By Evan Storms
As of late, there has been no lack of rhetoric among California politicians about the need for difficult decisions in the face of a $25.4 billion deficit—and no excess of such decisions in the actual course of state politics. The responsibility for making those decisions now falls to you. But of that, you seem well aware. And so I am not writing to ask you to make difficult decisions. I am asking for something still rarer in this state’s history: that you make smart decisions.
This request is neither trivial nor empty. Smart means something specific in the context of state government; and that something is specifically what we have yet to see in response to California’s budget shortfalls. Smart is fundamentally apolitical. I am not asking you to lean left or right, to come out for or against unions, or business, or welfare. I ask only that you support the efficient operation of the California government in quantifiable, concrete terms—and that you support it not with promises, but with policy.
Some are quick to dismiss the idea that inefficiency is any significant part of California’s problem. They are wrong, but not entirely. Vague claims about eliminating waste are indeed, according to an LA Times article, “soothing to voters’ ears but basically…drivel.” The effort for efficiency that this state needs is quite the opposite. It has to be based on a comprehensive examination of how California works and what it spends, and to implement the type of definitive cost-cutting measures that any business in California’s position would have to undertake.
Let me be specific. Consider the prison system. Our state spends $47,000 per prisoner per year, over 50% more than the national average and nearly three times what Texas spends. Research shows that this is largely the consequence of overpayment for healthcare services and security personnel, which in turn is the consequence of a lack of price competition. Contracting with private firms would reintroduce such competition, and even if the result was only an approximation of the more efficient Texan system, this would save the state upwards of $2 billion annually.
Or consider the California Health and Human Services Agency (CHHS). CHHS has 13 different departments. Findings from the California Performance Review suggest that their poor coordination costs the state billions of dollars each year. To cite just a few examples, beneficiary data for CHHS is stored in 60 different information systems, which leads departments not only to perform overlapping data collection, but also to have multiplied maintenance costs. Likewise, eligibility for various state welfare programs is determined independently, so that the same data has to be processed multiple times by different departments. No one benefits from this redundancy, least of all the beneficiaries who are forced to navigate a more complex bureaucracy because of it. And note that cutting a mere 10% of CHHS’s expenditures would close nearly a third of the budget gap.
These are not isolated cases; redundancy, overpayment, and administrative sprawl have become the norms of this state’s government. In the UC system, the ranks of senior management have increased 97% in the past ten years, while the student population has increased 40% and the faculty only 23%. There is now nearly one senior administrator for every faculty member. Within the Natural Resources Department (NRD), there is both a Department of Conservation and the California Conservation Corp. Within the Environmental Protection Agency (EPA), there are Departments of both Pesticide Regulation and Toxic Substances Control. And in addition to the NRD and the EPA, there is an Ocean Protection Council. One struggles to imagine an arrangement in which there is no administrative and functional overlap among these bodies. Let those who maintain that there are no substantial savings to be gained by eliminating inefficiency imagine such an arrangement over the span of the state’s 11 agencies, 79 departments, and more than 300 boards and commissions.
Identifying these issues did not require some complex computer algorithm or access to vast amounts of government data. They are manifest to anyone willing to look through the state’s own reports. I work with California Common Sense, a Stanford-based group doing exactly that. Enumerating the structural inefficiencies we have found would make this far too long for a polite letter. It suffices to say that there are objectively identifiable inefficiencies, that they increase the state’s operating expenses by billions of dollars per year, that California Common Sense has drawn up viable policy solutions, and that we cannot be the only ones who wish to see them implemented.
Much of the recent budget debate has focused on the long-worn issue of tax hikes vs. service cuts. Insofar as short-term funding is lacking, that is appropriate. But in the long term this tired dichotomy only obscures the necessity of broader structural reform. There is a group of Stanford students eager to help bring that about, but the political impetus for reform is your responsibility and your opportunity. Your commitment to tough decisions gives me some confidence. A commitment to smart decisions would give me more.