Two weeks ago, on the morning of February 1st, AB 749 (Calderon), a 95-page bill to raise workers’ compensation benefits for injured workers by $3.5 billion and to make numerous other changes to our state’s complex workers’ compensation system, landed on my desk with a thud. Except for the annual Budget Bill, about 99% of the bills introduced in the California Legislature are not half the size of AB 749. I guess I’m lucky that I don’t have one of those fiberboard desks.

My job was to analyze the proposed changes to 80 different sections of the law in AB 749 and to outline for legislators the pros and cons of the major provisions before the weekend was out. I was informed that the authors of the bill, Assemblyman Calderon and Senator Burton, were planning on rushing the bill through both the State Senate and Assembly in a single day, on Monday, February 4th. As I began to comb through this behemoth of a bill, I got the distinct feeling that I was actually reading Dracula, the novel. I turned the pages, one by one, and it was getting a bit scary. Like Dracula himself, some legislators are rather shy about exposing their bills to the bright sunlight of public hearings and debate.

AB 749 (Calderon) will increase the cost of workers’ compensation benefits by $3.5 billion over a four-year period, padding the pockets of special interests while forcing the businesses in our state to pay 22.7% more for workers’ compensation insurance over and above the double-digit rate increased that they are already experienced. Workers’ compensation costs for employers in our state have increased 77% in the last three years. Because the large benefit increased in AB 747 is not offset by sufficient cost-saving reforms, businesses will be forced to lower wages, lay off workers, or move to another state to compensate for this increased cost of doing business in California. Putting more financial burdens on business owns and their hardworking employees during a recession is simply bad public policy for our state.

This bill will also have an adverse impact on needed government programs for the people of our state. Adding hundreds of millions of dollars in a new workers’ compensation costs to the state government, cities, counties, school districts and other special districts will result in the reduction in spending for roads, police and fire protection, health care, infrastructure repair and other important priorities. For example, schools already pay more in workers’ compensation costs than for textbooks. The enactment of AB 749, if signed into law by Governor Davis, will make this absurd situation even worse.

There are numerous provisions in AB 749 that seem to be designed to financially benefit certain special interest groups rather than help injured workers and employers. Applicant attorneys, the sponsor of the bill, turn out to be the big winners. Seriously injured workers certainly deserve a benefit increase, but this bill provides that most of the benefit increases will go to workers who make claims for unproven soft tissue injuries. Some of these workers will be a permanent disability award and never miss a day’s work. The applicant attorney gets a cut from each of these permanent disability awards. Volume is the game.

This bill will also provide a new opportunity for any worker who submits a workers’ compensation claim and has hired a lawyer to negotiate a $10,000 settlement with the employer instead of taking vocational rehabilitation classes. Of course, the applicant attorney will get a cut from this new pot of money created by law. Ultimately, hardworking employees who play by the rules will have their paychecks docked to redistribute money to those who want to take advantage of the overly complex and fraud-ridden workers’ compensation system.

I could go on and on describing the various special interest provisions that are tucked in this 95-page bill that was rushed through without public scrutiny, but I fear that I would try the patience of the gentle reader. Besides, tapping out all the details on my computer might just be enough to give me carpal tunnel syndrome that would make me eligible for a disability claim.

Pushing through a 95-page bill that contains a $3.5 billion benefit increase and make changes to 80 different sections to workers’ compensation law through the Legislature in a single day is a disgrace and an embarrassment to all who cherish deliberative government. Apparently, the leadership of the Assembly and State Senate think that if the Governor, a few legislators and several special interest groups can all agree on the contents of a workers’ compensation bill, then it’s ok to run the “deal” through the legislative process in only one day. It’s like “contracting out” the legislative process to a very small group of legislators and special interest groups. If you don’t have enough special interest heft to be invited to the negotiating “table,” your ox will probably get gored. Is this how the legislative leadership believes our representative Democracy should work? Or do they believe that government “by the people, of the people, for the people” is just old fashioned?

Rookie Assemblyman Keith Richman (R-Sun Valley) told his colleagues Monday evening, right before the vote on AB 749, that “the process that surrounds this bill brings shame to the Assembly and will only engender more public cynicism.” It was to no avail. The Assembly passed the bill 44-29. Most observers believe that Governor Davis will sign AB 749. It appears that, unlike the novel Dracula, we won’t have a happy ending in this unfortunate story.

February 15, 2002

Postscript: Governor Davis signed AB 749 into law.