SIBTF in the California State Budget

For several years, the Subsequent Injuries Benefits Trust Fund (SIBTF) has been a leading cost driver of employer assessments, creating significant controversy and budgetary pressures.  Last year, there were rumors of a comprehensive reform of the SIBTF, but this did not come to pass.  However, in his 2025 veto message of Assembly Bill 1329, Governor Newsom stated that he could not sign the bill because it did not “contain the comprehensive reforms necessary to save SIBTF” and directed the Department of Industrial relations and Division of Workers’ Compensation to develop a comprehensive reform of the SIBTF for the January 2026-27 budget. 

As promised, Governor Newsom has called for a comprehensive reform of the SIBTF in his January 2026-27 budget.  While specific legislative language was not included in the budget, the budget summary did note that the SIBTF program “has expanded significantly beyond its original purpose due in part to recent court decisions that have expansively interpreted undefined terms in the 60-year-old statute” and that, without changes, the program costs will rise from $87 million in 2019-20 to $1.3 billion in 2029-30.  CWCI staff will continue to monitor for any proposed legislative changes to the SIBTF program in the 2026-27 State Budget, and we will communicate those changes should they become law.

GLB/