Wilson Says He Will Veto Workers’ Comp Package : Government: As expected, he will order legislators to reconvene in October. Democrats plan a counter session.

Gov. Pete Wilson said Friday he will veto Democratic legislation to overhaul the troubled workers’ compensation system and order the Legislature to come back into session a month before the election to fashion a plan to his liking.

Democratic leaders countered by announcing late in the day that they will convene an extended session of their own Oct. 13 and will consider issues beyond workers’ compensation, including possible overrides of Wilson vetoes.

Assembly Speaker Willie Brown (D-San Francisco) and Senate President Pro Tem David A. Roberti (D-Van Nuys) labeled Wilson’s move politically motivated and part of the Republican effort to seize control of the Legislature.

The day of political one-upmanship by the governor and legislative leaders resulted in widespread agreement on only one point: Virtually no one thought the special session will result in reform of the workers’ compensation system this year.

The maneuvering began early in the day when Wilson, addressing the California Chamber of Commerce’s annual Host Breakfast, announced that he would veto the Democratic bills, which cleared both houses on the final day of the regular legislative session last month.

Saying the Democratic plan would add to the burden on business owners and worsen California’s job climate, Wilson set the special session for the week of Oct. 5.

Under the Constitution, the Legislature is required to return, but the lawmakers are under no obligation to act. Brown said that he intended to establish committees to study workers’ compensation.

Wilson urged nearly 1,000 business leaders to work to unseat Assembly Democrats if they fail to enact what he views as an acceptable reform of the $12-billion workers’ compensation system.

“To succeed in overcoming the eloquence of campaign contributions that have killed reform so often in the past,” Wilson told the business owners and executives, “you who create jobs in California must demand that they (the legislators) come back to Sacramento and finally reform the system.”

” . . . If they won’t change the law in October, then in November we must change the lawmakers,” Wilson said to applause.

Wilson said the increasingly costly and “fraud-ridden” workers’ compensation system is “Exhibit A” in his case against the Democratic-controlled Legislature. He said that California’s employers pay among the highest workers’ compensation premiums in the country, while benefits for injured workers are among the lowest, a statement disputed by some interests who are trying to preserve the current system.

Wilson said the Democratic bills he will veto would make only cosmetic changes in the system, and not reduce costs. At the same time, he said, weekly disability benefits for injured workers would be raised, adding another $500 million to the annual cost to businesses.

The Democrats say their bills would save employers more than $1 billion and contain several provisions aimed at fighting fraud in the system.

Some political analysts said Wilson could be tapping into a potent issue with workers’ compensation. Pollster Mervin Field, for one, called the governor’s move “adroit.”

“The public is scared,” Field said, citing the high 9.8% unemployment rate in the state. “Anything that resonates on the fear the public has can have a lot of capital.”

Field pointed out that Wilson also is using that most favorite of villains, the lawyers who represent injured workers and profit from litigation in the workers’ compensation system. The issues of job loss in the recession, fraudulent claims and profiteering by lawyers make a “potent combination,” Field said.

“If the Legislature goes back, and they do nothing or very little, Wilson and the Republicans will say, ‘Here’s another example of the intransigence of the Democrats. They’re not responsive to the bad economic trends,’ ” Field said.

But Former Gov. George Deukmejian, who attended the speech, said that it is difficult for voters to make the connection between the arcane issue and jobs. “You have to keep trying. It’s a matter of education, a matter of informing. It’s not easy.”

Assemblyman Burt Margolin (D-Los Angeles), who took the lead in crafting the bills that Wilson will veto, said the governor’s move could backfire.

“The political onus will be on the people who voted against this package, and on the governor who vetoes it,” Margolin said. “ . . . The only way you make it an issue is to flatly distort what the Legislature has done.”

Margolin maintained that the bills that passed the Assembly and Senate on Aug. 31 contained several provisions that were nearly identical to Republican proposals.

All 80 Assembly seats are up for grabs on Nov. 3, as are 20 of the 40 Senate seats. In a recession-driven, anti-incumbent atmosphere, Republican strategists hope to gain at least five seats in the Assembly. They currently hold 33.

Margolin said he was “pessimistic” that anything would result from the session, given “the governor’s shrill political rhetoric.”

The Legislature’s regular session ended Aug. 31, the day on which it passed the workers’ compensation bills on party-line votes. It recessed for the year after it passed the budget, returning for a day to pass a school finance bill.

Though ambivalent about some aspects of the workers’ compensation bills, Brown has touted the measures approved by the Legislature as major reforms, and said in a statement that the package on the governor’s desk “would save enough money to create thousands of jobs so badly needed in our weakened economy.”

Democrats and Republicans alike say that the system must be fixed. But they split over several points, among them how to cut the cost of litigation, how to limit disability claims for stress-related injuries, and how to lower the cost of retraining injured workers.

The price tag for vocational rehabilitation alone is $650 million to $1 billion a year. The Democratic bills seek to cap its costs by, for example, limiting the duration of rehabilitation plans to 18 months and slicing counseling fees by 10%.

Republicans say the Democratic plan would not save anywhere near the $455 million that Democrats claim. A GOP plan supported by Wilson proposed to cut all workers’ compensation payments for vocational rehabilitation, but offers no alternative for retraining injured workers.