 Bill on workers' comp is halted By Jim Sams SACRAMENTO -- Gov. Gray Davis has intervened to put the brakes on legislation that could increase taxes by $1 billion and cost employers an extra $2.7 billion in workers' compensation premiums, but a bill that would increase state disability payroll deductions is still on the table. A legislative staff member, who spoke on the condition he not be identified, said Tuesday that Sen. Hilda Solis, D-El Monte, intends to let her bill to expand unemployment benefits die in committee. And Solis was not optimistic that a proposed expansion in workers' compensation benefits will be approved this year either. "Whether we get though this legislative session with major reform, maybe not," Solis said. "But at least we have had some discussion about it. I would say that we are moving very cautiously." Three workers' benefits bills introduced by Solis have passed the Senate and are scheduled to be heard today by the Assembly Appropriations Committee. Only the bill that would increase employees' State Disability Insurance deductions, however, is likely to be heard. The workers' compensation and unemployment insurance bills will likely be placed in the committee's suspense file, a holding place for big-ticket items with which lawmakers typically deal near the end of the session. The proposed increase in SDI benefits would cost higher-wage employees up to $72 in extra payroll deductions each year. Solis' Senate Bill 656 would increase the maximum weekly disability check from $336 to $490 and increase a variety of other benefits at a total annual cost of $279 million. The state would pay for the expansion by raising the maximum amount of wages subject to taxation from $31,767 to $46,327, which would increase deductions for about 25 percent of workers, according to an analysis by the Senate Appropriations Committee. Solis said many workers can barely get by on the meager benefits offered by the SDI program, which in 1998 paid 600,000 temporarily disabled workers an average of $229 per week. But representatives of the California and Howard Jarvis taxpayer associations say Solis' bill is skirting the intent of the tax-limitation measure known as Proposition 13, approved by voters in 1978. Technically, the SDI deductions are not taxes, because the premiums are adjusted by the Employment Development Department based on the amount of claims paid. Still, Stephen Kroes, vice president of the California Taxpayers' Association, said he doubts most workers would elect to pay more for disability insurance in exchange for better benefits. "I think people need to ask themselves, 'Do I think it's worth it?' " Kroes said. " 'Should I pay this much more in tax when I probably won't use the system?' " Employees pay SDI premiums to insure that a portion of their wages will be replaced if they are disabled temporarily by injuries suffered while away from work. Workers' compensation insurance, which is paid by employers, replaces wages lost because of disabilities from on-the-job injuries. Solis and the Senate want to increase benefits under that program as well, but the governor's office has stepped in to make sure business interests play a part in the decision. Stephen J. Smith, director of the Department of Industrial Relations, said some increase in workers' compensation benefits is justified, but the governor would like to see something less than the expansion called for by Solis' SB320. "The governor has a style, especially on bills of this magnitude. He likes to achieve consensus if at all possible, so I'm working real hard with organized labor, with the employer community to see on what basis we can achieve a consensus," Smith said. SB320 would increase a variety of benefits for workers disabled on the job. For example, the maximum weekly benefit would increase from $490 to $651. The maximum weekly benefit for a worker disabled less than 70 percent would rise from $130 to $270. And the benefit paid to the surviving family of a worker killed on the job would rise from $160,000 to $320,000. The California Chamber of Commerce predicts that the bill would increase employers' premiums by 27 percent after three years on top of an 18 percent increase that a state advisory board is recommending insurers tack onto their rates to cover the rising costs of claims. Joe Myer, director of the Redwood Empire Schools Insurance Group, said the extra premiums caused by Solis' bill alone would translate into an extra $1 million in costs for his district. But Sen. Patrick Johnston, D-Stockton, said the cost of workers' compensation plummeted by $3 billion under a reform bill he introduced in 1993 and are at the same level they were in 1976. The state eliminated stress claims, allowed insurance companies to compete openly and cracked down on fraud under that legislation. Johnston said it's time workers received some of the benefits of the reforms. Labor groups saw the workers' compensation bill as a higher priority than the proposed expansion in the state's unemployment insurance program. SB546 would increase the maximum wage subject to taxation for the program from $7,000 to $9,000, costing businesses $714 million a year, according to the California Taxpayers' Association. The bill would have reimbursed unemployed workers for 50 percent instead of 39 percent of their lost wages and raised the maximum weekly benefit from $230 to $300. |