California Governor Jerry Brown recently issued Executive Order B-2-11, which “directed all state agencies and departments to immediately halt new car purchases and turn in taxpayer-funded cars that are not essential to state business,” in an effort to reduce the state’s vehicle fleet by 50 percent. This is an ambitious target and meaningful reform that if accomplished would reduce government spending both immediately and in the long run by reducing expenses in fuel, insurance and maintenance.
The California Department of General Services estimates there are approximately 11,000 passenger cars and trucks in the state fleet, and approximately 4,500 home storage permits that don’t serve a health or public safety function.
Executive Order B-2-11 requires agencies and departments to review every fleet vehicles’ purpose, necessity and cost-effectiveness. Agencies must also submit plans to sell excess vehicles and complete the sales within 120 days of the plan’s approval.
In the corresponding press release, Brown said:
There is a lot of wasteful spending on cars that aren’t even driven. And (California) can’t afford to spend taxpayer money on new cars while (it) faces such a massive deficit… Fifty percent is a starting point. If we find more waste, we’ll make more cuts.
Gov. Brown is continuing a policy that began under former California Governor Arnold Schwarzenegger. In 2009, Schwarzenegger signed Executive Order S-14-09, which eventually removed 3,900 vehicles from the state’s fleet and eliminated 2,000 permits that allowed employees to take fleet vehicles home. The Schwarzenegger Administration calculated that Executive Order S-14-09 generated more than $6.4 million in vehicle sales revenue, while reducing ongoing expenses in fuel, insurance and maintenance.
California faces staggering budget deficits of approximately $20 billion each year through 2015-16, and reducing the state’s vehicle fleet is a tenable step towards balancing the budget. Reducing the vehicle fleet won’t solve all the state’s budget woes, but it could result in meaningful savings and is an example of the type of common-sense budget reforms that can help get California back on the right fiscal track.
Gov. Brown could realize further savings by privatizing California’s vehicle fleet operation, maintenance and management. Privatization of vehicle fleet services is becoming increasingly common. In fact, states like Texas, Virginia and Louisiana have recently introduced privatization of vehicle fleet services.