AUGUSTA – Battles over the state Workers’ Compensation system could delay the current legislative session, and could lead to a special session of the Legislature.

“If they go home without passing anything, my inclination at that point would be to call a special session,” said Gov. Angus King. “This is a catastrophe for the Maine economy.” He added that the Legislature could not fail to address the issue.

King said the Workers’ Compensation system is in crisis because of a state supreme court ruling that says injuries not related to work must be considered by the state’s Workers’ Compensation commission staff when deciding what level of benefits an injured worker should receive. King has submitted legislation that would reverse the court decision.

The National Council of Compensation Insurers estimates the increased premiums for Maine employers will be at least $45 million a year as a result of the ruling. And the cost of applying the ruling to existing Workers’ Compensation cases that are likely to be re-evaluated is estimated at between $160 million and $240 million.

King has been hinting for more than a week that not acting on his legislation would result in his calling lawmakers back to Augusta for a special session.

“I am not surprised at that at all,” said Ed Gorham, president of the Maine AFL-CIO. “I suspect the issue, in all likelihood, will be dealt with this session and avoid the necessity of a special session.”

Gorham said the King measure is too broadly drafted and could affect other case law dealing with the determination of benefit levels.

Peter Gore of the Maine State Chamber of Commerce doubts a special session is needed, if lawmakers deal with the problem.

“This issue is not going to go away,” he said, “and if they can’t deal with it in the regular session, they will be forced to deal with it in a special session.”

Members of the Legislature’s Labor Committee held a tense work session Tuesday afternoon with little advance notice. It was clear the panel was split over the measure along party lines.

“I don’t see any need to go over this again and again,” said Rep. Russ Treadwell, R-Carmel. “I am prepared to vote this out now.”

Republican panel members said they are convinced King’s plan is the proper way to address the problem, and accused the majority Democrats of stalling on the issue by not calling a work session until a week after the public hearing on the measure.

Rep. George Bunker, D-Kossuth Township, the co-chairman of the Labor Committee, said the bill as presented by King would not pass the House. He said the measure is too broad and needs changes in language before it can be considered by the full Legislature.

“If you think you can get this through the House as is, you are wrong,” he said. “I’ve got the votes to hold this.”

The GOP members then sought an immediate vote, but the Democrats, who outnumber Republicans 7 to 6 on the committee, recessed the meeting without taking a vote.

“This is a farce,” said Sen. Tom Sawyer, R-Bangor, as he stomped out of the hearing room. “Nobody’s mind is going to be changed in there. Let’s just send this to the floor.”

After a half-hour recess, the panel reconvened and following along party lines defeated a motion to immediately report the measure to the floor for action. After asking for additional information from the National Council of Compensation Insurers and others, the panel leaders said further work on the legislation is needed, but did not set a meeting time.

While the court ruling is only the most recent, and serious, problem with the Workers’ Compensation system, King said the way the Workers’ Compensation commission that oversees the law has operated has been a problem for a long time.

“The board itself deadlocks on everything,” he said. “That’s why I submitted legislation to change the makeup.”

The commission has four representatives from labor and four from business. King would replace the commission with a nine-member agency that would have three members from labor and three from business with three members from the public as the swing votes. All nine would be nominated by the governor and would need confirmation by the Legislature.

The proposal also would have the executive director of the new agency nominated by the governor and confirmed by the Legislature instead of hired by the commission.

The Labor Committee recommended against the proposal by a 7-6 vote with all the Democrats opposing the plan and all the Republicans supporting it. But, a bipartisan majority of the Senate voted 21-12 Monday night in support of the measure.

“I am just thrilled the Senate saw fit to pass that,” King said Tuesday.

The House has yet to consider the commission reorganization proposal.