Capitol Punishment: Make Legislators Resolve Issues GUEST COLUMN by Gregory N. Lippe Congratulations to our governor and the people of California for accomplishing the passage of Propositions 57 and 58, two of the most significant propositions in the history of our state. As I sit here wearing my T-shirt with the logo “57YES58” I am reminded of the enthusiasm demonstrated at the rally I participated in at Universal CityWalk on February 27. That day, I witnessed a tremendous example of democracy at work and the accomplishments that can be achieved when people forget about partisanship and work together for the common good. Participants included Gov. Schwarzenegger (Republican), State Controller Steve Westley (Democrat), former Mayor of Los Angeles Richard Riordan (Republican), Speaker of the Assembly Fabian Nunez (Democrat), Assemblymember Keith Richman (Republican), a number of other elected officials of both parties, numerous unions, business organizations and other supporters. It was a terrific event that helped significantly to achieve a great result. Now that we have seen the positive results of people working together, it is very disappointing to see the current gridlock in the California legislature over the reform of our tremendously broken system of workers’ compensation, a system that continues to create budget deficits in our local governments and is forcing companies out of business and out of California, resulting in many lost jobs. Gov. Schwarzenegger warned the legislators that, if they cannot achieve meaningful workers’ compensation reform by March 31, he will utilize the initiative process to enable the voters to decide on reform in November. March 31 is the deadline (unless extended) for placing an initiative on the ballot. Recently, Los Angeles Councilmembers Wendy Greuel and Dennis Zine introduced a motion into the council calling for reform of the system and setting forth a seven-point plan that they believe can break the current gridlock. They issued a call to the legislature and the governor to work day and night to solve the problem. Zine added: “If Sacramento doesn’t do something, the people of California will do something.” He was referring to the proposed initiative. The legislature may or may not achieve the greatly needed reform by March 31 (the governor was pushing for the framework of a bill to be worked out by March 26). If they are successful, we will all win. If they are not, unlike the successes achieved with Propositions 57 and 58, the proposed solution of a ballot initiative for workers’ compensation could easily result in virtual suicide for reform and a serious negative impact to all residents of California. Taking legislation to the people, whether by referendum or initiative, is not a “one size fits all” solution. Propositions 57 and 58 were relatively short, to the point and easy to understand. Unfortunately so many facets of the workers’ compensation system are broken that there is no way to present the issues in a simplified format. Voters, who are not experts in workers’ compensation or have not been significantly involved in working with the highly complex issues, will have an extremely difficult time understanding the initiative. As a co-chair of VICA’s Committee on Workers’ Compensation Reform, I am familiar with the issues of causation, apportionment, medical treatment controls, “Section 5814” penalties, objective and subjective determinations of partial and total permanent disability, rate regulation, fee schedules, anti-fraud measures etc., etc. It is no wonder that during the last legislative session, a total of 65 separate bills were introduced in an attempt to reform workers’ compensation. How can we expect voters who are unfamiliar with these issues to make an informed vote? Most voters will not vote for an initiative that they don’t understand. Therefore it is highly likely that the measure would fail. Not only would this be devastating for California, it would also reward those in the legislature that truly don’t want reform and absolve them of the responsibility. Once the people turn down reform, the legislators can say “it is the will of the people.” It is unfair and unconscionable for our legislators to push the responsibility for solving complex problems of the magnitude of workers’ compensation reform onto the electorate. These legislators should not be given an easy way out now or in the future by allowing them to shirk their responsibilities and pass the buck to the initiative process. Side bar: I recently received a copy of the petition for the workers’ compensation reform initiative and found it to be lengthy, complex and unable to be read without a magnifying glass. I have chosen the following anti-job/anti-business bill to profile this month: AB 1541: This bill, authored by Assemblymember Cindy Montanez, classifies a failure to file paperwork on time as a “serious violation” equivalent to dumping unauthorized levels of pollutants into bodies of water. Companies that hold NPDES (National Pollutant Discharge Elimination System) permits and comply with the numeric requirements for discharge, but are unable to file their required monitoring report in time, will be penalized the same as if they exceeded their authorized discharge levels. This penalty for tardy paperwork is $3,000 for each 30-day period a report is not submitted as required. The result will be increased costs to businesses, increased costs to consumers and potential reduction in jobs. Status: Passed Assembly and Senate, approved by Gov. Davis Sept. 29, 2003. Valley legislators voting for bill: Assembly, Frommer, Koretz, Levine, Montanez, Pavley; Senate, Alarcon, Kuehl. Valley legislators voting against bill: Assembly, Richman, Strickland; Senate, Knight, McClintock. Gregory N. Lippe, CPA, is managing partner of the Woodland Hills-based CPA firm of Lever, Lippe, Hellie & Russell LLP (LLHR) and a director of the Valley Industry and Commerce Association (VICA).
