Published
5 years agoon
Gavin Newsom loves high-concept, almost edgy, approaches to governance – not unlike a younger Jerry Brown during his first governorship four decades ago.
Brown was a party to one such sneak attack in the final days of his first governorship in 1982 that preyed upon employers, raising their costs by $3 billion a year. Exactly 30 years later, he presided over another.
In 2012, employers and unions, with insurers’ neutrality, agreed to raise cash payments to workers with “permanent partial” disabilities, the most expensive payouts, and offset the cost by squeezing medical care and eligibility for benefits.
The deal was opposed by medical groups and lawyers, but was pushed through the Capitol in the dying days of the 2012 legislative session and signed by Brown.
From an employer standpoint, it was a roaring success. At the time, it was supposed to raise benefits by $740 million a year and reduce costs by a like amount. However, the Workers Compensation Insurance Rating Bureau, which monitors the system, reported last year that the “reform” reduced annual employer costs by $1.3 billion, more than offsetting the cash benefit boost.
Nevertheless, those costs remain very high relative to payrolls, and fuel the perennial search for a new coalition – meaning that if elected, Newsom will also face the issue.
Oregon’s workers compensation system is the go-to oracle on how costs vary from state to state. Its latest national survey, released this month, found that California, which long had the nation’s highest costs as a percentage of payroll, had dropped to No. 2 behind New York.
California’s current rate in the survey, 2.87 percent, is down from 3.24 percent in the 2016 survey, but still two-thirds higher than the national median of 1.7 percent. That differential translates into about $7 billion a year in higher California employer costs.
Dan Walters has been a journalist for nearly 60 years, spending all but a few of those years working for California newspapers. He has written more than 9,000 columns about the state and its politics and is the founding editor of the “California Political Almanac.” Dan has also been a frequent guest on national television news shows, commenting on California issues and policies.
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