Lawmakers Hashing Out Workers’ Comp Deal

A partisan stalemate over reform of California’s costly workers’ compensation insurance system showed signs of easing Wednesday as lawmakers indicated that they’d work toward giving Gov. Arnold Schwarzenegger at least part of the cost-saving changes he had been demanding.

Veteran lobbyists said the pieces were now in place to begin working toward a deal, increasing the chances that legislators could pass a workers’ comp reform bill by the end of March.

That timetable could miss the governor’s publicly proclaimed March 1 deadline for launching a campaign to get a workers’ compensation measure on the fall ballot if the Democrat- dominated Legislature didn’t give him a bill by then.

But the timing is close enough that passage of what the governor calls “meaningful reform” could enable employers to begin saving billions of dollars in workers’ comp costs this summer, the lobbyists said, blunting the drive for a statewide vote on the issue.

The improving prospects for a legislative fix to the workers’ comp system followed a closed-door sit-down late Tuesday of the so-called Big Five: Schwarzenegger and the leaders of the Democratic and Republican caucuses in the state Assembly and Senate.

The leaders directed their staffers to begin brainstorming ways to cut costs in the $29-billion-a-year system without reducing benefits paid to injured workers.

Business owners, local government leaders and executives of nonprofit organizations complain they are having a hard time paying premium bills that have skyrocketed in recent years despite a drop in claims. Business leaders and the governor have made workers’ comp reform their top priority for protecting California jobs.

Schwarzenegger, although prepared to launch a ballot measure, would prefer a legislative solution, spokesman Vince Sollitto said. Consequently, he’s “encouraged by the tone of the meeting and considers it very positive that the Legislature is engaging.”

“Positive” was also on the lips of key lawmakers during a hearing of the Assembly Insurance Committee on Wednesday. Abel Maldonado (R-Santa Maria) and Chairman Juan Vargas (D-San Diego) engaged in cordial, parliamentary patter.

Vargas and Maldonado agreed to postpone a vote on the governor’s workers’ compensation bill, avoiding what many saw as a likely defeat. Both acknowledged that they were looking to the governor and legislative leaders to prepare the ground for fruitful negotiations.

For his part, Fabian Nunez of Los Angeles, the new Assembly speaker, said he was determined to pass a workers’ compensation bill this spring.

“We’ve got to do it as soon as possible,” he said, “but we’ve got to do it right.”

California Labor Federation President Thomas Rankin said he had picked up signals that various parties in the workers’ compensation battle were “now looking at other approaches” in hopes of avoiding a ballot fight. He stressed, however, that unions would be vigilant about protecting workers and ensuring that any savings from reforms didn’t end up as insurance company profit.

Bringing together the Big Five is an essential first step in ending the workers’ comp gridlock, said Kevin Sloat, who put together many difficult deals as legislative secretary to former Republican Gov. Pete Wilson.

“They’ve started to agree on a process and then they’ll move into the details,” said Sloat, who now lobbies for American International Group Inc., a New York-based insurer that sells workers’ compensation insurance in California. “The next step is critical.”