ALBANY — Succeeding where Governor Pataki failed, Governor Spitzer has persuaded lawmakers to set aside their differences and agree to overhaul the state’s bloated workers’ compensation system.

The two sides were also on the verge of announcing a deal on a bill authorizing civil confinement procedures for sex offenders who complete their prison terms, making progress on a high-profile criminal justice issue that typified the struggles of Mr. Pataki’s last term in office.

The breakthroughs appeared to defuse the tension and resentment between Mr. Spitzer and lawmakers stemming from the dispute over the selection of the state comptroller. They also allow Mr. Spitzer to back up his fiery rhetoric over the last several weeks with results.
Lawmakers, however, cautioned that Mr. Spitzer was picking low-hanging fruit and that the more peaceful atmosphere in the Capitol is likely to be cut short as the two sides wade deeper into negotiations on education and Medicaid spending.

The day after Mr. Spitzer was elected, he brought together the state’s leading business group, the Business Council of New York, and the New York chapter of the AFL-CIO and instructed them to hammer out a plan that would lower workers’ compensation costs while increasing benefits to injured employees.

New York businesses pay among the highest workers’ compensation rates in the nation, primarily because the state requires lifetime payments in cases of permanent-partial disability, a category of injury that includes lower-back strain. Lifetime benefits account for 14% of the system caseload but consume 77% of the costs, according to the business council.

The deal that emerged 16 weeks later places a cap on the number of years an employee with such an injury can collect cash benefits, limiting the time to four to 10 years, depending on the severity of injury. Legislation establishing a cap would apply only to new cases and not affect the tens of thousands of people already receiving lifetime benefits.

The plan also aims to strengthen anti-fraud measures by stiffening penalties imposed on companies that fail to purchase workers’ compensation insurance. (When a company does not buy an insurance plan, employers across the state bear the cost of benefits through higher assessments.) In addition, it includes programs to encourage employees to seek medical treatment and return to work.

Using some of the money saved by the disability cap, the plan raises maximum weekly benefits to $600 from $400 over three years and raises minimum weekly benefits to $100 from $40. By year four, maximum benefits would equal two-thirds of the average weekly wage in New York, which would now be $694, according to the Associated Press.

Spitzer officials said the plan would save public and private employers $600 million to $800 million — a 12% to 15% reduction in compensation costs — after it’s fully phased in over a four-year period. Mr. Spitzer’s insurance superintendent, Eric Dinallo, is responsible for making sure that insurance carriers benefiting from the cap pass on the savings to employers by lowering premiums.

“This is a remarkable win-win situation for both workers and employers,” Mr. Spitzer said at a press conference announcing the agreement.

Legislative leaders used the announcements as opportunity to take shots at Mr. Pataki and to show they’re willing to play ball with Mr. Spitzer as long as he stops hitting them with a bat.

The Democratic speaker of the labor-friendly Assembly, Sheldon Silver, said workers’ compensation was an “increasingly difficult puzzle to solve because we were missing a key piece to the puzzle: leadership.”

The Republican Senate majority leader, Joseph Bruno, who has been on the receiving end of many of Mr. Spitzer’s sharpest blows, said the compromise was brokered “not by drawing a line in the sand, not by threatening, but by negotiating in good faith.”

Mr. Spitzer, who said he had lost confidence in the Legislature after it installed Assemblyman Thomas DiNapoli as comptroller, suggested a willingness to move past the contretemps. “I deal with the Legislature issue by issue,” he said.

The next issue is looking increasingly like it will be civil confinement. Lawmakers in the Senate and the Assembly told The New York Sun they were on the brink of announcing an agreement on establishing civil confinement procedures for sex offenders who complete their prison terms, an unfulfilled goal of the Pataki administration.

“It’s close, really close,” Assemblyman Joseph Lentol, a Brooklyn representative who heads the chamber’s committee on codes, said.
Mr. Lentol said the compromise plan gives judges the option of imposing intensive supervision as an alternative to confining offenders in a mental hospital. Republicans had previously refused to allow such an option. Democrats also succeeded in having screening panels, which determine whether a released prisoner is a candidate for civil confinement, be composed of mental health officials. The Senate had pushed to have criminal justice officials make the decisions.

The compromise in the works also includes stiffer penalties for sex offenders and broadens the category of sexual offense to include crimes motivated by sexual violence, measures backed by Senate Republicans. For example, a person who is caught breaking into a house to rape a woman would be charged with a sex offense even if the offender does not succeed in harming the woman. The plan also mandates determinate — or fixed — sentencing for sex offenders. At least 16 other states have laws authorizing the confinement of sex offenders.