LXXXVII Wall Street on the Delta

By: Publius

Accountability has become a new catchphrase along the Potomac as Congress plans to spend more than $1 trillion to resuscitate our flagging economy. The Bush administration’s inability to adequately account for expenditures of hundreds of billions of dollars in funds from the Troubled Assets Relief Program (TARP) brought a chorus of indignation from Congressional leaders, although one can legitimately question why, if they were the ones to make the funds available, they did not require clearer standards of accountability themselves. But accountability, and with it transparency, should not be limited to federal government. You know where this is going. But how will we get there?

Over the past several years, California employers – public and private – have assumed an increasingly large, and now exclusive, burden of funding workers’ comp and workplace safety programs of the Department of Industrial Relations. This includes the Workers’ Compensation Administration Revolving Fund, the Subsequent Injuries Benefits Trust Fund, the Uninsured Employers Benefits Trust Fund, and now the Occupational Safety and Health Fund.

The BIG business community agreed to some of this, though not without reservations. But some of the inciting incidents leading to where we are today were hotly contested. These include millions of dollars spent on EAMS and the “loan” in 2007 to Cal-OSHA from the Revolving Fund prior to it becoming 100% user-funded last year.

In addition, employers are chafing a bit over the lack of input in the expenditure of funds from the Workers’ Compensation Fraud Account within the Insurance Fund.

Consequently, it should come as no surprise that employers are looking to the Legislature to create an oversight body where employers could have input on assessments and use of those funds. Nor should it come as a surprise that this concept will be dead on arrival in Sacramento.

It is one thing to demand accountability and transparency of private institutions that spend public dollars, but quite another when private dollars are spent by public institutions. What is ironic about this is that even though public employers are assessed for these funds, meaning that public money is used to fund public programs, these local agencies have the same lack of input as do private employers of all makes and sizes.

Having a politically appointed body oversee raising and spending millions of dollars to support these programs may not be the best idea. The Legislature has to date not shown an ability to appoint people of merit to such positions, and having yet another port in the storm for unemployed legislators does not elevate the issue to its highest plane. Nevertheless, the basic point has significant merit.

Somewhere between the current mushroom-like situation and giving employers complete veto power over policy decisions of these agencies is a point where a true dialogue on direction and funding of these programs can be held in an open forum. But ultimately, the issue will arise as to consequences when the bank – in this case, the employer community – says, “No.” Unlike in the private sector, the money will be raised and spent anyway.

A change in the nomination and appointment process of the Commission on Health and Safety and Workers’ Compensation, in conjunction with a change in its charge allowing it more oversight of Department expenditures, could be a way toward the accountability and transparency sought by the assessed community. But as long as the appointment process is in the hands of the Legislature, relief will be a long time coming.




PUBLISHERS' NOTE: Publius is written by a consortium of writers, sometimes internal, most frequently external. Workers' Comp Executive believes that it has the responsibility to air most viewpoints and welcomes the comments of its community on any subject. Publius does not necessarily represent the views of this publication.