Sacramento Finds Small Savings Count Now

SACRAMENTO —  Not long ago, it would have been hard to find much outrage in the Capitol over the state shelling out $125,000 to give away teddy bears at the DMV. Or $266,000 for lawmaker lunches and dinners. Or $800,000 to house four sexual predators in the Inland Empire.

Not any more. Sacramento is undergoing an attitude adjustment.

Once dismissive of rooting around for nickels and dimes, state legislators are overturning as many Capitol cushions as they can in a hunt for spare change.

Lawmakers, facing a projected $14-billion budget shortfall and a skeptical public, have a new theme -- each dollar counts.

“We want to make sure the money goes where it needs to go,” said Assembly Budget Committee Vice Chairman Rick Keene (R-Chico).

So far it has been more talk than action. Legislative decisions on where to cut won’t come until later this spring.

But there is reason to believe this year may be different. Lawmakers know that voters now expect more oversight. They want to erase the idea that reckless spending is the norm in Sacramento. And they want to make sure not to give Gov. Arnold Schwarzenegger more opportunities to bash them.

The reasons are political, practical and even philosophical as tiny items and small sums are suddenly living large at the Capitol. Like the $36,000 the state spent on a Swedish wheelchair for a Medi-Cal recipient. Or the $275,000 spent to adorn a freeway sound wall with sculptures and carvings.

While lawmakers want taxpayers to know that they still plan to tackle the multibillion-dollar issues that caused shortfalls to soar, they also want the public to know they got the message from last fall’s recall.

That election has changed the dynamics of negotiating a state budget. Schwarzenegger was elected on a platform of cleaning up government waste, stopping reckless spending and bringing an end to partisan bickering.

Democrats initially rejected the new governor’s claims of waste and abuse of tax dollars as overblown. Now they realize there may be more to gained in working with him. Most Democrats are convinced that it will be necessary to raise taxes this year. But to win public support, they acknowledge that they must first cut the fat.

The reviews began with the governor’s call for an audit of the state’s books, which administration officials say will uncover substantial waste by the summer. Schwarzenegger later signed an executive order launching his California Performance Review initiative. He describes it as “a total review of government; its performance, its practices, and its costs.”

Now, Assembly Democrats are holding their own special hearings into government waste -- exhaustive discussions in which lawmakers and bureaucrats talk into the afternoon about the smallest spending decisions. Senate Democrats are following suit.

“These legislators went through a period of time when they didn’t care what the voters thought,” said Republican political consultant Allan Hoffenblum. “Now they do. Even if they disagree. They don’t want to come across as obstructionist against a governor trying to root out waste and inefficiencies.”

A poll earlier this year by the Public Policy Institute of California revealed that two-thirds of voters believe state government spending could be cut without an impact on services. And a third of that group believes it could even be cut by 20%.

Some Democrats are wary. “There are angry voters who believe there is lots of government waste out there. No one would deny there isn’t some,” said Board of Equalization Chairwoman Carole Migden, a Democrat. “But it’s hardly worth all the fancy titles of these commissions they are forming to find it.”

No cost is too small for the scrutiny of these commissions. Not the $5 million the state pays in assistance to Filipino American veterans of World War II who are no longer living in California. Not the $2-million state webpage. And not the $400,000 the state Department of Forestry and Fire Protection allegedly uses on a plane to shuttle its director around.

Anti-tax groups are still talking about the $175,000 the Department of Motor Vehicles spent on teddy bears it gave away in an effort to encourage Californians to participate in Census 2000.

Sometimes, state officials feel frustrated when questioned about the misuse of funds.

Sen. Jeff Denham (R-Salinas) recently released a list of state-owned properties he characterized as “ridiculous real estate ventures at a time when the state is in dire financial circumstances.”

Some of the state agencies that owned the properties had an explanation. Yes, the state owns a massage parlor. But it acquired the property so it coud demolish it to build a freeway. And the Oakland golf course in the possession of Caltrans? It will soon be a park-and-ride lot.

Officials at the Department of Developmental Disabilities were puzzled over how a government report alleging that it unnecessarily paid for some private swimming lessons evolved into charges that it is building pools in people’s homes.

Assembly Budget Committee Chairman Darrell Steinberg (D-Sacramento) says part of the reason his panel is holding hearings on government inefficiencies is to untangle the rhetoric from the reality. “We are not relying on anecdotes,” he said. “We are digging deeper.”

Even so, Steinberg is eager to show the public results quickly. At each hearing, he brings a big board that reads, “Budget Oversight Results Chart -- General Fund Savings,” and a marker to fill in how much the hearings have saved the state.

“I kind of went in with the expectation that in one hearing we would be able to put a savings number up on the board,” he said. “What I realized is this is hard work, and not necessarily headline-grabbing. And not work that yields instant results.”

Yet the hunt for small change is not just political; it’s also practical. Some say all those nickels and dimes will add up to real budget savings.

Carl DeMaio, president of a San Diego-based fiscally conservative think tank called the Performance Institute, argues that billions of dollars can, indeed, be saved.

Last year, not many lawmakers were interested in listening when he presented the group’s Citizens’ Budget, a Libertarian-leaning blueprint for saving money in Sacramento. Democrats called DeMaio a Republican shill. Even Republicans, he said, mostly tossed it in the recycling bin.

“I thought, ‘This town is more messed up than I thought,’ ” DeMaio said. “Many of these ideas should have been no-brainers, and they didn’t want to talk about them.”

Then the recall happened. And the Citizens’ Budget became a must-read item in many circles. DeMaio said the Schwarzenegger administration asked for 100 copies, and officials have pasted some of the pages on the wall as they work on the California Performance Review -- a Schwarzenegger directive to study all the places government can be more efficient.

“It’s become a playbook for saving money,” DeMaio said last week from Stockton, where he was invited to speak at a GOP legislative retreat.

Many of his ideas are non-starters for Democrats because they call for privatizing everything from prisons to healthcare, and deep cuts in assistance to low-income and elderly Californians.

But his smaller-scale ideas are gaining traction. After the governor forfeited his own six-figure salary, some lawmakers are picking up on DeMaio’s suggestion that they look at their own perks. Legislators earn $99,000 a year, plus $125 a day while they are in Sacramento -- ostensibly to cover housing and meals.

Yet tucked into the budget is another $266,000 worth of bills for legislative lunches and dinners. DeMaio says that needs to go.

At the governor’s California Performance Review offices, teams of volunteers are sorting through hundreds of suggestions for saving money that are coming in through calls, e-mails and word of mouth.

While the lofty goal of the group is restructuring the government to save money, no idea is too small. Administration officials were delighted recently by a tip that led to the State and Consumer Services Agency canceling an order for 61 Dell computers it did not need.

Some, meanwhile, have been able to use the sudden interest in putting every dollar the government spends under a microscope to advance a philosophical agenda. Some anti-union groups noted that the governor could save $4 million by killing funding for a labor studies program at the University of California. They were delighted when he did so.

The budget crunch also has added fuel to Republican charges that the state goes too easy on convicted sexual predators. Assemblywoman Sharon Runner (R-Lancaster) questions why the state is planning to spend more than $800,000 to house four of them in her district after they are released from a nearby prison.

Finance Director Donna Arduin found a more costly example: $722,000 to track, monitor and house one released child molester 24 hours a day, who she says “should have never been let out onto our streets.”

Democrats, however, counter that forcing those felons to sit in jail forever is a costly, and not always legal, solution.

From wheelchairs to sound-wall art to legislative lunches catered by Frank Fat’s Chinese restaurant in Sacramento, a bipartisan move is afoot to put every state expenditure under a microscope.

“Folks here are finally beginning to get the fact that the problem is not going to go away,” said Assemblyman Joe Canciamilla (D-Pittsburg), a leader of a bipartisan group working on budget solutions. “Simply hoping for it to get better next year isn’t a practical alternative.”