Auditors offer ideas for saving state money

March 24, 2011

Michael Gardner of the San Diego Union Tribune
For California Budget Watch

SACRAMENTO – While the state may be short of money, there is no drought of cash-saving ideas.

But many cannot pan out politically, legally or logistically.

Nonetheless, Gov. Jerry Brown and lawmakers have in their hands a pair of promising far-reaching sets of recommendations developed by independent state investigators.

These separate proposals by the state Auditor and Little Hoover Commission have been overshadowed by the more immediate debate over spending cuts and tax extensions now playing out in the Capitol.

But these recommendations, a combination of ideas ready to launch and others that would take more time to implement, are no less contentious.

Proposals advanced by the Little Hoover Commission include more public-private partnerships, such as toll roads and water projects. Others involve dramatically overhauling public pensions, giving the state water agency more control over spot-market buying of electricity, and launching an independent review of prison sentences.

State Auditor Elaine Howle’s list includes reviewing the job classifications of some 78,000 state workers designated as public safety employees to determine whether they should qualify for the more generous benefits they receive as a result of their employment classification. She also wants to examine building leases to determine if some rented offices are truly necessary, and consider using the governor’s clemency powers to release prisoners too medically frail to commit new crimes.

Howle also suggested that fines and penalties should be adjusted for inflation and various state fees could be raised to cover the real cost of services provided.

Many of the ideas are not new, but were shelved for various reasons when offered before. For example, the Little Hoover Commission proposed a serious review of prison terms in 2007 and laid out a plan to merge state personnel departments 16 years ago. The auditor outlined fee proposals in 2008 and her office urged dropping some medicines from Medi-Cal coverage in 2003.

Daniel Hancock, chairman of the Little Hoover Commission, said the ideas will take time before producing cash savings and better efficiencies.

“None of the commission’s recommendations are quick fixes, as many of the problems the commission addresses have been decades in the making,” Hancock told the governor.

Both reports grew out of a challenge issued by Brown to provide a list of the “Top 10” actions the state could take to save money and make government more efficient.

The responses, in some cases, were familiar to Brown. He had already incorporated a few, such as turning over some parole services to county probation officers, in his budget.
Brown is locked in immediate budget talks, but his administration is reviewing the proposals, said Elizabeth Ashford, a spokeswoman.

“You want a balance between something that will save money and what is prudent,” Ashford said.

Neither report offered a complete estimate of savings, however.

Some proposals are already in the works, such as the early release of seriously ill prisoners and selling the glut of state-issued cars. Brown previously moved to save millions by forcing thousands of state workers to give up their mobile phones and he has trimmed state vehicle fleets.

Brown and lawmakers are still struggling to balance a state budget deep in the red, even as he signed legislation Thursday enacting about $12.5 billion in cuts. Negotiations drag on over putting before voters a ballot measure to extend temporary increases in the sales, car and personal income taxes. Without those taxes, the budget remains more than $11 billion out of balance.

Historically, Republicans have insisted that eliminating “waste fraud and abuse” could go a long way toward mitigating deep cuts. But neither state watchdog has uncovered billions of savings that would fall within those categories.

However, Republicans have identified just recently more than $109 million in questionable spending. Most of that involves overtime within the Department of Corrections, despite calls to curb the expensive practice. The GOP also has insisted pension reforms would save taxpayers untold millions. Cutting services to illegal immigrants, often difficult to do legally because of federal laws and court intervention, also has been a rally cry among conservatives.

Some Republicans have submitted recommendations on their own. For example, Assemblywoman Kristin Olsen, R-Modesto, supports five proposals coming out of another nonpartisan arm of state government, the Legislative Analyst. Taken together, the five could save the state more than $1 billion, said Olsen, a freshman who voted for most of the budget cuts last week.

The legislative analyst’s suggestions include allowing schools to save money by going out to bid in the private sector for non-instructional services, using electronic recording devices to tape court proceedings, and contracting out for court reporters.

“Certainly these actions alone will not solve the budget deficit, but these changes are achievable and available,” she said.

The Little Hoover Commission is a bipartisan body created by state law in 1962 to explore ways to make government more efficient. The 13-member body consists of nine members of the public and four legislators. There must be a balance of Democrats and Republicans.
The state Auditor’s office is an independent department that evaluates spending by various state and local agencies and programs . The lead auditor is appointed by the governor for a fixed term and does not need Senate approval. However, some probes have to be approved by a special joint Assembly-Senate committee. Investigations also launch inquiries in response to confidential whistleblower complaints.
Little Hoover Commission recommendations:
- Pension reform: Investigate radically overhauling public pensions offered by state and local governments, including freezing benefits and potentially rolling back credits in the future. Consider 401K programs instead of pensions that guarantee a set amount monthly.
- - Public-private partnerships: Stop using general obligation bonds where possible and instead shift to more public-private partnerships to not only build, but also operate, projects, from roads to water.
- Prisons: Take a fresh look at sentencing laws to determine whether terms meet public safety goals while keeping costs in check.
- Local government: Determine whether more programs should be shifted to counties, including setting financial incentives for local governments that meet state goals and cut expenses. Follow through with the governor’s proposal to realign some health and human services, sending more responsibilities and funding to counties.

State Auditor recommendations:
- State vehicles: Review whether to contract out for state motor pool operations and garages. Ensure that issuing a state car is justifiable in terms of need and expense, compared to renting or reimbursement for using a personal car. Significantly cutting motor pool costs could save up to $50 million.
- Public safety pensions: Modify job classifications to ensure that those in those jobs are truly involved in front-line public safety. Public safety pensions awarded to firefighters and police, mostly, are more generous, allowing them to retire sooner at higher pay. (No savings estimated.)
- Trim the number of medicines covered under MediCal .
- Resolve disputes with drug companies over rebates. Currently, $423 million is in dispute.
- Sate buildings: With fewer employees and budget pressures, review whether rented offices are necessary. Stems from probe reporting the Department of Corrections had leased 5,900 sq. ft. for four years, but the offices remained vacant at a cost of $580,000.
- Prisons: Release permanently incapacitated inmates. Some have already been transferred out of prisons. It cost taxpayers $46 million to care for just 32 of these prisoners last year.
Some proposals from Republicans that have also been outlined by the nonpartisan Legislative Analyst:
- Kindergarten: Change kindergarten enrollment date to Sept. 1 and require that students be at least five years old. Similar legislation has been adopted, but does not go into effect until the 2012-13 school year.
- Education: Loosen restrictions so schools and community colleges have more flexibility to contract out for non-instructional services, such as payroll and food service.
- Courts: Allow courts to shift from shorthand court reporters to electronic taping and contract out for private interpreters, who are generally half as expensive as court employees.
- Require University of California faculty to teach one additional course every three years.

Share:
  • Digg
  • del.icio.us
  • Facebook
  • Mixx
  • Google Bookmarks
  • Reddit
  • StumbleUpon
  • Technorati
  • Twitter

Share This Post

You must be logged in to post a comment Login