Haynes is an Assembly member representing Riverside and Temecula.
He serves on the Appropriations and Budget Committees. [go to
Assembly Member Haynes
website at California Assembly]
Something Isn't Better Than Nothing
Workers' comp needs a real fix, not patchwork legislation
[Ray Haynes] 9/13/03
at long last to the pressure from employers in this state to “do something” about workers’ compensation,
the state legislature has passed a bill to try to pacify them.
On the last day of session a bill was passed to try to deal with
the exploding costs of this system. And legislation dealing with
these costs is badly needed. Unfortunately, this bill falls far
short of what is necessary and while it does “something” about
the problem, in this case, it would have been better to have
done nothing at all.
The system, which
cost employers about $10 billion five years ago, has tripled
to almost $30 billion statewide. Double-digit
rate increases are expected again at the beginning of next year.
Our employers pay more than any other state in the nation, and
yet our employees still receive among the lowest benefits nationally.
The high premiums are the single most cited reason for businesses
packing up and leaving the state. Serious structural reform is
needed in the system quickly to stop the tremendous damage that
is being done to our business climate. Unfortunately, this wasn’t
Republicans involved with the negotiations had pushed for reforms
that would total $10 billion in savings. The Democrat Chair of
the conference committee had a stated goal of $5 billion in cost
reductions. The end package has been estimated by Democrats to
save from $4-$7 billion, but outside experts place the number
at something closer to $2 billion. At best, the bills that were
passed may prevent the first round of premium increases projected
for January of next year. Nobody seriously believes that there
will be any rollbacks or decreases in the extremely high rates
that exist today.
Isn’t it better
to have something than nothing? In the end, we decided that
it was not.
First of all, passing
a watered down bill like this will take the sense of urgency
for real reform out of the equation. It
has taken years to build the overwhelming pressure that is being
felt in the Capitol over this issue today. Make no mistake about
it—the legislature felt the heat from angry businesses
and employers in this state and that is the only reason that
they have rushed this half-baked package of reforms through in
the last week of session. They are afraid if they hadn’t
done “something” about it, they (or their Governor)
would have been punished for it in the upcoming elections. Unfortunately,
by letting them pass such watered-down reform, it will allow
them to declare victory, and claim they have done “something” about
workers’ compensation in this state. This will release
the pressure being felt in the capitol and take the wind out
of the sails of the serious reform movement. It will take a long
time before employers realize they were snookered, and that the
hoped-for decreases in workers compensation aren’t going
to happen. Rallying the employers again around new reform efforts
will take time and effort and will confront a group of people
who will be even more cynical than they were before about the
value of organizing and lobbying the legislature after having
been let down and lied to again this time.
Second, there is a
better than even chance that we are going to have a new Governor
in this state, and probably a 50-50 chance
at this point that that new Governor will be far more receptive
to pushing serious reform with the legislature. The current Governor
signed the legislation last year that helped create billions
of dollars in new costs in the system and has continually resisted
requests by the Republicans to call a special session to deal
with this problem. A new Governor could come in without being
obligated to the trial lawyers and union leaders who have helped
corrupt the system, and could use the efforts of a still-energized
and angry employer base in this state to force reforms through
the legislature, or even the ballot box if the legislature isn’t
willing. Passing this legislation may dilute that possibility.
By accepting these
minor cost reforms, we have lessened the opportunity for more
serious change in the system next year.
I hope the savings that may materialize will help a few companies
stay in business a little while longer. Company’s rates
have doubled and tripled in the last year or two. We needed a
serious solution to this very serious problem. We didn’t
get one. Sometimes, in the long term, just doing “something” is
worse than doing nothing at all.