Taxable Talk

Let’s assume you are the President of Acme, a business that makes all sorts of things. Your major customer suffers a financial reversal, and your sales are going to go down by 40%. Do you continue to spend at the same rate as before, or do you cut spending (likely cutting salaries across your company, too)? Of course you cut back — you can’t print money.

Let’s move to California. Citizens of the Bronze Golden State have been suffering financially for the last several years. That’s caused a marked decrease in revenue. Meanwhile, while some spending cut have been made, the sacred cow of personnel (and benefits thereto) have only slightly been touched. A quick perusal of benefits available to public employees in California show that almost all participate in defined benefit pension plans (rather than 401(k) type plans that those in private industry partake in).

Meanwhile, the state has one of the worst business climates in the country. If I can expand in (say) Nevada or Arizona rather than California, and that will help my bottom line, why won’t I? Senate President Pro Tem Darrell Steinberg says he’s looking to cut duplicative regulations (which is good), but it’s only a starting step. The reality is that deep and substantive cuts need to be made in the bureaucracy: Entire organizations should be eliminated or merged together to cut costs and help business.

Governor Jerry Brown, to his credit, is proposing eliminating redevelopment agencies throughout the state. That’s a good starting point. (I should mention that I expect lawsuits to be filed, and it’s likely the battle for cutting these agencies will take years. Still, you have to start somewhere.) State agencies should also be on the list. An obvious starting point is to merge the Board of Equalization (the agency manages all California taxes except income taxes and the Franchise Tax Board (the FTB manages income taxes). Sure, that would take legislation (possibly even a state constitutional amendment), but there’s no reason for two agencies.

Here’s a list of California state agencies. I challenge you to read through the entire list and not find ten agencies that should be either eliminated or merged into each other. (Yes, I realize that somewhere state law mandated these agencies come into existence. Well, nothing prevents the legislature from writing a new law (or constitutional amendment) to end these agencies.)

Here’s my list:

1. Board of Equalization / Franchise Tax Board (Merge)
2. Binational Border Health, California Office of (Elimination)
3. Boating and Waterways, California Dept. of / Boating and Waterways Commission, California (Merge)
4. Coastal Commission, California / Coastal Conservancy, State (Merge)
5. Consumer Affairs, Dept. of / Consumer Services Agency, State and (Merge)
6. Cool California (Elimination)
7. Corrections & Rehabilitation, Dept. of / Corrections Standards Authority (Merge)
8. Cyber Safety for Children (Elimination)
9. Apprenticeship Council / Apprenticeship Standards, Division of (Merge)
10. Arts Council (Elimination)

Government should be limited, and it should be focused. Yes, it’s a good idea for cyber safety for children, but that’s a parental responsibility not a responsibility for the state. I like museums, but it’s not the responsibility of the state to promote arts. Under the US constitution, the federal government is responsible for commerce with foreign governments, not individual states. It might be nice to have binational border health, but that’s clearly a federal responsibility. Cool California is an agency set up to battle Global Warming. Ignoring the fact that the theory of global warming is dubious, the laws of thermodynamics can’t be changed by a state; the idea that California can change the world’s climate is ridiculous. Finally, the merges within state organizations should be obvious.

And I only looked at the agencies in the A-C tab (and I likely missed some state agencies that should be eliminated or merged in the A-C tab). There are plenty of others in D-G, H-L, M-R, and S-Z.

I realize that this will be painful for California and for those who work are at these agencies. However, the residents of California have been the ones impacted by financial issues while the state blithely marches on using mainly accounting gimmicks. If Governor Brown and the legislature start proposing massive merging and elimination of state agencies, then I’ll know we’re no longer looking at the same old song and dance.

That said, I doubt real change is forthcoming.

This entry was posted on Monday, January 24th, 2011 at 4:49 am and is filed under California. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.