Arnie's plan to fix up CA

BDB

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Story

Governor looks beyond budget, plans big government overhaul

Christian Berthelsen, Lynda Gledhill, John M. Hubbell and Victoria Colliver, Chronicle Sacramento Bureau
Friday, July 30, 2004
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Sacramento -- Gov. Arnold Schwarzenegger is preparing to shake up state government with a major overhaul that would significantly expand his own authority while saving the state $32 billion over the next five years.

As the Senate gave its final approval to the state's $78.8 billion budget Thursday, Schwarzenegger said the monthlong battle for the overdue spending plan gave him new resolve to reshape state government.

Schwarzenegger, who will sign the budget Saturday, has talked openly about asking voters to shake up the state bureaucracy. But in the immediate future, he will ask lawmakers to approve a radical overhaul of the state's government and health care system.

Next week, Schwarzenegger is expected to embrace a report by the California Performance Review team, which he formed in February to study how to reshape the size and scope of the government. According to copies of sections of the report obtained by The Chronicle as well as interviews with people who have seen the material and who spoke on condition of anonymity, the Performance Review team makes the following recommendations:

-- Eliminate more than 1,150 appointed positions in state government and nearly 120 boards and commissions.

-- Turn the state's 11 agencies and 66 departments into 11 departments with 63 new subdivisions.

-- Require public college students to perform community service.

-- Create a Department of Education and Work Force Preparation to set education policy from preschool through the postgraduate level.

-- Eliminate a third of the state workforce through attrition.

-- Reassign all state employees who "carry a badge" -- which could be anything from Fish and Game investigators to CHP officers -- to a single Public Safety and Homeland Security Agency.

In addition to the proposed government overhaul, the governor's plan for the $31 billion Medi-Cal program -- the biggest change to California's version of Medicaid in state history -- will be unveiled next week, as early as Monday. The federal-state program provides health coverage to 6.7 million low-income residents in certain categories, specifically children, parents, the elderly and people who are disabled and meet the eligibility requirements.

"It's very clear we need energy reform, we need prison reform, we need education reform and we need government reform. So we're going to work on all these issues," said Schwarzenegger, who was in Monterey to thank mayors for their work in securing a key piece of the final budget deal.

The Senate approved the budget 28-11. Enough GOP lawmakers signed on only after Sen. Ed Vincent, D-Inglewood, left the bedside of his seriously ill wife to fly up during the debate and cast the deciding vote.

The governor said he told his Cabinet secretaries Thursday that there would be no letdown now that the budget is done.

"There are certain things I want to accomplish before Nov. 17, when it is my one-year anniversary," he said. "There are certain promises that I made, and I am very adamant to keep those promises and to keep grinding away, literally with no vacation."

Schwarzenegger's desire to put his full weight behind such radical reforms allows him to return to what made him so popular with the electorate, said Jack Pitney, a government professor at Claremont McKenna College.

"This is reclaiming the mantle of reform," he said. "It reminds lawmakers that he is at his strongest when he can play the outsider role."

Schwarzenegger begins that next chapter today, when he travels to Orange County to thank voters for their support during the budget stalemate and ask for their continued help.

There is a risk, however, in trying to work with lawmakers and threaten their existence at the same time. Assembly Speaker Fabian Nuñez, D-Los Angeles, said lawmakers would react strongly to an overhaul of the Legislature that has not been endorsed by both parties.

"If constitutional scholars ... decide it would help democracy, that's one thing. But if it's just something someone wants to do because they think it is good for them politically, I don't think that would make sense," he said.

Pitney suggested Schwarzenegger could use the threat of a part-time Legislature to get them to go along with his other ideas, but Nuñez bristled at that notion.

"If the intention is to bully the Legislature, then put it on the ballot, and we'll fight against it," he said.

The Performance Review team's reforms follow the federal model of government, with the executive branch holding tremendous power over government functions through appointments and policy positions.

While the numerous boards that would be eliminated now consist of gubernatorial appointees, they remain semiautonomous agencies, something that would change if all their functions were transferred to the executive branch.

Some departments are even expected to adopt the same names as their counterparts on the federal level, such as the proposed Public Safety and Homeland Security Agency. Another, which will handle all aspects of the state's finances, will be called the Office of Management and Budget.

The plan envisions state government savings of $32 billion over five years, or about 6 percent per year, out of the entire $105 billion budget, which includes bond and special funds. That would include $11.2 billion of savings in the general fund, which this year is $78.8 billion. The amount to be saved is much smaller than some had anticipated.

"There's a lot of stuff moving from box to box, but no boxes are being destroyed," said one person who reviewed the plan.

Still, an administration official said a 6 percent savings would resolve the imbalance between spending and revenues and that it was nothing to dismiss.

"If I lost 6 percent body fat, I'd look a little better," said Rob Stutzman, Schwarzenegger's director of communications.

Complete details of the Medi-Cal overhaul are not yet available, but it is expected to save the state about $400 million by asking beneficiaries to pay more for services, shifting more people into plans managed by Medi-Cal and restructuring the way hospitals are reimbursed.

For Medi-Cal patients, this could mean having to pay new or higher copayments for doctor visits, prescription drugs or other services or even a monthly premium. Hospitals might be required to adhere to stricter accounting for their expenses, which might reduce the amount of money they receive from the federal government to treat uninsured patients.

Advocates for hospitals, patients and doctors fear the proposed cuts will damage the already struggling health safety net and add to the state's 6.4 million uninsured.

"The need is growing, not shrinking, and yet they are shrinking the resources," said Rachael Kagan, spokeswoman for California Association of Public Hospitals and Health Systems, whose members rely heavily on Medi-Cal for support.

According to Schwarzenegger's staff, the redesign will make the system more cost-efficient without affecting the eligibility requirements. Medi-Cal costs have increased 40 percent over the past five years, spurred by increased enrollment along with overall higher medical costs.

The federal government provides about half the money for California's Medi-Cal services. In order to deviate from current federal Medicaid regulations and make the changes, Schwarzenegger must apply to the federal government for a waiver.

On Monday, the governor is expected to submit a proposal -- potentially in the form of a waiver along with a bill that would change state law to accommodate the changes -- to the Legislature. If state lawmakers do not act on his request before their Aug. 31 recess, Schwarzenegger may go ahead and ask the federal government for the waiver in September and then seek legislative approval later.

The time line for the performance review is much longer. Schwarzenegger has appointed a commission to hold hearings with public input on the proposals this summer and fall before a final document is submitted to the Little Hoover Commission for review. If the commission approves it, the Legislature still has the power to overturn it with a two-thirds vote in either house.

But if lawmakers reject the plan, Schwarzenegger could take it directly to voters, asking them to implement his changes by amending the state constitution.

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At a glance
Here are some highlights of what Gov. Arnold Schwarzenegger's Medi-Cal reform panel is proposing:

Contributions from beneficiaries: Ask beneficiaries to pay for a larger share of the goods and services they receive, such as doctor visits or prescription drugs, saving the state $400 million per year.

Standards: No change to eligibility standards.

Hospital accounting: Hospitals would have to employ more strict accounting standards, potentially reducing their government reimbursements for treatment of the uninsured.

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Reshaping state government
Highlights of the report by the governor's California Performance Review team:


BUREAUCRACY
Commissions and appointees:

Cuts 118 of the state's 339 boards and commissions and more than 1,150 political appointees, while consolidating their functions under the executive branch.

Consolidating agencies:

Eliminates a multiplicity of agencies with authority over certain areas such as energy and taxation, and consolidates their functions into single departments.


SPENDING
Budget cuts: Reduces state spending by $32 billion over five years, or an average of about 6 percent per year, including a project savings in the current budget year of more than $1 billion.
 

Backcountry

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Yeah, I read that this morning, and I'm not sure what to make of it except that it sure can't be any worse than the current status quo. Heck, maybe it will work! What I *REALLY* like about it though is that it's making these career Democrat politicians have to actually do some work, which in turn takes time away from all their pet social engineering malarky.

For the record, I voted for the recall, but not for Arnie... Tom McClintock was, and still is, my man.

Backcountry
 

BDB

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Being a Canuck and all I can't vote, even in the state that I have resided in and payed taxes in for the last 6 years. I can understand not being able to vote in a federal election but I should be able to vote state as I am a LEGAL resident of this state. Oh well, what can you do, one of these days (when I am entitied to) I'll probably do the citizen thing. At least then I can get called for jury duty
 
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<div class='quotetop'>QUOTE </div>
For the record, I voted for the recall, but not for Arnie... Tom McClintock was, and still is, my man.[/b]
I love Tom too, and have been a fan of his when most folks didn't even know who he was....but I voted for Arnie because I didn't want to split the vote. I hope Arnie pulls this off. More streamlined governement has to be more efficient and more cost effective. Redundancy and unneeded agencies are a real drain. This manuever in and of itself should save us quite a few bucks!
 

Marty

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All I want to hear the Governor say to the politicians on Capitol Hill is:

You're all going to have to do more with less.

That's what I've been told over the last decade. Now it's time for the politicians to stop taking more taxes and giving less back to the public. Each day I go to a public agency office, either the hours or the staff have been reduced. What a scam.
 
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That's the problem when you have a de facto "business" without a profit motive....no need to increase productivity or efficiency.

All the C players cut by the private sector are sitting behind the desk at the DMV.
 

LeeChul

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Well, all I can say is at least he's making an effort. I didn't think he would ever lift a finger. I thought it was all going to be a popularity thing for him. But Props to the Govenator for trying, -not that it will work though.

I do like the idea of public college students doing community service. Maybe it will install a sense of how a community should function into the students who will soon be forming communities of their own.
 
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