Lawsuit Targets Ariz. Worker Injury Fund Grab

April 9, 2009

A state commission that oversees workers’ compensation has sued top state officials to try to keep the state from taking $4.6 million paid into a special fund by insurance companies and self-insured employers.

A budget-balancing law approved by the Legislature and Gov. Jan Brewer in January to close a $1.6 billion deficit included numerous transfers from special-purpose funds.

Those transfers included $4.6 million that the Industrial Commission contends is private money that does not belong to the state.

A lawsuit filed by the commission with the Arizona Supreme Court against Brewer and Treasurer Dean Martin also contends that the transfer is unconstitutional as a prohibited government “taking” of property without compensation.

The commission said the money is intended to promote vocational rehabilitation of injured workers, compensate workers for second injuries, pay claims against insolvent insurers and compensate workers whose employers failed to obtain coverage.

Aides to Brewer and Attorney General Terry Goddard said their offices were reviewing the lawsuit and had no immediate comment on it.

The lawsuit is the latest of several challenges to budget provisions enacted in 2008 and 2009.

In February, the Arizona Supreme Court overturned a provision enacted in 2008 requiring local governments to pay nearly $30 million to help balance the current state budget.

In March, a Maricopa County Superior Court judge temporarily barred the state from implementing budget cuts for services for the developmentally disabled.

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