The California Furniture manufacturers Association (CFMA) has endorsed a ballot initiative by the Committee for Workers' Compensation Reform intended to limit workers comp claims. Chief among the proposed changes, the initiative would require the employee to prove an injury occurred at work by a preponderance of the evidence. It will also require that all workers' compensation laws be interpreted in an impartial and balanced manner so that the employee and the employer will be considered equal before the law.

Citing potential cost savings to state and local governments of several hundred millions of dollars, system- wide savings in the billions and increased business profits that could significantly boost state revenues, California's respected non-partisan Legislative Analyst's Office (LAO) recently released its review of the Committee for Workers' Compensation Reform and Accountability's initiative to reform the state's notoriously broken workers' comp system.

"The LAO confirmed what we've known all along. California's public and private sectors are being crippled by the exorbitant costs of a broken workers' comp system. This initiative contains the major components we need to fix workers' comp and reign in out of control costs that are undermining the state's economic recovery," said initiative proponent Joel Fox, president of the Small Business Action Committee (SBAC).

Due to begin circulating petitions for signatures on March 3rd, the Committee for Workers' Compensation Reform and Accountability applauded the LAO's report, specifically highlighting the following fiscal effects:

Impact on System Costs Workers' compensation costs for private and public sector employers have risen dramatically in recent years and are expected to be roughly $25 billion in 2004. The provisions in the proposal
-especially the equal application of law standard, the limitations on medical treatment, and the higher standards for showing injuries are related to work
-would likely result in a net reduction in the cost of workers' compensation claims and/or the number of claims. The magnitude likely would be major
-potentially in the range of a few billion dollars annually.

State and Local Government Costs for Workers' Compensation The state and local governments currently spend approximately $4 billion annually in workers' compensation costs for their own employees. State and local governments would experience proportionate claims savings relative to the overall system. These savings would potentially total in the hundreds of millions of dollars annually.

Impact on Revenues The impact on governmental revenues would depend on how the measure affected system costs. Workers' compensation savings would improve business profitability thereby increasing income tax revenues. Partially offsetting this gain would be a reduction in the gross premiums tax paid by insurance companies. The net effect of these impacts is not possible to estimate.

The LAO's report on the initiative, its key provisions and fiscal effect are required by law and are printed in the state's voter information guide (ballot pamphlet) and are a part of the initiative's ballot label. A copy of the LAO's complete report is available on line at www.reformworkerscomp.com or directly at www.lao.ca.gov . The initiative's title and summary are currently being prepared by the Office of the Attorney General and the measure is expected to be cleared to begin circulation for petition signatures on March 3, 2004. Complete text of the initiative is also available at www.reformworkerscomp.com

The Committee for Workers' Compensation Reform and Accountability also announced today that its initiative received the California Republican Party's endorsement this weekend at their spring convention. In addition to the California Furniture manufacturers Association, the initiative has received the endorsement of the following organizations and individuals:

-Bakersfield City Council
-Building Industry Association of Kern County
-California Associated Builders and Contractors, Inc.
-California Furniture Manufacturers Association
-California Republican Party
-California Service Station and Automotive Repair Association
-Tom Haggerman, Independent Business Coalition
-Stan Harper, chairman, Kern County Grand Jury Association
-Independent Oil Producers Agency
-The Industrial Medical Group
-Ed Jagels, Kern County District Attorney
-Korean Dry Cleaners-Laundry Association
-Dan Lyons, Lyons Staffing, Ventura
-Metal Finishers Association of Southern California
-Metal Heat Treaters Association
-Mike Maggard, Bakersfield City Councilman
-Printing Industries of California
-Don Rogers, former State Senator (responsible for eliminating state inheritance and gift tax)
-Mary K. Shell, Former Mayor of Bakersfield
-Robert Smith, owner, Risk Solutions and Analysis
-Southern California Rock Products Association
-Specialty Graphics Association International
-Mack Wimbish, Kern County Sheriff