Budget 2026 Confirms the Real Problem—and the Policy Failure

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January 14, 2026 | Sacramento, CA — MedLegalNews.com — The California 2026–27 Budget leaves no room for misdirection. The State of California has formally acknowledged that the central failure of the Subsequent Injuries Benefits Trust Fund (SIBTF) is delay—years-long delays that deny permanently disabled workers timely access to benefits they are legally owed.

The January 9, 2026 budget increases SIBTF administrative funding from $12.7 million to $36.5 million by 2030–31, tripling staffing levels for a single, explicit purpose: to eliminate backlogs and accelerate benefit delivery. This is not an abstract policy preference. It is a written admission by the state that administrative breakdown—not eligibility excess—is the crisis.

AB 1329: Reform Reintroduced Despite a Veto and Clear Budget Findings

Despite this clear budgetary finding, Assemblymember Liz Ortega reintroduced legislation in January 2026—AB 1329—aimed at “reforming” the SIBTF by revising eligibility criteria and pursuing cost reductions.

This is not new ground. A substantially similar measure was vetoed by the Governor in October 2025, signaling executive recognition that the proposed reforms failed to address the program’s actual deficiencies and risked harming disabled workers.

The veto should have settled the matter. Instead, AB 1329 represents a deliberate choice to revive a rejected framework—one that targets who qualifies for benefits rather than fixing the machinery that delivers them.

That choice is now impossible to separate from the state’s own admission: eligibility was not the problem.

A Timeline of Ignored Warnings

The record is stark:

  • Before October 2025: Disabled workers face mounting delays; advocates call for staffing and processing reform.
  • October 2025: The Governor vetoes SIBTF reform legislation that would have altered eligibility rather than fixed delays.
  • January 2026: The California Budget confirms delays as the core failure and funds staffing accordingly.
  • January 2026: Ortega reintroduces AB 1329 anyway—doubling down on eligibility-focused reform.

This is not a misunderstanding. It is a policy decision made in full knowledge of the facts.

Rhetoric Versus Record

Senator Liz Ortega, a Democrat who publicly claims to stand with the working class, has built her reform narrative around restraint and restructuring—while the state’s own budget documents point squarely to administrative neglect as the cause of harm.

In the East Bay, where SIBTF claimants are overwhelmingly working-class, disabled, and disproportionately Latino, the backlash has been swift. Advocates see a familiar pattern: reforms marketed as efficiency that land as exclusion.

The political consequences have radiated outward, sending shockwaves through California’s labor, disability-rights, and community organizations.

Policy Impact on a Protected Class

Disabled workers are a legally protected class. When legislation knowingly prioritizes eligibility tightening over timely benefit delivery—after the state has admitted delays are the problem—the result is institutional harm.

For permanently disabled workers, delay is not procedural. It is economic deprivation, medical deterioration, and loss of dignity. When lawmakers persist with reforms that predictably worsen delay, denial becomes a matter of policy, not accident.

The Accountability Question AB 1329 Cannot Answer

AB 1329 raises a question that neither its sponsors nor its rhetoric have answered:

Why reintroduce eligibility restrictions after the Governor vetoed them and the state budget confirmed delay—not access—is the crisis?

Why does reform continue to point at claimants instead of capacity?

The California budget has already spoken. The problem is delay. The solution is staffing, accountability, and urgency.

Reintroducing vetoed reforms in the face of that reality is not governance—it is defiance of the facts.

For disabled workers waiting years for benefits, delay is denial.

And denial, when repeated after warning, is a choice.

BUDGET REPORT California State Budget 2026-27 BROWNSTEIN CLIENT ALERT, JAN. 9, 2026  

Subsequent Injuries Benefits Trust Fund The budget includes $12.7 million from the Workers’ Compensation Administration Revolving Fund and 57 positions in 2026-27 for the DIR to address a growing backlog of cases within the Subsequent Injuries Benefits Trust Fund (SIBTF), increasing to $36.5 million and 177 positions by 2030-31 and ongoing. 

The SIBTF program has expanded significantly beyond its original statutory purpose, driven in part by recent court decisions that broadly interpret undefined terms in the more than 60-year-old statute. As a result, SIBTF claims and benefit costs have increased sharply, creating substantial financial and operational pressures. 

Absent programmatic changes, annual claim payments are projected to grow from $87 million in 2019-20 to $1.3 billion by 2029-30, while the employer assessment that funds the program is expected to increase from $112 million to $1.5 billion over the same period. Since 2015, annual claim submissions have risen from approximately 1,000 to more than 5,400 cases. Without reform, continued growth in claims is expected to exacerbate staffing constraints and significantly delay benefit determinations for injured workers.

For official budget documentation and workers’ compensation administration details, readers can review the California Department of Industrial Relations budget materials directly through the State of California’s legislative budget resources.

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