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SACRAMENTO – Gov. Gray Davis has vetoed increases for injured and unemployed workers despite complaints that California’s benefits are among the nation’s lowest. 

Davis said Friday that a bill that would have boosted benefits for workers injured on the job would have been too costly for employers. A measure raising unemployment benefits might bankrupt the state’s unemployment insurance fund, he contended. 

“Bills intended to assist workers — a goal I embrace — must not at the same time overburden businesses, which must succeed in order to provide jobs for those workers,” Davis said. 

Art Pulaski, executive secretary-treasurer of the California Labor Federation, said the unemployment fund “has plenty of surplus and could go two years” without an increase in the amounts employers pay into it. 

And Marc Marcus, president of the California Applicants’ Attorneys Association, said the veto of the injured worker bill showed the governor was “out of touch with the financial ruin workers and their families endure following a workplace injury.” 

California ranks 49th among states in its level of benefits for most injured workers; 41 states have higher unemployment benefits. 

One of the vetoed bills, by Sen. Patrick Johnston, D-Stockton, would have raised maximum benefits for workers temporarily off work due to job-related injury from $490 to $651 a week in three annual steps starting next January. 

Beginning Jan. 1, 2003, the maximum weekly benefit would have been $651 or one and a half times California’s average weekly wage, whichever was greater. 

The bill also would have boosted benefits for permanent disabilities and for the survivors of workers killed on the job. 

Davis, who vetoed a similar measure last year, said benefits need to be increased, but he contended Johnston’s bill, when fully implemented, would have have boosted employer costs $2.6 billion a year without making enough cost-saving changes in the system. 

“I intend to sign a bill that incorporates reasonable benefit increases and additional system reforms to ensure that California’s system of workers’ compensation operates in a fair and cost-efficient manner,” he said in his veto message. 

But Marcus’ organization, which is made up of attorneys who represent injured workers, said the bill would have boosted employer costs only $1.5 billion a year when fully implemented. 

Marcus said if Davis is waiting for a compromise between groups representing workers and employers before signing a benefit increase “it’s never going to happen.” 

He said his group is considering trying to put a measure on the ballot raising benefits. 

The other bill, by Sen. Hilda Solis, D-El Monte, would have raised maximum weekly unemployment benefits to $300 or half the previous year’s average weekly wage, whichever was greater, starting next January. Currently the maximum payment is $230 a week. 

Davis said the increases would cost the unemployment fund $1.7 billion over the next three fiscal years and put the fund’s solvency at risk unless there was an increase in employer assessments. 

He also suggested that the fact that “California is experiencing the lowest unemployment rate in decades” was another reason for vetoing the bill. 

Pulaski said actual jobless figure may be greater than the 5 percent cited by state officials. 

“According to the state Employment Development Department, there are some 830,000 people who are unemployed,” he said. “The University of California says it could be up to 3 million based on the uncounted. Many of those people, if not most of those people are looking for work.”