SAN JOSE, Calif.--(BUSINESS WIRE)--Aug. 25, 2005-- Employers Join Governor Schwarzenegger to Highlight Declining Costs, Tell Their Stories of How Reforms Have Helped Them Survive and Thrive

Two years after nearly closing its doors because of exploding workers' compensation costs, a San Jose sheet metal manufacturer and its 80 employees today celebrated the dramatic reforms which have enabled them to remain in business, retain jobs and produce a profit.

Warren Hellman, co-chairman of the California Commission for Jobs and Economic Growth toured the Acosta Sheet Metal Manufacturing plant with Governor Arnold Schwarzenegger and company owner Sal Acosta as part of an event to highlight the success of workers' compensation reforms.

Hellman praised the fortitude of small business owners like Mr. Acosta, who started the family-owned business out of a garage 33 years ago, and applauded Governor Schwarzenegger for making good on his promise to fix the workers' compensation system.

"The reforms that Governor Schwarzenegger enacted last year with the help of the state Legislature are producing tangible results for California's employers and economy," Hellman said. "Because of the reforms, companies like Acosta's have been able to continue operating and participating in California's sustained economic recovery."

Since the reforms were enacted, workers' compensation premiums have dropped a precipitous 27 percent, according to recent state Department of Insurance figures which track rates filed by insurers. During that time, California has added nearly 390,000 new jobs. And rates are expected to go even lower in coming months. State insurance officials have recommended reductions of almost 37 percent.

Acosta's workers' compensation costs had ballooned to $457,000 in 2004 before the company decided to check the market for more competitive rates. With the passage of last year's reforms, California has seen an increase in the number of insurers offering workers' compensation coverage.

That has created more competition, which has helped drive down rates. After getting bids, Acosta switched from the State Compensation Insurance Fund to a new private insurer and reduced its costs by 40 percent. Its pure premiums dropped 27 percent.

"Helping employers reduce their cost of doing business is good business for California," said Mark Mosher, executive director of the Commission. "Small businesses are the backbone of California's employers and removing obstacles to their success means California's economy will flourish."

Two other employers joined Hellman and Governor Schwarzenegger in telling the story of workers' compensation reform, including:

-- Columbia Cosmetics, a San Leandro company that manufactures, markets and packages a wide variety of specialty cosmetic products. Founded by Rachel Rendel, the company employs 80 workers. Columbia's workers' compensation costs rose to $157,000 last year. Under the reforms, Columbia's workers' compensation costs dropped $30,000 this year, a 19 percent decline.

-- Pacific Autism Center, a Sunnyvale non-profit organization that provides education, job training and health services to people with autism. Interim Executive Director Kurt Ohlfs said PACE's workers' compensation costs had climbed to $364,000 in 2004, a jump of 158 percent. With the reforms, PACE has been able to bring its costs down to $260,000, a figure that the organization's insurance provider said could go even lower.

Columbia and Pacific are among a growing number of employers in the Bay Area and across the state that are telling similar stories. Pacific Paper Tube Co. in Oakland says its 2005 workers' compensation premiums dropped 19 percent from 2004 and Merrill's Packaging in Burlingame reduced its overall costs $100,000 from 2004 to 2005. Arborguard, a Castro Valley tree planting and maintenance service, has reduced its premiums 15 percent in recent months.

"The stories are good," Hellman said. "And they provide ample evidence that we must continue to remove the obstacles, including unnecessary costs and excessive regulation, that are holding back California employers from growing their businesses and creating more jobs."

The California Commission for Jobs and Economic Growth is an independent, member-supported non-profit organization that works to create and retain jobs in California and promote economic development and market the state nationally and internationally. Visit the Commission Web site at www.4cajobs.com.

CONTACT: California Commission for Jobs and Economic Growth Mark Mosher, 415-812-7500
KEYWORD: CALIFORNIA
INDUSTRY KEYWORD: LEGAL/LAW GOVERNMENT HUMAN RESOURCES PRODUCT
SOURCE: California Commission for Jobs and Economic Growth