"The state continues to face a fiscal scenario in which the number of people requiring tax-supported services keep growing, but revenues continue to lag," Director Lloyd W. Aubry Jr. said. "As a result, funding is tight and priorities must be set. The Governor considers DIR and our initiatives a priority."

The Governor proposes $213.7 million for DIR in the next fiscal year, compared with $193.5 million in the current year. The following offers a breakdown of the budget's impact on several divisions/program units:

• Division of Workers' Compensation. The staffing level will increase by 116.5 positions this fiscal year and 183 positions next year. Most of the new positions are required to implement workers' compensation reform, and include 24 new referee positions.
• Managed Care Unit. Workers' compensation reform legislation allows injured workers to receive treatment from managed care organizations. The budget proposes 27 positions for this unit.
• Self Insurance Plans. The budget adds 10 positions to this unit. The workers' compensation reform legislation allows employers to join together and self insure their workers' compensation liability as a group.
• Industrial Medical Council. The IMC has several new responsibilities, and will add 9.5 positions to meet them. The IMC will administer the new competency exam for Qualified Medical Examiners (QMEs), write standards for QME reports, evaluate conflict-of-interest charges, and have expanded disciplinary authority over QMEs.
• Cal/OSHA. To staff two new units, Cal/OSHA will add 123 positions. Workers' compensation reform legislation established two new preventive programs. The Targeted Inspection program will target high hazard employers. Cal/OSHA's Loss Control Consultation Service will certify insurer's loss control plans.
• Occupational Safety and Health Appeals Board. To address the backlog of Cal/OSHA penalty appeals, eight positions will be added. The Appeals Board has experienced a 108 percent increase in appeals in the past year.
• Labor Commissioner. Because of involvement in the Task Force on the Underground Economy, the Labor Commissioner will add fourteen investigative positions with funding from the Employment Development Department.