Budget Nonsense and How Californian's Are Cheated

This morning's WorkCompCentral News (stories on budgetary issues, fraud, funding) hit several of my nerves on a repeating theme that has raised my ire now for several years - constrictions or attacks on agencies that are not connected to the General Fund for state budgetary purposes.

I speak specifically of California's Division of Workers' Compensation (DWC) and its "user fee" or "100% funding".

SB 228 (Alarcon) was signed in to law on Sept. 28, 2003, by Gov. Gray Davis and became effective Jan. 1, 2004. The key statute is Labor Code section 62.5, which is the section that established the Workers' Compensation Administration Revolving Fund. It is a "special account" in the state Treasury and is completely separate and apart from the General Fund. 

Prior to 2004 the DWC was funded 70% through the General Fund and 30% through employer policy assessments. SB 228 changed that to 100% funding through policy assessments.

In other words, DWC is not, has not, and should not, be a part of any budgetary discussion involving the General Fund. It is a special animal and regulations (read budget) concerning the fund don't even have to go through the Office of Administrative Law before being foisted upon employers.

The reason for the change, it was argued back in 2003, was because employers of the state deserved to have consistency, reliability and dependability on a state agency so critical to employment operations - and realistically the extra 70% on employer policies did not impose that much of a burden on any single employer. 

The employer community was mad at the time, but accepted the tax increase on the basis that they would get value in return - dedicated operations to make workers' compensation go smoothly so that injured workers' disputes could be resolved more quickly, return to work faster and thereby reduce negative X-mod consequences.

Yet, now in budgetary tough times DWC is being subject to restrictions the same as the rest of the state.

Employers don't seem to care, or are just apathetic that their special purpose money is being squandered in the name of politics. Has anyone seen any editorial in a major newspaper or business publication decrying the fraud being perpetrated upon California business by their own lawmakers? No. Has any politician been taken to task for cheating the business community (employers and workers) out of their money? No.

But we sure hear a lot about employee fraud, provider fraud, and yes, employer fraud - though politicians continue to defraud employers with impunity, continue to destroy the economy of the state by ensuring that state operations that have no bearing on the state's budget are hamstrung so that workers claims are delayed beyond reason and business' expenses expand without accountability.

I think about all of the issues we debate in the workers' compensation community, but honestly, the arguments about medical, indemnity, return-to-work , etc. are infantile. These issues are meaningless compared to the big picture: workers' compensation is the bastard step child of politics. We let politicians manipulate us, twist us, steal from us, with no consequences. 

Write your legislator and tell them to leave DWC funding alone - it's not part of the General Fund budget and should not be part of the debate. 

Don't blame "fraud" on your increased premiums unless you're going to blame the State.