Image Problems Spur Lawmakers to Plan Bold Agenda

Times Staff Writers

Hoping to erase an image of scandal and ineffectiveness, legislators began a monthlong summer recess Thursday with their sights set on a session they believe could be the most productive in recent years.

Lawmakers left town emboldened by a bipartisan agreement worked out last month that they consider the answer to long-term problems of transportation and education financing.

When they return in late August, legislators hope momentum from the transportation and education agreements will help them solve a set of problems that so far have proven insoluble. The unfinished agenda includes an overhaul of the state's $8-billion workers compensation system, a plan to provide health insurance for nearly all working Californians and measures to shore up the financially troubled health care delivery system.

Legislative leaders are even talking about a blockbuster deal that would link workers compensation reform, health insurance and the implementation of Proposition 99--the tobacco tax increase approved by voters last year--into one massive benefits package.

The idea is to use some of the money from Proposition 99 to help underwrite a health insurance plan for the nearly 7 million Californians who lack coverage. Experts say the cost of providing emergency and other health care to the uninsured is the leading factor causing trauma centers to close and hospitals to reduce services.

In order to succeed, legislators and Gov. George Deukmejian would have to persuade some of the state's most powerful and deeply entrenched special interest groups to trade or even surrender some of their economic benefits. Involved in the complex negotiations will be doctors, hospitals, insurance companies, labor unions, coalitions of powerful corporations, trial lawyers and workers compensation attorneys.

In the past, one special interest or another has been able to muster enough support from friendly legislators to kill workers compensation and mandatory health insurance bills.

But key lawmakers believe that this year could be different, chiefly because of the achievements of June, when Deukmejian and party leaders from the Senate and Assembly met privately to work out long-term budget agreements designed to guide state transportation and education spending into the 1990s. The agreements, coupled to a historic overhaul of the state spending limit, must be ratified by voters next June because they would amend the California Constitution.

"We feel there is a very healthy environment right now in the Legislature--with the governor, with each other--so we think we ought to make every effort to solve some of the major problems in a long-term, comprehensive way," said Senate Republican Leader Ken Maddy of Fresno.

Prodding the lawmakers are their image problems. Legislators have been hit by an FBI sting operation exposing possible wrongdoing in the Legislature. So far, one senator and a top aide have been indicted. And legislators continue to smart from criticism that they have been ineffective in dealing with some of the state's most pressing problems, leaving it up to sponsors of initiative campaigns to provide the cures.

Assembly Speaker Willie Brown (D-San Francisco) said he believes that lawmakers already have had a "pretty productive" session even if they accomplish nothing the rest of the year. He said he is tired of being identified with political "gamesmanship" rather than solid public policy achievements.

Brown, chairman of the Assembly Ways and Means Committee during the 1970s and Speaker since 1980, said he is working hard to turn his image around and--along with it--that of other Assembly Democrats. During an interview this week, Brown said, "I haven't spent so many hours in committee since I was chair of Ways and Means."

Maddy, Brown and other legislative leaders already have met with Deukmejian to set the political agenda for August and September.

One issue at the top of the list is the need to implement Proposition 99. The governor and Legislature must decide how to spend the estimated $600 million a year resulting from the tax increase. Proposition 99 provided that most of the money was to be spent on hospital and doctor services for Californians who have been priced out of the health care delivery system. But it did not specify exactly how the money should be spent.

Another key issue is a complex plan put together by Deukmejian, major California corporations, local government agencies and labor unions to revamp the troubled workers' compensation system. The original plan was to balance a big increase in payments to injured workers against offsetting savings to employers. But the proposal drew strong opposition from attorneys who represent injured workers and was so heavily amended by an Assembly committee that its original sponsors now are insisting on changes.

Also on the negotiating table is a proposal to require firms with five or more full-time employes to provide health insurance. Most major employers now provide medical insurance, so the legislation would have the biggest impact on small businesses. The California Chamber of Commerce strongly opposes the measure, saying small employers cannot afford to foot the bill for added insurance.

As if that were not enough, the governor and legislators must deal with lingering budget issues. When Deukmejian signed the state's $49.3-billion budget for the 1989-90 fiscal year earlier this month, he cut $157 million from Democrat-backed programs and proposed using the money to restore funds slashed by lawmakers from his own programs.

One of the holdover budget issues is the future of the state Office of Family Planning, a $36-million-a-year agency that oversees the distribution of information and counseling on birth control, sexually transmitted diseases and related issues. Deukmejian reduced the agency's budget by $24 million. Democrats would like at least some of the office's budget restored. They also would like the restoration of at least a substantial share of the $116 million Deukmejian cut from local mental health programs.

Also on the agenda is a plan by Deukmejian to put prison inmates to work for private corporations that would contract with the state Department of Corrections.

The governor and legislative leaders also say they are committed to coming up with a solution to the problem of garbage disposal. With landfills full or filling up rapidly, local governments are looking to the Capitol for answers.

Still another issue for the Legislature to wrestle with when they return in August is the knotty problem of automobile insurance. Since voter approval of Proposition 103 last year, legislators have been battling over competing proposals aimed at reducing the cost of buying automobile insurance. Proposition 103 calls for insurance rates to be reduced substantially. At the urging of insurance companies that say it will be tough to comply with Proposition 103 and stay profitable, bills are pending that would install a no-fault system in California.

Legislators in both houses also are studying ways of improving their ethical standards and reducing the temptations that can lead to conflicts of interest and corrupt practices.

By far, the most intriguing of the political possibilities of August lies in the possible linking of Proposition 99, the tobacco tax measure, with workers compensation reform and health insurance for most Californians.

The glue that holds the issues together, albeit lightly, is Proposition 99, which by June, 1990, will have produced more than $800 million in new revenues. Since the initiative was intended to raise funds to provide health care for those unable now to afford it, lawmakers say they can make a case for linking the measure to workers' compensation and health insurance.

Brown, who is carrying the health insurance measure, said he will resist efforts to link his bill with the workers compensation issue. But other legislative leaders said such a linkage may make sense.

Sen. Barry Keene of Benicia, the Senate Democratic floor leader, said: "If we treat health care as a problem confronting California, a comprehensive solution would include insurance for the working uninsured, care for the indigent, and care for injured workers and perhaps catastrophic care. Whether we can devise a comprehensive approach remains open. But we'll never know until we try."

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