SBAC Notes Major Calif. Workers’ Comp Initiative

January 2, 2004

In a move to combat California’s out-of-control workers compensation system, the Small Business Action Committee (SBAC) announced that it has filed an initiative to reportedly reduce the cost of the system by as much as $10 billion. Titled “The Workers Compensation Reform Act,” the initiative will introduce much-needed reforms to a system which has reportedly tripled in costs in the past eight years alone, driving businesses and jobs out of California.

The proposed initiative will provide a comprehensive set of solutions for California’s workers’ comp system including: uniform standards for rating injuries; a reduction in excessive litigation; and more benefits for truly disabled workers. The initiative is intended for the November 2004 ballot and it is expected that petitions will be ready to circulate for signatures in February.

Improving the efficiency of the system should reportedly produce cost savings equal to about a third of the $30 billion dollar workers’ comp insurance program. The cost for workers’ comp has increased dramatically in recent years growing from $9 billion in 1995 to $30 billion today. In response to added costs businesses have moved out of California or cut jobs to deal with the increased premiums.

Proponents of the initiative are SBAC Founder and President Joel Fox and SBAC Board Member and Chairman of the SBAC Board of Governors, Chris George. The SBAC’s support for this initiative is a key component of the organization’s overall political agenda.

“From the outset, the Small Business Action Committee identified workers compensation as one of the top issues facing small businesses in California,” said Fox, a veteran of many California initiative battles and former president of the Howard Jarvis Taxpayers Association. “We hope that the legislature and governor will solve this problem. However, small businesses can’t wait to see if there will be a legislative solution before we take action. If there is no major workers’ comp reform in this coming session of the legislature, we need to have an initiative qualified for the November ballot.”

“These reforms are necessary to fix a badly broken workers’ comp system that will save businesses billions of dollars each year,” added George. “This savings will allow small businesses to expand and provide new jobs.”

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