This time legislators want to remove $4.3M from the Uninsured Employers Trust Fund (UETF) and "loan" it for the creation of a new agency that has nothing to do with workers' compensation, the State Public Works Enforcement Fund, with no schedule for repayment.
For those of you who are not familiar with the financing of the California work comp system - the Division of Workers' Compensation (DWC) and the UETF are funded SOLELY from employer assessments on work comp insurance policies. This money does not go into the General Fund and is supposed to be untouchable, used only for the purpose of operating the state's work comp system.
This past couple of years, even though DWC is supposed to be independent of government finances because it is specially and separately funded by said assessments, it was subject to the same budgetary constraints as all other state agencies funded by the General Fund for political reasons only - the Administration did not want to have one agency fully funded while all other agencies deal with austerity budgeting because it would send a 'bad message' to the other agencies.
Thus DWC could not hire people, could not replace outgoing staffers, could not upgrade equipment, purchase new supplies, etc., even though the money was "in the bank".
The government has never told us where all the money is since its not being used to fund normal DWC operations.
Now the government wants to loan itself money from a fund that is supposed to be off limits to the rest of government so it can fund the start up of another, new, state agency.
I'm calling BS!
Last year, because of our state's inability to set a budget, the UETF almost didn't make its payments to injured workers whose employers cheated the system and decided to operate with out work comp insurance.
Those of us who are responsible, law abiding, employers get penalized for the bad acts of others. Maybe they will get caught, but likely not as it is ridiculously easy to skirt the laws and operate a small business on the slight.
Worse, the government not only would cheat the law abiding employers of the state, but its actions contribute to the bad economy by strangling an agency whose greater goal is economic stability and its function is to make sure that people get back into production mode as soon as possible following a work injury - causing greater expense to business due to indirect costs of replacement labor, etc., and decreasing gross margins due to lower production levels.
I've opined before and I'll say it again - the California legislature needs to keep its hands off employer assessment money, and needs to stay out of the way of workers compensation operations!
AB 436 is on the agenda for a vote in the Senate and, if approved, will go back to the Assembly for a vote.
If you are concerned about California workers' compensation I urge you to write to your legislator and ask them to vote 'NO' on AB 436.