Reviving the Reform

California Performance Review still packs a punch

From seven Mr. Olympia titles to his role as “Conan the Barbarian” to his fleet of Humvees, Arnold Schwarzenegger has always been larger than life. This grand persona was even evident as he unveiled his massive California Performance Review plan a year ago today. Sadly, his follow-through on government reform has been less than Herculean.

To advocates of reform, the California Performance Review – Schwarzenegger’s centerpiece effort to reform state government – was to be a watershed moment in state history. The performance review proposed a top-to-bottom reorganization of government, eliminating more than 1,100 political appointees, and recommended more than 1,400 policy reforms to improve and streamline how government operates. The plan was so ambitious that conventional wisdom said a special election would be needed to enact many of the reforms.

As months passed, talk of a special election grew but the governor’s focus shifted to other reforms – redistricting, fixing the state’s hemorrhaging taxpayer-guaranteed pensions for government employees, merit pay for teachers and a water-tight spending limit. California Performance Review reforms seemed, in comparison to these common-sense reforms, relatively insignificant and too “inside baseball.” When the performance review’s reforms didn’t make the cut for the special election, many supporters still happily focused on the administration’s new priorities.

But more and more holes quickly appeared in Schwarzenegger’s “year of reform” election package. The water-tight spending limit that was promised morphed into a milquetoast plan that, while offering important mid-year budget-cutting authority to the governor, does not adequately confront the state’s spending addiction. The desperately needed reform of taxpayer-backed pensions for government employees shifted from a publicly supported winner into a political fireball due to a drafting ambiguity. The promise to enact merit pay for teachers disappeared. And now, it is possible that the cornerstone of Schwarzenegger’s reform agenda, his effort to reform how state political maps are drawn, may also fall off the ballot because of a drafting error.

It seems the “year of reform” offers little reform at all. Many are wondering, what, if anything, is Gov. Schwarzenegger willing to really fight for? If he is serious about reforming government and restoring the luster to his dulled political persona, Schwarzenegger must do two things.

First, he must resist the calls of critics, and some political allies, to dump the special election. While the momentum of the special election has diminished, there is still one mega-issue on the ballot that deserves Schwarzenegger’s complete support. Paycheck protection, which would require government employee unions to get the affirmative permission of members to collect and spend dues for political purposes, now moves to center stage in the reform battle. The governor needs to be right there with it.

Second, Gov. Schwarzenegger is most effective when he acts like Arnold the bodybuilder – big, bold and committed to results. So he should dust off the performance review and select a few key reforms to move forward when the legislature returns in August.

California still owns golf courses, stadiums, beach houses and prime commercial real estate. An aggressive effort to sell off these properties could, according to California Performance Review estimates, generate as much as $4 billion.

There are still more than 220 boards and commissions in the executive branch with little accountability to the public. Some of the most egregious boards, such as the Integrated Waste Management Board, still pay more than $100,000 to their politically appointed members.

And the state still inexplicably has four tax collecting entities: the Franchise Tax Board collects personal income tax; the Board of Equalization collects sales tax, the Employment Development Department collects payroll taxes; and the Department of Motor Vehicle collects the car tax. Consolidating these functions would save money and improve service to the public.

Billions of dollars in reachable reforms exist for Gov. Schwarzenegger to pluck if he so chooses. Not only would it deliver real reform to California but it would serve as a call to his supporters, and the public at large, that he will follow through on his promises and fight for the reform he has talked about since his historic election. That is the Arnold we are looking for and the one we elected in 2003.

George Passantino is a senior fellow at Reason Foundation and served as a director of the California Performance Review in 2004.