Despite the recent passage of legislation to reform California.s workers. compensation system, skyrocketing system costs remain a major obstacle to job creation and economic growth in the state. California Insurance Commissioner John Garamendi, a Democrat, and Gov. Arnold Schwarzenegger, a Republican, have each released reform plans. The governor convened a special session of the state Legislature on November 18 to address the workers. comp crisis, and legislation has been introduced modeled after the governor.s plan.

Clearly, both political parties recognize the gravity of the problem. But what steps should be taken next? This paper provides recommendations in five key areas for immediate, effective, and common sense reform of the workers. compensation system.