Calif. Governor Vetoes $4.7 Billion Workers’ Comp Benefit Increase

Despite his efforts to negotiate a balanced proposal, California Governor Gray Davis has vetoed legislation to raise workers’ compensation benefits for the third year in a row. The bill, SB 71, sponsored by John Burton (D-San Francisco), failed to include cost-saving systemic reforms and would have levied a $4.7 billion increase on a workers’ comp system that is already struggling with skyrocketing costs, according to the American Insurance Association (AIA).

“Given a legislative process that systematically excludes debate and discussion about the problems in California’s system — how can you expect any outcome other than another veto?” said Mark Webb, AIA vice president, western region. “Governor Davis pledged his support for a bill that balanced benefit increases with systemic reforms in his veto message of SB 996 in 2000. Unfortunately, the trial lawyers who sponsored SB 71 are more concerned about making money from the system instead of reforming it.”

“Everyone agrees that California’s injured workers need a raise in benefits,” Webb said. “We presented labor and the trial bar with a balanced proposal early in the year, but they were not willing to negotiate.”

“California’s workers’ compensation system will continue to face serious problems unless policies are enacted to control rising medical costs and creating objectivity in the disability rating process,” Webb said. “Governor Davis outlined four goals in his veto message and we are prepared to start negotiating immediately so that these goals can finally be realized and injured workers can received a long overdue benefit increase in 2002.”

“Until all interested parties, including labor, trial lawyers, employers and insurers come together and negotiate a balance package of reforms, injured workers will be the ones who suffer under seriously inadequate benefit levels,” Webb concluded.

Topics California Workers' Compensation