Lights, Cameras but Slow Action on Workers’ Comp

I was thinking of “Mr. Smith Goes To Washington” as I was having lunch with a group of San Fernando Valley business leaders on Monday.

The 1939 film classic embodied the deep American desire to descend on the capital, wade into the dirty politicians and run them out of town.

Jimmy Stewart, playing a young senator, risked his career to expose powerful crooks and fight for a government that would do “a little looking out for the other fella.” Ever since the movie opened, America has been looking for Mr. Smith.

My luncheon hosts, the board of directors of the Valley Industry and Commerce Assn., have been no more successful than the rest of us in finding him. So the VICA members are making plans to fly to the capital in Sacramento and administer their own punishment.

They want to reform the system that compensates workers for job-caused injuries and illnesses. Workers’ comp, once praised as a pioneering effort to protect employees, is under fire for its high cost to employers, low benefits for workers and abuses by doctors, lawyers, therapists and insurance companies.

Their luncheon could have been an employers’ meeting anywhere in California. Workers’ comp reform is to business what Proposition 13 once was to homeowners. Just as that 1978 ballot proposition represented property owners’ anger about taxes, workers’ comp has become a symbol of state government regulatory excess in areas ranging from smog control to workplace safety. “We need to send a message to all employers that California is not an enemy,” said VICA board member Marvin Selter, who is working on the reform effort.

As the directors discussed the issue, there was strong sentiment in the room for action now. “We are seriously considering getting out of California,” said incoming President Walter Mosher, whose northeast Valley company makes the identification bracelets they give you at the hospital. “We can save $1 million a year with lower workers’ comp and health costs” by moving.

Some of them were impatient with plans to have the board vote on a position next month. What if their voices weren’t heard? What if the train left the station while they were still on the platform?

They need not worry. I’d been in Sacramento the week before and found out that reform is a few months away.

Prospects are better than last year, when Democratic Assembly Speaker Willie Brown Jr., who supports the lawyers’ side in the fight, killed the reform proposals put forth by Republican Gov. Pete Wilson. Wilson is sympathetic to the attorneys’ enemies, the insurance companies.

A notable good sign for reformers is the report of the Assembly Democratic Prosperity Team, headed by Speaker Brown’s ally, Assemblyman John Vasconcellos (D-Santa Clara). After holding more than 30 hearings around the state, Vasconcellos’ committee identified workers’ comp as “the prime irritant for businesses in our state.”

Another sign of improved reform prospects is the attitude of the president of the Senate, David Roberti. He became a strong reformer when he moved from central Los Angeles to a new district in the San Fernando Valley last year after reapportionment shifted legislative boundaries.

“In the San Fernando Valley, workers’ comp is an issue of major proportions,” Roberti told me. “My district is very middle class, very working class and very small business.”

Roberti has formed a citizens task force, including VICA members, to prepare reform legislation. VICA member Selter, a member of the task force, said it favors new limits on workers’ comp for stress-related disabilities, setting “a new and higher threshold” for payment of psychiatric claims.

Roberti has given the job of handling reform in the Senate to a respected lieutenant, Pat Johnston of Stockton. That impressed Wilson Administration officials. But they said they’re withholding judgment on Roberti’s commitment to reform. They want to see the makeup of the Senate committee that will vote on reform proposals.

In the Assembly, there’s no telling how Speaker Brown’s dislike of Wilson, and his sympathy for the lawyers’ lobby, will affect reform. By the same token, nobody knows whether Wilson’s bad relations with Brown, and his friendship with the insurance companies, will impact his moves. Both the lawyers and the insurance companies dumped huge amounts of money in last fall’s legislative elections to strengthen themselves for the battle.

This isn’t as simple as a movie. Not even Mr. Smith could get the California Legislature to hurry on an issue as hot as workers’ comp.