Consumer Federation of California

Governor to ditch board cuts

He concedes his plan to eliminate 88 regulatory panels needs more work.

By Gary Delsohn — Bee Capitol Bureau

Thursday, February 17, 2005

Abandoning one of his most far-reaching and controversial proposals
since taking office, Gov. Arnold Schwarzenegger has decided to withdraw
his plan to eliminate 88 regulatory and policy-setting boards and
commissions, sources close to the governor said Wednesday.
In a letter the administration plans to deliver to the state’s Little
Hoover Commission today, Schwarzenegger concedes the proposal needs
further review. Members of the commission, which has held hearings on
Schwarzenegger’s proposal and plans to release a highly critical
assessment at its meeting next Thursday, have already recommended that
the government reorganization be scaled back substantially.
Included on Schwarzenegger’s hit list were boards that license and
regulate doctors and nurses, set rules for accountants, administer
seismic safety regulations, promote recycling and oversee building
contractors, architects and engineers.
Although Schwarzenegger still plans to proceed with a reorganization of
the umbrella agency that runs California’s prison and parole system,
his about-face on the larger reorganization signals a big win for
consumer activists, unions and Democrats.
Those critics and others have called his plan an executive branch
"power grab" that would harm consumers without saving the state much
money.
"My initial reaction is that this thing was so clearly political and
poorly thought out that this is a tactical retreat from a battle that
the governor would look like a fool if he pursued," said Richard Holober, executive director of the Consumer Federation of California.
"He’s gotten the accounting industry mad at him, the dentists mad at
him. He’s gotten all kinds of groups mad at him that otherwise wouldn’t
have a beef with the governor."
Robert Fellmeth, executive director of the Center for Public Interest
Law at the University of San Diego and another staunch critic of
Schwarzenegger’s initial proposal, applauded the reversal.
"It’s a good sign," he said. "One of the things you have to do when
you’re a public official is, after something is vetted, reconsider and
change your mind if it doesn’t stand up to scrutiny. Not every idea is
a good one."
Ashley Snee, a Schwarzenegger spokeswoman, said the Republican governor
is looking forward to getting the Little Hoover Commission’s report
next week. "We’ve had eight hearings. He’s heard from members of his
Cabinet. We await the recommendations from Little Hoover," Snee said.
Under state law, a government reorganization such as the one Schwarzenegger was proposing must go to the commission for review.

The governor could then submit the plan to the Legislature and it would
become law unless the Senate or the Assembly rejects it within 60 days.

Sources close to the governor said Schwarzenegger decided to pull back
because witnesses at last month’s Little Hoover hearings – both Holober
and Fellmeth testified – raised some valid concerns.
Critics in the hearings said abolishing such regulatory and licensing
entities as the California Medical Board, the Board of Registered
Nursing and the Board of Accountancy would make it harder for consumers
to get grievances investigated.
The move would also compromise public safety and make government more secretive, they argued.

Many of the 88 boards and commissions slated for elimination would have
been folded into the governor’s State and Consumer Services Agency,
which is run by a governor’s Cabinet appointee. Boards and commissions
also have members appointed by legislators and are subject to state
open-meetings laws that wouldn’t apply to regulatory functions of the
agency.
Schwarzenegger’s proposed government reorganization was one of the
first agenda items he identified in his initial State of the State
speech a year ago. The move almost immediately set off political
sparks.
"Every governor proposes moving boxes around to reorganize government,"
Schwarzenegger said at the time. "I don’t want to move boxes around; I
want to blow them up."
State government, he added, was a "mastodon frozen in time and about as responsive."

He soon created the California Performance Review Commission, a panel
of 275 state workers who spent more than six months reviewing
California government and issued a 2,500-page document with more than
1,000 recommendations.
The CPR, as it came to be called, predicted savings of up to $32
billion over five years, but the Legislature’s budget analyst put the
potential benefit at less than half that amount. The administration
later backed away from the projection.
Critics complained that the commission’s work was done largely in
secret, without input from some of the targeted boards and commissions
but with direction from business interests objecting to what they say
are regulatory excesses.
Schwarzenegger, while praising the commission’s work in public,
privately said it took on too much. In January, he called on the
Legislature to implement just two aspects of the sweeping report – the
prison system restructuring and the closing of boards and commissions. Holober of the Consumer Federation said he is convinced that
Schwarzenegger retreated in the face of criticism because he is already
embroiled in controversy over his proposals to revamp education
funding, overhaul employee pensions, redraw legislative districts and
impose new spending controls.
"He doesn’t want to get into all those fights over boards and
commissions at the same time he’s taking on a fight with organized
labor, teachers, schoolchildren, retirees and others," he said. "I
guess he’s making a tactical retreat in hopes of restricting the
numbers of enemies he has to make at one time."
About the writer:

‘ The Bee’s Gary Delsohn can be reached at (916) 326-5545 or gdelsohn@sacbee.com.