California Keeps Digging

December 3rd, 2003 by

Question: What is the first rule of “holes?” Answer: When you’re in one, stop digging.

Members of the public who have been following this column know that we, here at LynchRyan, have been absolutely fascinated with the workers’ compensation goings on in California, the state that, if it were a country, would have the world’s fifth leading gross national product.

While the eyes of the nation have been riveted on the political codswallop coming out of the “golden state,” California’s employer community is now paying workers’ compensation at the rate of 6.3% of payroll, more than three times the national average.

In the waning days of the Davis Administration, Senate President Pro Tem John Burton, D-San Francisco, maneuvered California’s legislature to approve a series of reforms aimed at reversing the runaway costs, which have climbed $20 billion in the last four years to reach $29 billion in 2003.

Davis signed the legislation and Insurance Commissioner John Garamendi estimated savings of $5 billion in 2004. But during his “campaign,” then-candidate, Arnold Schwarzenegger, called the legislation, “bogus bills.” As we all know, Schwarzenegger was elected and promised, during his inauguration speech, to cut workers’ compensation costs by $11 billion. And now “the game’s afoot.”

Last week, a state Senate committee voted to overturn the reforms. “If they think it’s a ‘bogus bill,’ if they think they can do so much better, they should have the opportunity,” Senator Burton said. “Let them sit in the endless meetings, let their constituents be all over them.” The legislature is now convening new committee hearings with the purpose of crafting new reforms.

Essentially, California is back at square one. We will continue to watch the fur fly.

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