NEWS ANALYSIS : Workers' Comp Session Will Be Partisan : Capitol: Although Wilson and the Democrat-controlled Legislature agree on key areas of overhauling the system, the GOP governor is poised to use political leverage.

By CARL INGRAM and JERRY GILLAM

Sept. 23, 1992 12 AM PT

TIMES STAFF WRITERS

SACRAMENTO — Despite Gov. Pete Wilson’s intention to veto legislation overhauling the money-hemorrhaging workers’ compensation system and his efforts to cast the issue in sharply partisan terms, he and the Democrat-controlled Legislature had agreed on some key areas of reform.

To be sure, deep divisions remain, especially in the increasingly costly areas of stress-related injuries and vocational rehabilitation for injured workers.

Those differences are certain to be fully highlighted when the Legislature reconvenes Oct. 8 for a rare election-season special session ordered by Wilson.

From big and small business firms to organized labor to legislators of both political parties, there is wide agreement that California’s system for compensating workers who get hurt on the job is costing too much money and providing benefits that are too low.

Workers’ compensation reform also may be a good political issue for the governor because his Republican constituency includes entrepreneurs who complain that the system’s high costs are among the factors driving businesses out of the state.

Wilson has compiled a list of about a dozen Democratic members of the Assembly whom he will attempt to pressure into voting for his workers’ compensation proposals during the special session. The governor’s plan is to make personal appearances in these legislators’ districts during the week before the session and lobby for reform, citing the lawmakers by name in an effort to make them feel public pressure.

“Are we politicizing the issue? Of course,” said Dan Schnur, Wilson’s spokesman. “What’s a better way to get these people to listen than to give them a political incentive?”

Wilson plans to campaign for reform in Los Angeles, San Diego, San Bernardino, San Jose, Santa Rosa and Fresno. Among those targeted are Assembly Democrats who are in tough reelection races, including Dede Alpert of Coronado, Bob Epple of Cerritos, Mike Gotch of San Diego, Terry B. Friedman of Los Angeles, Tom Umberg of Garden Grove, John Vasconcellos of Santa Clara and Dan Hauser of Arcata.

Democratic leaders say that during the special session, at least one committee will be appointed to consider the controversial issue. But these leaders also say that most legislators will leave Sacramento after two days to resume their election campaigns.

Protesting that they are being dragged back to Sacramento only because Wilson wants to criticize them, Democratic leaders have said that no agreement on substantive workers’ comp legislation is likely before the election.

Democrats insist that they gave Wilson a package that would save recession-battered employers $1.1 billion a year in insurance premiums.

In an Aug. 29 letter to Democratic leaders, the governor promised to veto any legislation that did not contain “substantial cost reductions” and produce benefits that would stimulate jobs and the sour California economy.

Even so, comparisons of what each side had sought during the summer session--what the Legislature produced and what Wilson has supported--suggest that the two sides bridged many gaps.

Both the Democrats and the governor would substantially increase cash benefits to workers injured on the job; those benefits currently are among the lowest in the nation. The Democrats want the increases to start next year; Wilson favors even higher benefits but wants them phased in starting in 1994.

Both sides agree that to help contain soaring medical costs, employees who had not chosen a personal physician should be routed to less expensive health maintenance organizations or preferred provider organizations.

Likewise, both sides want to root out what virtually everybody agrees is deeply entrenched fraud by unscrupulous middlemen. Each supports requiring workers, employers, doctors, lawyers and insurers to declare under penalty of perjury that they had not offered or received kickbacks for making referrals. Further, convicted fraud artists would have to pay restitution.

The Democratic proposal and the employer-supported Republican plan embraced by Wilson would save employers comparable amounts--$1.2 billion in the Republican plan, $1.15 billion in the Democrats’ version.

In charting his course, Wilson last May initially drew heavily from recommendations of his highly touted Council on California Competitiveness, headed by business executive Peter Ueberroth. Subsequently, however, the governor backed away from some of its key recommendations.

Both Wilson and his Democratic opponents agree that progress was made and that some significant disagreements were overcome last month among Democrats and their allies in labor and the GOP governor and his supporters in business.

But failure to agree on the very costly issues of compensating for employee stress, rehabilitating injured workers and repealing a guaranteed level of return for insurance carriers thwarted a final compromise, both sides agreed.

“These are the big differences,” said Senate President Pro Tem David A. Roberti (D-Van Nuys). “On just about everything else, we were pretty close together.”

“The substantial differences are where there are substantial costs,” Loren Kaye, the governor’s Cabinet secretary, said of the stress and rehabilitation issues. “These are big money, fundamental issues.”

On stress claims, the Democratic proposal raises the threshold for a claim, requiring that a worker prove that a stress-related injury is at least 51% caused by workplace events, rather than the 10% under current law. Wilson favors proof that a “sudden and extraordinary” event was the predominant cause for stress compensation.

On the largely open-ended vocational rehabilitation programs for retraining injured employees, the Democratic plan would limit both the costs and the length of rehabilitation. The GOP bill that Wilson favors repeals these programs.

Assembly Speaker Willie Brown (D-San Francisco), who contends that Wilson is bent on removing him as Speaker, said he believed Wilson made a mistake by not accepting the workers’ compensation package sent to him by Democrats on a party line vote--even if it did not meet all his demands.

“If you demanded 100% and I say, ‘Here’s 75% with no conditions that would relieve the misery of 60% of the people,’ you’d be a damn fool not to take it and keep on arguing for the other 25%,” Brown said.

“He cost the employers of this state a ton of money in this recession by not signing it and now saying I want more,” Brown said of Wilson.

Senate GOP Leader Kenneth Maddy of Fresno said Republicans had feared that if they joined in approving the Democratic package they would get “burned” as they were three years ago when a less ambitious overhaul bill was offered at the last minute.

“In that bill, we guaranteed benefits (for employees) and speculated about savings (for employers),” Maddy said. “Well, we got no savings, but we got benefits.”

Yet Maddy termed himself “somewhat surprised” that Wilson had called a special session on workers’ compensation. Some GOP senators seeking reelection “are concerned about the time it will take (away from campaigning), even if they are on the right side of the issue,” he said.

Additionally, Maddy said Republican senators had voiced concerns privately about returning to Sacramento unless large and small members of the diverse employer community present a unified front “on what (they) will accept as significant reform.” Otherwise, he said, “We just come back and slop around.”