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Vocational Schools Could Feel the Pinch

Legislature's attempt to contain workers' comp costs in state would end retraining program.

September 12, 2003|Ronald D. White and Karen Robinson-Jacobs | Times Staff Writers

It was a somber graduation day at Computer Career Connection on Thursday.

Rather than celebrating, staff and students at the West Covina vocational school fretted over a state bill to slash workers' compensation costs.

The bill, which is expected to pass both chambers of the Legislature and be signed by Gov. Gray Davis today, proposes to save $1.2 billion in workers' comp costs by repealing a program that gives injured workers up to $16,000 each for counseling, retraining and living expenses.

The measure could affect hundreds of vocational schools in the state, but some like Computer Career Connection figure to be hit disproportionately hard. The school, which also has a campus in Colton, relies on the workers' comp program for half of its enrollment.

"There is a very distinct possibility of having to shrink down to one campus," co-founder Mary Gilmore said on Thursday. A day earlier, when Gilmore learned that lawmakers had agreed on a workers' comp reform package aiming to cut $5 billion to $6 billion in total costs, she warned her staff about the possibility of layoffs and the need to shut down courses.

"It's scary," she said. "I did not sleep very well last night."

In trying to reform the workers' comp program, legislators focused mainly on medical costs, hoping to garner much of the projected savings by capping fees paid for some services and limiting injured workers' usage of others. But few groups were whacked harder than the vocational rehabilitation industry.

Although some say the savings from cutting this program wouldn't amount to anywhere near $1.2 billion, those in the retraining industry say the effects would nonetheless be dramatic.

Instead of receiving up to $16,000 in counseling, retraining and living expenses, the proposal would instead give workers a voucher based on the severity of injuries. A worker classified as being less than 15% permanently disabled, for example, would get a $4,000 voucher for tuition for vocational training; a worker found to be more than 50% permanently disabled would receive a voucher for $10,000. As much as $4,000 to $5,000 of living expenses, in the form of a stipend, would be cut outright.

Additionally, payments to vocational rehabilitation counselors would be reduced from the current average of $2,900 per client to no more than 10% of the voucher amount -- or $400 for less severely hurt workers to a maximum of $1,000. These counselors serve as the industry's main referral arm, guiding injured workers to individual schools.

Robert Johnson, executive director of the California Assn. of Private Post-Secondary Schools, said that he thinks as many as 900 vocational schools in the state may be affected and that some of them may have to close. For students on workers' comp, he said, the average reimbursement to schools has been $6,000. A voucher level of only $4,000, therefore, threatens to shrink the number of students or force the schools to lower their tuition.

"If you have someone with a $4,000 voucher who needs more training, what do you do?" asked Johnson.

He said small schools would be most hurt by the changes, particularly those with fewer than 100 students. "Within our sector, there's been kind of a boutique group of schools that have grown up to almost exclusively work with injured workers," Johnson said. "Proportionately, we're going to take a tremendous hit."

The Computer Career Connection has about 225 students. Its two campuses gross about $4.5 million a year and employ 45 workers.

Gilmore, who runs the 5-year-old business with her brothers Tom and John, said she feels as if she is about to be punished for the school's success in course completion (a rate of 99%) and job placement (74%).

"The more successful schools get more referrals because the counselors want these people to succeed," Gilmore said, adding that tuition at her school averages about $5,000. "It's not like we put up a sign out front that reads 'Injured workers enroll here.' "

Gilmore said that she takes particular care with her students because of her own experience as an unemployed and suddenly divorced wife at the age of 40.

"I remember I felt hopeless," she said. "I didn't know where to turn. I was twice as old and twice as slow as everyone else. It's the same thing for my students."

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