I know what you are saying... but the bill does not increase the premiums enough to cover the benefit increases... and the bill allows the funds to call on STATE funds for the shortfall!
You must mean the insolvency fund for bankrupt insurance companies. If any more insurance companies go broke because of higher benefits and not enough increase in premium an insolvency fund administered by the state pays the bankrupt company's claims. However the insolvency fund gets its money by assessing the remaining solvent insurance companies a percentage of all premiums. There is no state money at risk unless the insolvency fund goes broke and for some reason can't raise assessments high enough on the remaining insurers.
In that case I guess that state money might come into play, but it's a very long shot. They'd raise the assessments on employers/insurers through the roof before they bailed out the insolvency fund with taxpayers money.
Employers pay the premiums to the insurance company who is handling their workers' comp policy. The state sets the mandated pay outs, but the insurance company sets the premium rates necessary to cover them.
Thus, employers will pay for the higher pay outs. Which means, in the end, it will be the employees who end up paying -- with their jobs or lower wages. Along with the consumers, in the form of higher prices.
The only costs to the state (and the taxpayers) will be higher premiums to their workmens' comp provider -- who is, doubtless, a large Gray Davis contributor.