07/08/2003 11:00PM

Insurance reform needs united front


INGLEWOOD, Calif. - "Misery loves company," goes the old English proverb, or, for those who like their homilies with a bit more age, "It is a consolation to the wretched to have companions in misery."

That was from Publius, a former slave who entertained Roman audiences with a combination of mime and wisecracks more than 2,000 years ago. The thing is, though, how did he know, way back then, about the California insurance crisis that was going to hit in 2003?

The misery induced by insurance premiums has reached ecumenical proportions. Last Monday, the Sacramento Bee reported the "well, duh" news that unchecked increases in workers' compensation insurance costs "are forcing California's small-business owners to fire workers, delay new equipment purchases and raise prices," according to a survey released by the California chapter of the National Federation of Independent Business.

The survey, according to the Bee, received 1,500 responses from the NFIB's California member businesses. Ninety-nine percent of them reported "dramatic insurance price increases over the past three years," while only 23 percent of the respondents had a claim filed against them by an injured employee.

The list included other business-owner nightmares such as postponing or eliminating new equipment purchases (74 percent of them), laying off employees (41 percent), cutting wages or delaying raises (86 percent) or - horror of all horrors - cutting their own pay (87 percent).

The Bee noted that small businesses are particularly hard hit by high insurance rates.

"I feel helpless when I open the insurance bill," Alzada Knickerbocker, an independent bookstore owner in Davis, Calif., told the Bee. "You have no control over it. And small businesses operate with small profits. So when you have an expense like that, and the state says you have to carry it, and it keeps going up every year - well, 'helpless' is the best word I can use to describe my feelings."

On the same day the NFIB survey was released, a group of small-business owners met at Santa Anita - wretched companions in misery - to seek answers to their own highly specialized corner of the insurance crisis. Identified as Thoroughbred trainers, they would all sympathize with Knickerbocker, because helpless is also the best way to describe their feelings. Angry, frustrated, and desperate would be other good choices.

"Trainers have gotten to a point where they can no longer raise their day rates for the owners, and have started absorbing some of the [insurance] costs themselves," said Vladimir Cerin, who won the 2000 Hollywood Gold Cup with Early Pioneer.

"Because of that, some of them go out of business," he went on. "And the more trainers that go out of business, the closer I get to the bottom of the trainer pool. I could be next. So it is in my best interest to have as many trainers survive and prosper as possible, and as many owners prosper as possible, because there's a better chance they will stay in the business.

"That," Cerin added, "should be everybody's goal."

But that is easier said than done. Unfortunately, Thoroughbred racing is plagued by a number of proud constituencies. At any given moment, there can be conflicting agendas identified for trainers, owners, breeders, jockeys, racing boards, and racetrack managements. Stir in the ongoing demands of state governments hungry for racing's steady cash flow of tax dollars, and you have the recipe for eternal strife.

That is why it is so important to find both common ground and a unified strategy to solve the insurance crisis. Obviously, Thoroughbred trainers in California are not alone. Small-business owners everywhere are in the same boat, as Dr. Wayne Gertmenian points out, in his role as head of the management firm that operates the Jockeys' Guild. In California, workers' comp insurance for jockeys is covered by the trainers, which have been defined by law as the employers of record.

"The real problem is not with the jockeys," Gertmenian told the trainers on Monday. "It's not with the trainers, and it's certainly not with the horsemen. Carving each other out as enemies is simply foolishness. There isn't anything there to carve up. You need to be in league with each other."

No matter who he represents, Gertmenian is a good guy to have on racing's side. For one thing, he has the infinite patience and tactical skills of an international negotiator, which he is. He cut his teeth in the Nixon Administration going face to face with the Russians on their turf in the Kremlin. He also speaks the language of business, having represented management in landmark battles against the Teamsters labor union.

"This industry is incredibly wealthy, as a totality," Gertmenian noted. "It's well over a hundred billion dollars in terms of receipts. Yet the participants who put on the show are poor - I think it's about 4 percent of horsemen make any money - which means there's something very wrong with this picture."

The picture has to change, and soon. Otherwise, misery - at least in the California racing business - will never be lonely again.