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SIDES DIFFER ON PROGRESS OF WORKERS' COMP TALKS.

Byline: David M. Drucker Sacramento Bureau

SACRAMENTO - Gov. Arnold Schwarzenegger's latest deadline for a legislative deal to reform the workers' compensation insurance system came and went Friday, with Democrats and Republicans differing on the progress of the talks.

State Senate Minority Leader Jim Brulte, R-Rancho Cucamonga, said the negotiations have gone backward as of late, and listed a handful of key issues that remain unresolved. Assembly Speaker Fabian Nunez, D-Los Angeles, said they are 95 percent of the way toward an agreement.

Though some legislative leaders planned to spend the weekend in Sacramento to work on the matter, Schwarzenegger left the capital Friday afternoon for Los Angeles. His spokesman said he would be available to return if necessary, but in the meantime the governor is urging voters to sign a petition that would put his reform package on the Nov. 2 ballot.

``No deal today. We continue to be hard at work,'' Schwarzenegger spokesman Rob Stutzman said after the governor met with the four legislative leaders.

``But as of now the governor would encourage Californians to get out to shopping centers this weekend and sign the petition.''

State law requires businesses to carry workers' compensation insurance, which covers the cost of medical treatments and disability payments for employees injured on the job. But in recent years, prices have increased - with many employers' rates tripling since 2001 despite accident rates that have declined or remained stagnant.

Small businesses have been especially hard-hit, but even large companies such as Costco Wholesale are crying foul. The firm, based in Washington state, says its California employees account for 40 percent of its payroll but 70 percent of its workers' compensation costs. It vows to move some operations out of the state unless the system is reformed.

``If something isn't done, we'll have to rethink where we're growing our business and what we're doing with our business here in California,'' Costco spokeswoman Suzanne Guyan said.

The administration would not comment on the negotiations, other than to say Schwarzenegger's proposed $11 billion overhaul - which relies on free-market principles and shuns state regulation of rates - is still the basis for a deal.

Senate President Pro Tem John Burton, D-San Francisco, was also vague when asked if any progress resulted from Friday afternoon's ``Big Five'' leadership meeting.

But Brulte did elaborate, and the picture he painted was one of legislative gridlock, contradicting Nunez's assertion that a deal is imminent. Nunez declined to provide details for reporters.

According to Brulte, four issues he called the ``major cost-drivers'' in the system are far from resolved, including:

--Penalties: Currently, insurance companies pay a penalty - sometimes up to 10 percent of their total settlement - if the check does not get to the injured worker on time. Insurers complain that those who make the mistake in good faith should not pay as high a penalty as those who deliberately skirt their responsibility.

--Permanent, partial disability: The insurance industry wants an ``objective'' standard of injury classification to be adopted so injured workers cannot shop for a doctor who will declare them to have a partial physical disability that will last permanently. Employees who are ruled to have such injuries receive larger payouts.

--Causation: Currently, employers can be liable for treating the total cost of an injury that is not necessarily sustained entirely on the job. Republicans want businesses to pay for only that portion of an injury that can be attributed to an employee's job.

David M. Drucker, (916) 442-5096

David.Drucker(at)dailybulletin.com
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Publication:Daily News (Los Angeles, CA)
Article Type:Statistical Data Included
Date:Mar 27, 2004
Words:581
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