California lawmakers overhaul workplace injury insurance

Reuters News
Posted: Sep 01, 2012 3:28 AM
California lawmakers overhaul workplace injury insurance

SAN FRANCISCO (Reuters) - California lawmakers on Friday approved a bill supported by business and labor groups to overhaul the state's insurance system for workers injured on the job.

The bill, which received overwhelming bipartisan support in the Democrat-led legislature and was approved just ahead of the end of their session for the year, increases disability benefits by more than $700 million a year.

At the same time, the bill aims to rein in the rising cost of workers' compensation insurance premiums as well as lawsuits over injury claims. Lawyers who represent injured workers had opposed the bill.

The last time leaders of the most populous U.S. state revised its workers' compensation system was in 2004 under then-Governor Arnold Schwarzenegger. The latest reform effort had the backing of Democratic Governor Jerry Brown, who personally appealed to lawmakers to support the bill after it appeared to have stalled.

Earlier on Friday, lawmakers approved public pension reforms hammered out by Brown and the legislature's senior Democrats. The reforms could save California and its local government tens of billions of dollars in pension-related spending, which has become a political concern across the state.

Critics, however, said the bill did not go far enough and that further changes would be needed to tackle the state's massive unfunded pension liability.

Brown intends to promote the pension reforms as proof of fiscal discipline as he campaigns for his November ballot measure that would increase the state's sales tax and income tax rates on the wealthy.

Revenue raised by the measure would be used to prevent cuts to education spending over the near term and for general spending in coming years. California's leaders, like their counterparts in other statehouses, have faced lean revenue in recent years and have been slashing spending to keep budgets balanced.

(Reporting By Jim Christie; Editing by Pravin Char)