Arnold’s State Control 

Top-heavy plan to reshape government likely to bottom out

Thursday, Aug 5 2004

Just in case 2,500 pages didn’t answer what would make our despised state government work better, Governor Arnold Schwarzenegger put the question out to the public this week.

“I want to hear directly from you,” said Schwarzenegger at a ceremony in Sacramento, where he formally received a massive blueprint to reshape state government. “I am asking every citizen.”

Make no mistake, he’s going to get an earful. And so far, commercial interests are considerably more chipper about the reform plan than, say, environmentalists or consumer advocates.

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Take, for example, the bureaucracy that protects the environment.

That’s an easy one, says Tony François of the California Farm Bureau Federation. If a farmer needs to use pesticides, make the process easier, so that there aren’t three different agencies telling him what to do. And be reasonable: The cost of complying with some environmental standards just isn’t worth the benefit.

Au contraire, says Sujatha Jahagirdar, clean-water advocate for Environment California. Her vision of an improved state government is one that’s tougher on policing agribusiness and less subject to influence from lobbyists.

Schwarzenegger hopes to make them both happy with the government-reform plan unveiled Tuesday. But the most united chorus is the one that says this thing will never fly in anything like its current form.

The mammoth California Performance Review encompasses nearly everything but the court system and the Legislature, although Schwarzenegger has separately talked of wanting a part-time Legislature. This behemoth was so top-secret that even Schwarzenegger and senior aides claim they didn’t see the document before Tuesday.

The portion that deals with environmental protection is typical of the whole. It would shrink bureaucracy by folding multiple, quasi-independent agencies into one. The state water board, which works to clean up water pollution, would disappear, as would the Air Resources Board, which handles air pollution. Both functions would fall under the state’s Environmental Protection Agency, putting them more directly under the governor’s control.

As pitched, the idea is to make government more efficient, and maybe it would be. But along the way, Governor Schwarzenegger — and future governors — also would become more powerful and the state’s government less open to public scrutiny and participation. Activists also worry that simplification could mean a loss of checks and balances against corporate lobbyists, whose own influence on government will be at least as strong as ever.

In money terms, proponents claim the proposal would have the vital benefit of saving $32 billion over five years. Critics call that wishful thinking, which, come to think of it, could describe many assumptions underlying this year’s state budget, which is at least as debt-ridden as anything proffered by the deposed Gray Davis.


The heart of the extreme environmental make-over is to collapse the air and water agencies into the existing Environmental Protection Agency. Less controversial is a sweeping consolidation of departments that manage trash and waste. But the air and water agencies have a legacy of driving cutting-edge advances. The air board pushed for the catalytic converter, clean-burning gas, hybrid engines and electric vehicles. The water board tackled storm-water runoff, the leading source of water pollution.

“This system has had significant positive effects on the state’s health, environment and economy,” says David Beckman, a senior attorney for the Natural Resources Defense Council in Los Angeles. “California is looked at across the country and the world as a model of government that’s done the right thing, rather than as an example of inefficiency and failure.”

Each threatened agency has its own board, its own analysts, its own public meetings and its own niche of authority. In the view of the farm federation, the current setup encourages activists to be obstructionists. “They tend to prosper in a climate where you’ve got to see five different people or agencies to get permission to do something,” says François. “All they’ve got to do is convince one of those five to say no. They say, ‘How can we get rid of the board that gave us smog checks or catalytic converters?’ But that misleads people into thinking air quality would not be protected.”

In reshaping government, is it even possible to make Tony François and Sujatha Jahagirdar happy at the same time?

Yes, says François. He cites farmers and ranchers trying to stabilize and restore eroded streambeds along California’s central coast, from Santa Cruz to Santa Barbara. “Nobody’s really against that,” he says. “But you may need two permits from Fish and Game, and another maybe from the Corps of Engineers and another from U.S. Fish and Wildlife. Instead of saying, ‘Here’s a good project — go knock yourself out,’ the view is, ‘We’ll exact fees and make restrictions and prohibitions.’

“The idea is, how do you help the environment without breaking the bank or bureaucratizing it to death?”

The report, in fact, goes on for page after page about how to simplify getting permits as well as other interactions involving the government. François’ organization was among many that provided input for the report.

A handful of enviros took part as well, but a cacophony of environmental groups, legislators and their staff experts complain that they were left out. Schwarzenegger “decided to close the door and bring in a select group of people representing special interests,” says Doug Heller, executive director of the Santa Monica–based Foundation for Taxpayer & Consumer Rights. “And he did it all without the public scrutiny that is appropriate and necessary. The only thing worse than a bloated government is a secret government.”

And this from a governor who said he wanted to let the sunshine in — that is, do the public’s business in public. For that matter, this entire enterprise is a remake of Schwarzenegger’s original promise. His campaign pledge had been to ferret out billions of dollars in “waste, fraud and abuse.” Instead, Schwarzenegger’s reform plan would save money, for example, by delaying the start of kindergarten for children who turn 5 after September 1.

In total, says Heller, the performance review betrays a deeper agenda than efficiency, one tilted against consumer protection and unions. “And as you pare down government, you consolidate power upward. This proposal is so top down, and so focused on leaving a small number of agencies under the governor, that it looks like Schwarzenegger is trying to create a kingdom rather than reform the government.”


Suspicion arises because advocates still don’t really know who Schwarzenegger is, what he really stands for. Business interests think they know he’s on their side, so they’re inclined to give Schwarzenegger the benefit of the doubt. He hasn’t raised taxes in the traditional way yet, so that seems to pass the Republican test of true virtue. Left-leaning Democrats presume that Schwarzenegger isn’t their guy, but they’re guessing, too. In truth, it isn’t obvious that Schwarzenegger, a policy ingénue, knows exactly who he is politically. He frequently winds up in much the same philosophical place as predecessor Gray Davis, though in a less overtly calculating way. This on-the-job development of a political psyche counts as a vital, unfolding political drama.

In this murkiness, there’s fodder enough for progressives to weave conspiracy theories. First, there was Schwarzenegger’s pick to head the Department of Finance, Donna Arduin, who wasted no time last fall offering that college tuition in California doesn’t cost nearly enough. She came direct from the administration of Florida Governor Jeb Bush. And straight outta Texas comes management expert Billy Hamilton, who co-chaired the California Performance Review. Hamilton still works for the Republican governor of Texas, as he did for the previous Republican governor, who was You-Know-Who.

Then again, Hamilton was also called in to help President Bill Clinton’s administration. A spokesman for the performance review calls the criticisms unfair. There’s still time for feedback during a public-hearing process, says Bob Martinez. The initial secrecy was to create a think-tank atmosphere, “where people could work in an unfettered way and develop recommendations within a limited time frame.” About 1,800 outside contributors weighed in; a staff of 250 labored over a four-month period through the end of June. And the names of those consulted will be released, Martinez adds. That, at least, would differ from Vice President Dick Cheney’s refusal to divulge information about his energy task force.

The effort, says Martinez, has been a conscientious attempt to improve government, which the executive branch is supposed to do periodically under legislation passed in 1967. Under this process, the plan could still undergo substantial change before the Legislature considers the entire package.

It would surely go down in flames without major changes and downscaling, as state Senate President John Burton (D–San Francisco) already has indicated. There are just too many parties offended by pieces of the wide-ranging plan who’d vie to shoot it down.

If the package fails, Schwarzenegger could take it directly to voters, but it’d be a tough sell if the environmental community and other popular interest groups unite against it. The Legislature also could take up the plan piecemeal. And it’s quite possible that nothing will ever come of this at all.

Which would be a shame, says clean-water advocate Sujatha Jahagirdar, despite her misgivings: “We’d hope that the ultimate goal of the administration would be to achieve clean water and air in the state of California. We would be very happy to get a call from the Governor’s Office asking for our input.”

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