Workmen’s Comp: Cure or chaos for California?

Nov 26, 2002 2:48 AM

   To hear Ed Halpern tell it, the soaring costs of workmen’s compensation insurance for California horsemen has reached its apex, and after more than eight months of false starts, premiums horsemen pay for such insurance coverage soon will revert to their former levels.

   Exorbitant increases began last March, when the only workmen’s comp provider for California horsemen--State Fund--more than doubled its premiums in some instances. Since the California Horse Racing Board mandates that trainers must have workmen’s comp in order to race, their backs were against the wall.

   For every $100 on a trainer’s payroll, he or she must pay a percentage of that $100 towards workmen’s comp. “It’s been as low as 12 or 14 percent,” one trainer said back in March, when it jumped as high as 40-some dollars, increasing trainers’ costs $300 to $400 per horse. And that did not include their premium for jockeys’ insurance, which climbed as high as $90 a mount, where it used to be $20.

   Enter American International Group. After several deadlines passed with no permanent resolution, AIG gave horsemen their best offer in months, according to Halpern, a trainer in his own right and the executive director of the California Thoroughbred Trainers for the past three years.

   “It’s a done deal,” Halpern said of the AIG proposal. “It hasn’t been signed because the paper work is being created, but we’ve crossed all the T’s and dotted all the I’s. Unfortunately, the rates won’t revert to as low as they were before the State Fund increase. It will get back up to where we were after the March rise and wipe out the July raises. The trainers who had big raises in July will return to the rates prior to July. We were hoping to go back to the pre-March rates, but we couldn’t get it done.

   “There’s a base rate for each (employee and jockey) and there are certain discounts depending on the size of your operation. The base rate is now $32 per $100 (of payroll) for backstretch help, and about $72 per jockey mount. State Fund’s fees were $105 for jockeys and $49 for backstretch workers, so it’s a big difference. But possibly the major difference is that State Fund is going to keep going up. It has to, because benefits are going up. We think AIG rates are going to go down.”

   Horsemen, however, have taken a wait-and-see approach.

   “I think a lot of them are skeptical, to tell you the truth,” Halpern said. “They’ve been messed around so long, and seen so much go wrong, especially with insurance over the years, that they’re doubtful. But I’m hopeful. I think this is going to work.”

   If it doesn’t, expect an exodus of California horsemen to greener pastures. One, Scott Hansen, already plans to move his base of operation to Louisiana, taking more than a dozen horses with him. Others may soon follow.

   “Under this new (AIG) plan, my rates went from $2,000 a month to $7,000 a month since March,” said trainer Christopher Paasch. “And I’ve had no accidents or claims for four years.”

   Paasch, 46, a native of Rochester, N.Y., said current rates would necessitate raising his “day rates” (the cost a trainer charges an owner per horse, per day) by “another seven or eight dollars a day, and I can’t see going to my owners and asking for that kind of increase. You have to be very fearful for our business in California right now. It’s scary. You can’t expect owners to keep footing the bill.”

   Paasch said premiums are not nearly as high in other racing states as they are in California.

   “In New York, Bobby Frankel pays in one year what it costs him for one month in California,” Paasch said.

   THE HOMESTRETCH: Whywhywhy, a disappointing 10th as the 5-2 favorite in the Breeders’ Cup Juvenile, beaten some 17 lengths, should rebound as a 3-year-old, according to his trainer, Patrick Biancone. “He had a long season and we’re giving him a break, but he should be ready to run about January,” Biancone said of the son of Mr. Greeley, who put together victories in the Flash Stakes, the Sanford Stakes and the Belmont Futurity before flopping at Arlington Park. “We haven’t finalized any plans yet (as to whether Whywhywhy will take the California route to the Triple Crown). I guess Zavata (a $575,000 son of Phone Trick, who was pulled up on the far turn in the Juvenile) will stay in California, but he’ll be sprinting, and Whywhywhy will run longer, so they won’t be walking on each other.” As to Whywhywhy’s dull performance in the Juvenile, Biancone said: “I made too many mistakes. First, I gambled and went (to Chicago) too early, and it was a bad idea because it was too cold. Plus, it was a long season for him, because he began racing in May and I hadn’t run him two turns before the Juvenile, so maybe it was all too much for him. I’m still going through a learning process. I made a few mistakes, but we’ll be better next year.” . . . Universal Pictures is sparing no expense in making “Seabiscuit: An American Legend” authentic to the last detail. Currently in production at Santa Anita, the track’s electric tote board which displays odds and jockey changes has been replaced with a manual board, and the 50-star American flag has been substituted with one bearing 48 stars, representing the number of states during the Seabiscuit era of the late 1930s. No wonder movie tickets cost nearly 10 bucks.