California Republican Gov. Arnold Schwarzenegger has vetoed a package of legislation including bills to change the worker's compensation disability rating schedule and provide swifter payment for injured worker retraining.

The governor argued that the bills in question would have endangered reforms by increasing litigation.

Mr. Schwarzenegger in a statement Friday said, "Some of these bills would have rolled back the successful reforms we implemented to reduce workers' comp rates and protect injured workers. These savings have helped our economy thrive--allowing employers to hire more workers, grow their businesses and buy more equipment."

Gov. Schwarzenegger noted that unemployment is at its lowest levels in the state in the past 30 years while personal incomes are growing and state revenues are at record highs. "These bills would have reversed the success we've had in putting California back on track," he added.

Among the bills vetoed by Gov. Schwarzenegger was Assembly bill 1636, sponsored by Assemblyman Tony Mendoza, D-Artesia, which would have built on existing law requiring employers to provide a voucher to injured workers who are permanently disabled that would pay for them to obtain re-education and training in another line of work.

The bill would have required such a voucher to be issued within 74 days of the determination of the disability as permanent, and in cases where the percentage of disability had not yet been determined the voucher would be based on a "reasonable estimate of the percentage of permanent disability" and adjusted later.

In his message to the Assembly explaining the veto, Gov. Schwarzenegger noted that its intent was to address a legitimate problem in the system.

"Unfortunately, rather than addressing existing problems, this bill will create more problems," he said. "The procedures proposed by this bill for the issuance of vouchers are vague and will encourage litigation over when the vouchers are to be issued and in what amount. We have worked too hard to remove unnecessary litigation from the workers' comp system to now let it back in."

The governor used the same argument in rejecting a bill regarding supplemental job displacement benefits. Senate bill 942, sponsored by Sen. Carole Migden, D-San Francisco, would have allowed for employees to receive a supplemental job displacement benefit if they were not able to return to work 60 days after their disability became permanent and stationary.

There would be an exception if the employer offered the injured employee regular or modified work. Under current law, the employer must only provide the benefit within 60 days of the termination of any temporary disability indemnity payments paid to the employee.

Another Senate bill rejected by the governor was Senate bill 936, from Sen. Don Perata, D-Oakland, which would have made changes to the state's permanent disability schedule, increasing the amount of time an injured worker would receive benefits.

In his veto message, Gov. Schwarzenegger said that reforms enacted in recent years have significantly decreased workers' comp rates, saved employers billions and increased the return-to-work rate. Much of that success, he said, can be attributed to the disability schedules which replaced what he called a "highly subjective system that encouraged litigation" in determining a workers' disability.

"Some have expressed concerns that this change has reduced benefits too severely," he noted. "To that end, my administration has conducted an extensive review of the data from both the new and old disability rating schedules to determine what, if any, changes need to be made to the new system so that injured workers receive appropriate benefits.

"This bill, on the contrary, arbitrarily doubles the number of weeks a person may be eligible to receive permanent disability benefits. It substantially increases costs for all permanent disability awards regardless of severity and without relying on empirical data to validate the increase. I cannot support making such arbitrary changes to the system we worked so hard to reform."

Instead, the governor said he would instruct the head of the state Department of Workers' Compensation to finalize a review of the disability schedule as quickly as possible and to begin the rulemaking process necessary to implement the changes the department sees as necessary.

Special Reports /

Calif. Gov. Vetoes Comp Bills

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