The campaign for workers comp reform was only six-plus years ago, yet, as Yogi Berra might say, it looks like déjà vu all over again. Workers comp is an important issue for business again with the threat of workers comp insurance premium increases possibly hitting 30-percent.
The Small Business Action Committee’s first important policy activity after it came into existence was to promote a change in the workers comp system that was crushing businesses. We amassed support from over 20,000 small businesses and a few large ones, as well, in our effort to reduce the burden on business.
Dan Walters gave an excellent recap of the once and future workers comp crisis in his column yesterday.
Walters noted that businesses saw workers comp costs drop $15 billion a year after the 2004 reforms achieved by Governor Arnold Schwarzenegger and the legislature.
With the savings, employers were able to expand their inventory or hire new employees and generally spend money in ways to encourage economic growth instead of paying off higher insurance costs.
Are we headed to the bad old days with big premium jumps? On top of business slowed by recession, massive workers comp increases could send some small businesses looking for a life -preserver in a deep sea.
As if raids by other states on California businesses are not bad enough now, the pressure will be increased if workers comp costs start reflecting the situation of seven years ago. Out of state business development agencies purchased ads in California business journals urging businesses to relocate.
Given the problems with an anti-business atmosphere full of burdensome regulations, high taxes, difficult permit processes, and too many lawsuits, workers comp spiraling out of control could be the last straw for many small businesses hanging on by their fingernails.
The Small Business Action Committee carried an initiative that Governor Schwarzenegger used effectively to convince the legislature to pass a workers comp reform in 2004. At the time the reform was passed, a couple of legislators urged us to file our signatures anyway thus placing the initiative on the ballot because they believed our initiative reform was stronger than what was coming out of the legislature. We did not file the petitions even though we had enough signatures to get the measure on the ballot.
With the threat of troubling workers comp increases facing business again; we will see if that was the right move.