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Bill Seeking to Expand Death Benefits for Firefighters Goes to Governor for Third Time

Other Employee Benefit Bills Moving through Legislature Would Also Burden Financially Strained Cities

May 6, 2014
Will the third time be the charm or strike three for a bill that would dramatically increase local government workers’ compensation costs?
AB 1035 by Speaker John Pérez extends the statute of limitations from 240 to 420 weeks for presumptive death benefit claims for cancer, tuberculosis or MRSA on behalf of a firefighter or peace officer. The bill went to Gov. Jerry Brown on May 1 and he has 12 days from that date to make his decision.

Local agencies opposing this measure clearly support eliminating hardships and maintaining reasonable income levels for surviving dependents of public safety officers, but this measure goes too far in nearly doubling the statute of limitations for which death benefit claims can be filed. 
If AB 1035 becomes law it could create major financial liabilities for public agencies that employ firefighters and peace officers. Workers’ compensation costs come directly out of the general fund of local agencies. Local agencies set aside funds to pay for workers’ compensation claims like any other employer and have not anticipated this expanded new liability. The resulting need to augment claim reserves could result in the diversion of funds away from other priorities.
Sponsored by the California Professional Firefighters, AB 1035 is essentially a re-introduction of the Speaker’s AB 1373 from last year and AB 2451 from 2012, both of which the Governor vetoed. His previous two veto messages focused on the fact that the bills were not backed by research showing a need for this expansion of benefits. The League’s concern with this bill centers on the fact that a reasonable death benefits already exist for public safety officers and this bill would jeopardize already financially strained cities.
This year the bill moved very fast, which is different from the previous two years where it did not go to the Governor until late in the session. Until March 27, Assembly Member Al Muratsuchi (D-Torrance) authored AB 1035 and it related to local agency financial reports. The bill was then gutted in the Senate to include the latest version of the death benefits bill. By using a bill that was already in the Senate the issue essentially skipped policy and potential appropriations hearings in the Assembly.  
Shortly after coming into print, on April 9, just prior to the Legislature’s spring recess, the Senate Labor and Industrial Relations Committee held a brief one-bill hearing where it reviewed and passed (4-0) AB 1035. Despite the bill’s potential fiscal impacts — because the fiscal impact of these benefit expansions are the key concern with the bill — it went to the Senate Floor without going to the Senate Appropriations Committee. However, after the Senate Republican Caucus objected, the bill was ultimately re-referred to the Senate Appropriations Committee to review its potential fiscal impacts.  
The Senate Appropriations Committee took up the bill the day the Legislature returned from recess (April 21). The committee analysis detailed potential costs to the state and local governments and reported that the measure had sufficient costs to qualify for placement on the committee suspense file. 
Committee Vice Chair Sen. Mimi Walters (R- Laguna Niguel) questioned the bill’s process. Specifically, she asked why the bill was being heard that day and not with all other suspense candidate bills in the coming weeks. Senate Appropriations Chair Sen. Kevin De Leon (D-Los Angeles) replied that the decision to hear the bill was a “subjective call” on his part and proceeded with the hearing. Discussion also ensued that indicated that the Governor might be prepared to sign the bill in its revised form. The measure then passed the Senate, the Assembly concurred and it went to the Governor.
It is unclear if the Governor has indicated a willingness to sign this measure, but the rapid progress of the legislation gives cause for concern. The Governor, a former mayor, is no stranger to the challenges cities have in balancing their budgets. He recently joined the League board of directors at their meeting in Sacramento and spoke candidly about the growing problem of pension and other post-employment benefit obligations. In pointing out that personnel costs for a city can equal 80 percent of its General Fund, the Governor observed that the state’s payroll costs are a much smaller percentage of its budget compared to local agencies.
If the Governor truly understands the burden local governments face and cost of providing core services for city residents he should veto the bill, AB 1035. A veto on AB 1035 is not only necessary but the only responsible decision for the long-term stability of local government budgets.
Legislature Considering a Variety of Bills that Would Burden Local Budgets
AB 1035 is not the only worker’s compensation benefit expansion bill in motion this session that would put new stress on already strained local government budgets.
  • AB 2378 (Perea) seeks to overturn relevant court cases and provide public safety personnel with up to three years of temporary workers’ compensation payment, one full year of salary “4850 time,” plus two years at two-thirds salary.
  • AB 2052 (Gonzalez) would increase the number of peace officers that are eligible for several presumptions (such as cancer, heart trouble and pneumonia) by expanding all of the current presumption laws to include all “individuals described” in several Penal Code sections dealing with peace officers.
  • SB 1234 (Block) would dramatically expand eligibility for special workers’ compensation benefits that are currently limited in law to only certain categories of peace officers. There has yet to be a true analysis of the potential costs associated with the passage of this bill and argue that a factual basis for the legislation does not exist.
Urge the Governor and Legislature to Hold Local Government Costs
The League has tremendous respect and utmost commitment to the employees who serve city residents and keep our streets safe. Cities continue, however, to face tremendous financial pressure stemming from the Great Recession and growing unfunded pension liabilities. Legislation, such as these bills, that seek to expand benefits, put California cities in a precarious position. The Governor knows firsthand about the challenges at the local level and the League hopes that this knowledge informs his decision when making a decision this week about AB 1035 and later this session on other bills.

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