THE CALIFORNIA LEGISLATIVE SHOWDOWN : Panel OKs Workers’ Comp Overhaul : Legislation: The Democrat-sponsored measure was approved over GOP objections. Negotiations continue and Legislature could vote on reform package today.

SACRAMENTO —  With time running short and deep divisions remaining, a legislative committee approved a Democrat-sponsored workers’ compensation package Sunday over Republicans’ objections.

The action opened the way for the full Legislature to vote on the package by midnight tonight, the scheduled end of the 1992 legislative session. Negotiations continued between Republican and Democratic lawmakers.

“Workers’ comp deals historically come together in the last hours of the session,” said Casey Young, a Wilson Administration official who is negotiating for the governor.

Both sides say they want to cut escalating costs of the troubled $12-billion system and increase benefits to injured workers. But each continued to accuse the other of not being serious about a deal.

Gov. Pete Wilson said in a letter to Assembly Speaker Willie Brown and Senate President Pro Tem David A. Roberti (D-Van Nuys) that he wanted to sign a workers’ compensation bill into law and said he is “flexible on how to achieve meaningful reforms.”

Brown shrugged off the letter and renewed the Democratic charge Sunday that Wilson does not expect to sign a bill but expects intends to use workers’ compensation as an issue against Democrats this fall.

However, it remained to be seen whether a deal could be struck that would satisfy Brown.

The Speaker wants immediate deregulation of insurance rates imposed on employers, arguing that that would lower costs to employers. But the legislation, which cleared the conference committee on a party line 4-2 vote, stops short of immediate deregulation and instead shifts some authority to set rates to Insurance Commissioner John Garamendi, which Brown opposes.

On Sunday, Brown made a brief appearance in the committee room and seemed far more relaxed than when he visited the committee late Friday to tell his Democratic colleagues that he opposed the insurance proposal.

“I’m watching closely to make sure (the committee members continue to) work,” Brown said after leaving the room Sunday.

After Brown’s visit on Friday to express his displeasure, the committee shelved the bills, seemingly killing any chance of a workers’ compensation overhaul for this year.

But Assemblyman Burt Margolin (D-Los Angeles), who is taking the lead in crafting the overhaul, succeeded Saturday in getting a rule waiver that allowed the committee to meet well past the deadline for such hearings.

Another member joined the committee on Sunday--Assemblywoman Gwen Moore (D-Los Angeles), part of Brown’s inner circle. She was a non-voting member. Moore, who has carried workers’ compensation legislation before, was hoping to get consideration of a bill that she authored.

Assemblyman Steve Peace (D-Chula Vista), who voted against the measure Friday, cast his vote in favor of it Sunday after making some changes.

The Democratic-controlled Legislature might approve the package and send it to the governor. But without changes, lawmakers predicted, Wilson would likely veto it.

“You haven’t come nearly far enough,” Assemblyman Paul Horcher (R-Whittier), who sat on the committee and had his own workers’ compensation bill, told the Democrats. He said he was “very disheartened by the entire process.”

Republicans and Democrats say the system is riddled with fraud and abuse. Employers pay among the highest premiums in the nation, while injured workers collect benefits that are among the lowest--a maximum benefit of $336 a week.

Democrats want to increase maximum weekly benefits to injured workers to $448. Republicans proposed raising them to $396. After four years, the rates under the Republican plan would rise to $516.

The money issue is only one of many differences.

A Republican bill, carried by Sen. Bill Leonard (R-Big Bear) and Horcher, would gut an entire field in the $12-billion workers’ comp industry by denying workers’ compensation reimbursement for vocational rehabilitation specialists who retrain injured workers.

Vocational rehabilitation costs are rising at 28% a year, making it the fastest growing part of the ever-inflating workers’ compensation pie. It consumes an estimated $650 million a year.

Democrats have various proposals to limit payments but stop well short of abolishing reimbursement for vocational rehabilitation.