Governor's Budget Requires Employers to Fund the Division of Workers? Compensation

By Loretta Macktal, Executive Assistant to the Vice President, Government Relations

Capitol Update, Feb. 2, 2003 Share this on FacebookTweet thisEmail this to a friend

In response to Governor Gray Davis' budget proposal to shift workers' compensation general fund cost to employers, SBx1 10 by the Budget and Fiscal Committee would require the entire Division of Workers' Compensation (DWC) budget (approximately $102 million) be paid by employers. CMTA is opposed to the bill because it would increase employers' workers' compensation costs significantly without any changes to help offset this cost increase.

Under current law, employers pay 20 percent of the DWC budget. Workers' compensation reforms in 1989 created several new entities such as the Industrial Medical Council, Office of Benefits and Audits that significantly increased the duties of the DWC. Employers actively participated in developing the legislation and, wanting to make sure the reforms were implemented, agreed to provide the additional funding needed to staff the new positions and conduct the rulemaking.

California's workers' compensation system is seriously flawed, failing to serve either injured workers or employers. Employers pay the highest workers' compensation costs in the nation with premium increases averaging over 40 percent in 2002 and well over 50 percent in 2003 with no end in sight. Any meaningful ideas to fix the system offered by employers are routinely ignored.

SBx1 10 would permanently tax employers to fund the DWC with no control on how the funds are used or any way to monitor or require improved performance. There are no controls on future budget requests and, since the general fund would not be impacted, there is no reason for the legislature to question or deny any amount requested by the DWC.

CMTA will continue to oppose the bill unless some meaningful reforms are added that would reduce employers' costs. The bill is on the Senate floor.
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