Gov. to Get State Review Report

It is billed as a fresh look at government, but a proposed overhaul of state bureaucracy set to be officially unveiled today is sprinkled with ideas that have been rejected time after time.

Included in the 2,500-page report to Gov. Arnold Schwarzenegger are a number of proposals that have died in legislative committees, a measure that is already law and an expired tax credit that has been derided by nonpartisan budget experts.

One recommendation in the California Performance Review, for example, would increase lottery jackpots, in a bid to attract more players. The proposal never made it out of a legislative committee this year, having run into resistance from teachers union officials who feared it could ultimately drain money from schools.

Schwarzenegger is to get his first look at the report in a ceremony at a surplus property warehouse in Sacramento. The location has symbolic value. One of the report’s suggestions is for the state to more aggressively sell off its unused property.

The 275-member review team drafted the report at Schwarzenegger’s behest -- part of his promise to streamline government. Democratic leaders moved quickly to denounce it and predicted that it would never pass.

“It isn’t going to come to fruition,” Senate President Pro Tem John Burton (D-San Francisco) said Monday. “They clearly are biting off a lot more than anyone could conceivably chew.

“They want to get rid of the Commission on the Status of Women. Good luck on that one,” he said, sarcastically. “They want to get rid of [the Department of ] Fair Employment and Housing. That was a fight we fought in the ‘60s. I don’t think we want to get rid of that.”

In the coming weeks, a 21-member commission appointed by Schwarzenegger will hold five hearings around the state, inviting public comment on the plan. The first is scheduled Aug. 13 at UC Riverside. After the hearings, Schwarzenegger will have several options: He can embrace the full report and urge its adoption in the Legislature or through a voter initiative campaign; he can discard the whole thing; or he can push certain pieces while burying others.

“It’s not his,” said Rob Stutzman, the governor’s communications director. “It’s the recommendations of the performance review that he created. He’s proud of their work. He knows this was a lot of creative and exhaustive thinking and review of government. But in terms of what specifically is advanced as his reorganization or reform, that remains to be seen.”

One Republican state senator, speaking on the condition of anonymity, said it would be futile for Schwarzenegger to push the whole plan.

“I don’t think [the governor’s office] has any illusions that you can have a bunch of bureaucrats make recommendations, submit them to the Legislature and the Legislature will adopt that,” the senator said. “The governor has to work through different recommendations and figure out what he can get through a Democratic-controlled Legislature that wants to expand government, not streamline it.”

Though Schwarzenegger commissioned the review, one member of his political team said that the governor may try to separate himself from the recommendations.

“They’re keeping themselves insulated from the [California Performance Review] so they can accept what they want and reject what they don’t want. If they get 70% of this stuff they can declare victory and go home,” the aide said of the governor’s office. “Because it wasn’t their product, so they don’t have to deliver on all of it.”

Much of the review is a harsh critique of state government. The opening pages offer the verdict that the state’s bureaucracy “fails the people of California ...”

But there are exceptions. At least one state department singled out for praise has close ties to the authors. The state Department of Motor Vehicles, for example, is credited with “demonstrating leadership” by reducing long lines at field offices. The head of the DMV and the co-executive director of the California Performance Review are the same person: Chon Gutierrez.

The review suggests eliminating 118 of the state’s boards and commissions. In practice, the Legislature has shown little interest in getting rid of state boards. In 1989, the Little Hoover Commission noted that state boards were “proliferating without adequate evaluation of need, effectiveness and efficiency.” But the Legislature has not heeded that message, opting to try to improve troubled boards rather then eliminate them.

The report also calls for reinstating a tax credit for manufacturers to purchase equipment. It was considered a failure by nonpartisan budget analysts and the Legislative Analyst’s Office. The tax break, which cost the state an estimated $400 million a year, expired in 2004 after being in effect a decade.

The review said the tax break would generate new business and could add $330 million to state coffers over five years. Last year, industry groups made a big push to keep the law from expiring. Democrats rejected the effort, saying there was no evidence that it provided any savings.

“It turned out to be a complete waste of taxpayer money and there is no indication it wouldn’t be in the future,” said Lenny Goldberg, executive director of the California Tax Reform Assn., a left-leaning advocacy group.

The report also dusts off an old proposal to raise the age at which children are admitted to kindergarten. It suggests that raising the starting age to 5 years or older could save the state $2.7 billion over five years.

A legislative bill analysis said it was first suggested by former Gov. Pete Wilson in 1992. It came back in a proposed bill in the late 1990s, and again last year.

It died every time.

The problem is what to do with the students who have to wait another year. Critics of the bill cautioned that the state would have to pick up the cost of paying for them in various subsidized day care and preschool programs.

“You are not saving the state any money,” said Casey Beyer, director of governmental affairs for First 5 LA, a commission established to oversee use of state money for early childhood development programs.

In one case, a review recommendation seems to call for a law that is already on the books. The review team suggests a tax amnesty that was enacted by the Legislature in the budget passed last month.

Substance aside, some legislative leaders objected to the review team’s methods.

The report was drafted in great secrecy. Members of the task force were asked to sign confidentiality agreements in which they promised not to publicly discuss their work. But business interests and lobbyists were given easy access.

Assembly Speaker Fabian Nunez (D-Los Angeles) said he was concerned that business played too large a role in the report’s preparation -- at the expense of public interest groups. Lobbyist disclosure forms filed with the state show that companies including Hewlett-Packard, Microsoft, EDS and PricewaterhouseCoopers had dealings with the California Performance Review team in recent months. Various environmental and public interest groups said they did not get a chance to meet with team members.

“Not a whole lot of sunshine has been involved in this process,” Nunez said in an interview. “If you’re revamping government to the extent that the governor wants to do it -- which is pretty comprehensive -- all of these proposals need to be studied very carefully.”