If lawmakers agree on a way to contain ever-rising workers' compensation premiums, it might seem just another demonstration of Gov. Arnold Schwarzenegger's political strength.

He has pledged to put a business-backed reform plan on the November ballot if there is no legislative deal.

But motivations for reaching a compromise go well beyond a recognition of this governor's popularity with voters, experts say. Factors that could drive an agreement include the costs and risks for all involved if workers' compensation is the subject of a major initiative battle.

"I don't think anyone wants this on the ballot," said Dorothy Rothrock, chief lobbyist for the California Manufacturers and Technology Association.

The state's insurance premiums are among the nation's highest and twice the U.S. average. The workers' compensation system's huge price tag has split the governor and the Legislature over his plan to cut costs by $11 billion.

Many involved in the legislative talks say a deal is likely by next month, despite the partisan divide over how to fix a system that pits employers and insurance companies against doctors, trial lawyers and labor unions.

Schwarzenegger had momentum coming out of the primary election earlier this month, when he went directly to voters and won with Proposition 57, a $15 billion bond plan to cover government overspending. He promised to go over lawmakers' heads again in November if they can't strike a deal on workers' comp.

But waging campaigns for or against a ballot measure could eat up resources that would otherwise go to initiatives dealing with health insurance, property taxes and lawsuits against small businesses. Industry experts estimate the combined costs of a workers' compensation ballot box battle could reach $40 million.

"There are a long list of the things the governor and Legislature know they have to deal with, and if they can dispose of this without going to a ballot measure campaign they're going to be very relieved," said Darry Sragow, a political consultant who advises Assembly Democrats.

Nearly four in five voters surveyed last month by the Workers' Compensation Action Network, the business coalition promoting the ballot initiative, said they favored reforms embraced by Schwarzenegger. The plan would cut costs largely by limiting access to treatment.

But both sides know how vulnerable support could be once an anti-initiative campaign got under way and how emotionally charged and confusing the debate could become.

Initiative supporters would argue that greedy trial lawyers and workers filing fraudulent claims are to blame for high costs and, by extension, a bad economic climate.

Senate Republican leader Jim Brulte previewed that campaign. "There are tens of thousands of California employees who have not received a pay raise in the last year because their employers' workers' comp costs have skyrocketed," Brulte said.

Steve Hopcraft of the California Applicants' Attorneys Association offered a taste of the opposition.

"When they see folks in wheelchairs and women's leaders saying, 'This takes away protections from women harassed on the job,' it's not going to be, as the governor is promising, this wonderful reform," Hopcraft said. "It's going to be something ugly that only helps insurance companies."

Established nearly a century ago, workers' comp was designed to patch up injured employees and return them to work quickly, at no cost to the workers and no time or money wasted on affixing blame.

Despite disagreement over how to scale back costs, there is bipartisan consensus that premiums - among the costliest in the nation and, in individual cases, triple or more what they were only a few years ago - are too high. The sooner a compromise is enacted, lawmakers hope, the sooner costs, and rates, might come down.

A finding last week that the system may cost $17.9 billion this year - $7 billion less than expected - also has made a compromise seem less daunting; Schwarzenegger has said he would accept a deal with less than the $11.3 billion in cuts he originally sought.

Historically, voters prefer detailed policy choices to be made by lawmakers rather than at the ballot box.

By a 3-to-1 ratio, voters believe elected officials are better suited than the public to decide "highly technical or legal policy matters," according to a nonpartisan Field Poll conducted five years ago.

And in the Workers' Compensation Action Network survey, 28 percent of voters singled out lawmakers as the group most to blame for the deterioration of the workers' compensation system.

If a ballot initiative goes forward, it could further erode voters' confidence in their legislators.