June 2004

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Guest Commentary

Billy Hamilton has taken leave from his post as deputy comptroller for the state of Texas to join the Schwarzenegger Administration to work on the California Performance Review. Since the early 1990s, A similar program in Texas has been credited with saving that state billions of dollars.

California’s state government is mired in a cycle of emergency and complacency, stumbling from one crisis to the next. It's consumed by the constant struggle to balance and justify the next budget, to take nips in programs here, tucks in programs there, and then put together a hodgepodge of tax bills designed to net the most feathers with the least amount of squawking.

Bureaucratic inertia continues the cycle, and any effort to break it will require courage, tenacity and the vision to move against the grain of business-as-usual. The average taxpayer, the disadvantaged child, the small business owner – these are the Californians who suffer the consequences.

The fat in state government isn't just sitting on the surface. It's marbled deep down through the structure of public policy, eating away at government's effectiveness and eagerly awaiting the next chance to bloat up the bureaucracy with a new program here or a hiring binge there. Too many outmoded patterns have been left in place. It's time for a permanent lifestyle change in Sacramento and only Governor Arnold Schwarzenegger can deliver this historic transformation for the people of California.

Does it Save Taxpayer Dollars?

Government's mission is fundamentally different from that of the private sector. Its responsibility to deliver services to those who need these services most, and it means that government cannot function with the same single-minded focus on the bottom line as a business. But government can and should strive to deliver the best service for every dollar taxpayers send to Sacramento.

This is particularly critical today. A tenuous economic recovery is under way, but many Californians have yet to see its benefits. They are in no mood to be saddled with new demands for more money, and Governor Schwarzenegger has made it clear that he opposes tax increases. Government's only option is to live within its means and cut costs whenever possible; this is the fundamental charge of the California Performance Review.

Does it Improve Customer Service?

One of government's most common errors is to lose sight of customer service. Agencies too often define their customers as the Legislature, elected officials or various interest groups. They forget that their purpose is to help and protect the people of California – the taxpayers who are their true employers and ultimate customers.

At the same time, state officials must realize that the front-line employees who do the actual day-to-day work of state government are customers, too – the real keys to effective government. Administrative structures should exist to make their jobs easier, not harder. To this end the California Performance Review will propose measures that improve working conditions and training opportunities for state employees to increase their effectiveness and help further the goal of high-quality, low-cost government for all Californians.

Does It Represent a Better Way?

California’s state government needs to find new solutions to the same old problems if it hopes to cut its costs and improve its customer service.

Charged with making state government work better and cost less, the California Performance Review has conducted a total review of government; its performance, its practices, and its costs. Government must be reengineered, it must be organized for the first time along the most efficient and effective lines, it must exploit new technologies, and it must eliminate overlapping structures that duplicate duties and create useless red tape.

There's no single rule for finding better ways to operate. Centralization and decentralization, for example, can improve efficiency, depending on the context.

But it's important to study the architecture of state government policies and programs in detail – to reshape, renew and reform them upon principles that bring real results.

Does It Make Government More Enterprising?

Government should be an instrument of public purpose, a humanizing impulse, an institution standing by our sides, not on our backs. But government must also be entrepreneurial if it hopes to provide the highest-quality service at the lowest possible cost.

An entrepreneurial government is eager to adapt the general spirit and specific methods of the private sector to public concerns. It runs to innovation and creative ways to work efficiently within existing resources. It considers profits as well as revenues. An entrepreneurial government makes the best use of other levels of government to further its mission. It works in concert with local governments. It fights for its full share of federal aid benefits.

Following the lead of Governor Schwarzenegger, the California Performance Review will issue a number of recommendations that will stress the maximum use of federal funding for state programs, particularly in the health and human services area. California doesn't have a tradition of performing well in this area, but there are ample opportunities to earn millions more in federal aid with little or no additional state commitment.

Does It Build a Better Future?

The financial crisis facing California has had many unpleasant effects. But one of its most dangerous legacies is the habit of looking only to the next financial quarter, rather than the next quarter-century.

The mechanics of stretching California’s battered revenue sources to meet new demands have so consumed policymakers that they are now confronted with an even bigger threat: losing sight of state government's ultimate responsibility to provide a decent education for our children, to care for the neediest among us, to protect the health of our elderly in the twilight of their lives and to contribute to an economic environment that can carry California into the future.

Indeed, the challenges California faces today in major policy areas – criminal justice, health care, public school finance – are often due to yesterday's short-sightedness, the failure to make the right investments to head off bigger problems at some later time. And now that time has come.

Soaring costs for corrections or health and human services carry a powerful message: if state government is to dodge the fate of being overwhelmed by spending demands, its policies must be radically changed. They must be anticipatory, acting instead of reacting, focusing resources on prevention rather than intervention.

It's estimated, for example, that every dollar spent on pre-school education saves nearly five dollars in education costs, criminal justice and welfare. Similar opportunities lie throughout government. Relatively modest investments today can head off crippling costs tomorrow.

At stake is nothing less than the path California will take in the years to come. Will it be one of high-skill, high-wage work? Or will it lead to low-pay, dead-end service jobs? Will Californians be disenfranchised and disenchanted by radical economic shifts? Or will we seize exciting new opportunities? What state government does right now will determine the social and economic topography of California on the map of the 21st Century.

The standard bearers of the status quo have honed their attacks through the years, and the fearful anti-change message they peddle has proved to be a powerful weapon. With the release of this report, that message will undoubtedly be brought forth from the arsenal again to "prove" that California hasn't really gained much ground at all.

Californians will find that the short-term and long-term proposals of the California Performance Review will, at the bare minimum, make state government more accountable to taxpayers and help it deliver high-quality services. The Performance Review’s report will also identify the continuing challenges facing California and point to a variety of responses that will work best as state government begins to change habits that have hardened over generations.

Governor Schwarzenegger’s success in reforming the broken worker’s compensation system and his budget proposal prove that he believes that the challenges facing California won't be overcome with conventional wisdom or facile solutions. The Governor has made it clear that we can reach out and shape the major changes of our day or let them wash over us in waves. With this in mind we must all join with him to create the first 21^st Century Government in America.