to be seen, he said, if Sen. Burton will simply reintroduce this years final product or whether there will be “something else in the bill.”
Telephone calls by the National Underwriter to Sen. Burton for comment were not returned.
Mr. Webb said the employer community is “talking with the governors office,” and there appears to be an interest on the part of Gov. Davis “to bring the parties together this year and try to arrive at some form of legislation” that could be introduced and signed into law early in the session–before the March primary election day.
Steve Smith, director of the Department of Industrial Relations in Sacramento, said chances are good that a proposal will be introduced for the next legislative session. “We could either put it out as a proposal that the administration would like to see enacted and then have the interested parties work with whatever legislative authors, or it is at least possible that the administration would actually go seek a legislator and introduce our own proposal,” he said.
According to the AIA, Sen. Burtons Senate Bill 71 failed to include cost-saving system reforms and would have levied a $4.7 billion cost increase on a workers comp system already struggling with skyrocketing premiums.
Nicole Mahrt, AIA director of public affairs, said the question remains, “with a recession looming and state budgets being cut, is the governor likely to approve a hike in workers comp benefits next year?”
“Its my understanding the governors office has not fully embraced a strategy other than to personally communicate with business and labor leaders expressing his desire to get something done early,” said Mr. Webb. How that will be done amidst the “rather deep division between the governor and the president-pro tem of the Senate has yet to be fully fleshed out,” he added.
Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, November 19, 2001. Copyright 2001 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.
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