Presentation to Conference Committee on the Budget

"All general fund capital projects must be deferred. Construction ceased on this Capitol building for a long period of time for lack of funds. When prosperity returned, work resumed. And by the way, that should also include all furniture acquisitions, vehicle acquisitions, all remodeling. It also means no new hiring. And for Heaven's sake, halt all major computer and
computer software acquisitions until we establish some sort of competence to our oversight mechanisms.

"Meanwhile, an immediate moratorium should be placed on long-term debt instruments. Debt service is rapidly consuming an increasing portion of this and future budgets. When you've just lost your job, you don't take out a home improvement loan.

"New programs and program enhancements initiated this year and last year should be immediately deferred.

"Next, identify and eliminate state bureaucracies that merely duplicate agencies at the federal or local level - or that merely duplicate private agencies. These are functions that are being performed anyway - perhaps not precisely as we would like, but that are still being performed and will continue to be performed while we take a break to get our house back in order.

"For example, Cal-OSHA and Cal-EPA are entirely duplicative of the Federal OSHA and the Federal EPA. We have parallel state and federal banking agencies. There has never been an evaluation, to my knowledge, of the extent that our state agencies simply duplicate federal functions.

"Meanwhile, many state agencies needlessly duplicate the functions of local governments. The State Architect's office, duplicates local planning department functions. The state fire marshal duplicates local fire department functions. It is human nature to want to have a hand in everything. But we don't have the resources to do that. Removing duplicative jurisdictions and agencies is an important place to start.

"And finally, we need to eliminate the duplication of functions that private interests perform anyway. An example: the entire Trade and Commerce Agency simply duplicates what the Chamber of Commerce and other business interests used to do on their own - with their own money.

"The liquidation of idle state assets would produce considerable one-time savings. I would begin with acquisitions made over the last two years. When a family sobers up after a spending binge, sometimes it has to return the stuff and say, "we just can't afford this right now until we're back on our feet."

"The major area of savings - and increased service - is in the operational changes available to the budget. For example, according to a Legislative Analyst's Office analysis from 1997, a pre-paid, refundable tax credit could replace the entire Healthy Families Program, providing greater coverage to far more people at vastly lower cost. Classroom-based accounting systems could dramatically reduce the enormous amount of education dollars that are absorbed into the bureaucracies. Conforming state prevailing wage law to the Federal Davis Bacon Act would save several hundred million dollars annually. By the way, those measures have been before the legislature this year, but have been killed.

"I would suggest a special session of the legislature immediately following the budget that does nothing but intensely evaluate every programmatic change available to us."