Climate May Be Right for Cooperation

Maybe it was the 70-degree spring weather, all the flowers blooming in Capitol Park and the stately trees in full foliage. In such serenity, Gov. Pete Wilson and legislative leaders met last week for the first time this year, lunching on turkey sandwiches, pasta and chocolate chip cookies. And they didn’t have a food fight.

There were other encouraging signs, as well. The four leaders--Democrats and Republicans--agreed to send the governor, by the end of this month, compromise legislation reforming the infamous workers’ compensation system.

For good measure, Wilson also agreed to sign Speaker Willie Brown’s two bills creating a mortgage insurance fund for first-time home buyers, part of the Assembly Democrats’ economic stimulus package. These bills likewise will be sent to the governor by May 31, the leaders concurred.

The Big Five--Wilson, Brown, Senate President Pro Tem David A. Roberti, and GOP leaders Ken Maddy of the Senate and Jim Brulte of the Assembly--also talked amiably of regulatory reform, business tax incentives, infrastructure improvement and the credit crunch.

And the check is in the mail?

It really is this time, they insist.

Discredited by past feuding and gridlock, the Capitol collectively seems to be kicking itself in the rear, motivated by a desire for public redemption.

“I’m known as a big pessimist around here, but I see hope,” says Maddy, one of the Legislature’s most seasoned members. “The meeting was entirely congenial,” he reports, echoing other participants.

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The direction of this year’s legislative session--up or down or drifting--likely will be determined in the next four weeks.

First, we’ll see whether the leaders and the governor can keep their promise to themselves and get a workers’ compensation package passed by the end of May. The Speaker’s housing bills would be a nice bonus, but no substitute.

Second, as difficult as workers’ comp will be to settle, the state budget will be even tougher. Legally, the Legislature must pass a budget by June 15. It rarely does, but the lawmakers have been swearing that this year will be different. The state Constitution also says the governor must sign the budget by July 1. But we all remember last year when Wilson and the Legislature stumbled and sniped for another 64 days before enacting a budget.

Workers’ comp and the state budget have one thing in common: Each is symbolic of Sacramento gridlock. The hope is that if a timely compromise can be reached on workers’ comp, this will put the Capitol in an upbeat mood to agree punctually on the budget and dozens of economic stimulus bills. “If comp moves, we might have some ‘Big Mo,’ ” says Maddy.

And it would signal corporate CEOs who are thinking about abandoning the state or investing here that Sacramento is serious about improving California’s business climate, the governor and legislators believe.

“The recession won’t end when we do workers’ comp reform, but at least we’ll have done our part,” says Sen. Patrick Johnston (D-Stockton), the lead senator on the issue.

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There are other reasons for bearing down on workers’ comp.

The special interests that stand to lose under reform--the insurers, applicant attorneys, forensic doctors, rehabilitation counselors, peace officer unions--are bound to get stronger as the legislative session turns hectic and attentions are divided. At stake for the opponents is a collective income loss of between $1 billion and $3 billion, depending on the extent of reform.

One sticky question for a two-house conference committee and the governor will be exactly how to split the savings between employers, whose premiums now are among the highest in the nation, and workers, whose benefits are about the lowest. But employers and private sector unions generally are allied on this issue, realizing they both are being ripped off by the $12-billion system.

“The longer this drags out, however, the more watered down the eventual product will be,” Johnston says.

“The other thing is, the political impetus will be dissipated as the captains of industry go off to their summer homes and their vacation retreats. Now, there are pressures and great expectations by the business community. If it drags, their attention span and optimism will wane. Then the self-fulfilling prophecy kicks in: ‘Oh, it’s just another year, nothing important is going to happen.’ ”

In another month, Sacramento will be into 100-degree weather. Things in the capital will be hot and there’ll be no serenity. So the Big Five are trying to get the hard work done while the climate is comfortable.