NCPA - National Center for Policy Analysis


August 27, 2007

Gov. Arnold Schwarzenegger and the California Legislature aren't getting enough credit for complex bipartisan reforms to worker's compensation laws in 2004.  Their legislation has solved what was then seen as California's No. 1 economic problem, says the San Joes Mercury News.

The current workers' compensation system isn't perfect, says the News.  But the state did well in adopting a less subjective rating system for evaluating injuries, tightening eligibility for permanent disability payments and permitting injured workers to seek immediate medical attention paid for by the employer.  The result:

  • Rates have dropped by more than 35 percent since July 2003.
  • California businesses spent an average of $5.23 per $100 of payroll for workers' compensation premiums in 2002.
  • That number is now hovering at just over $4 per $100 of payroll, while Alaska's - the nation's new leader in workers compensation premiums -- has climbed to $5.

Schwarzenegger and leaders in the Legislature had success on workers' compensation by focusing on the big picture, says the News.  Get the fundamental approach right and work out the details later. That approach offers the best chance of enacting health care reform before the Legislature adjourns in mid-September.

Source: Editorial, "Editorial: Workers' comp reform offers model for California health care," San Jose Mercury News, August 27, 2007.


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