California Performance Review Proposals Would Fall Short of Cost Savings Estimates, Report Says

The California Performance Review overstates the amount of potential savings to the state government, and its recommendations would not significantly reduce the state budget deficit, according to a report released Aug. 27 by the nonpartisan Legislative Analyst's Office, the Los Angeles Times reports (Halper, Los Angeles Times, 8/28).

The review proposes eliminating or consolidating more than 100 boards and commissions and modifying state business practices to save the state $32 billion over five years. The report aims to save almost $5 billion over five years by making changes to the Health and Human Services Agency (California Healthline, 8/23).

According to the LAO report, if all the recommendations in the review were adopted, the savings to the state would be about $10 billion to $15 billion -- less than half of the review's overall projected savings. In addition, many of the policy changes in the report previously have been proposed and did not receive strong legislative support or would require a "substantial investment up front," the Los Angeles Times reports.

Brad Williams, co-author of the LAO report, said that the review "is not a magic bullet that gets us out of having to make hard choices. We don't think the adoption of this plan would materially reduce the size of the budget shortfall that continues to face the state government." He added, "When you get down to the specific proposals in their report, we just don't see how it translates into more money."

Assembly Budget Committee Chair Darrell Steinberg (D-Sacramento) said, "There are no panaceas out there. Just moving an organization around doesn't solve the problem."

CPR officials declined to comment on LAO's report, saying that senior staff members had not reviewed it. Ken Hunt, a spokesperson for the review committee, said, "We're certainly open to hearing input from all groups, including the analyst's office. We'll be working with them to answer their questions and refine the numbers" (Los Angeles Times, 8/27).

In related news, the Contra Costa Times last week examined proposed changes to HHSA. According to the Contra Costa Times, administration of Medi-Cal and other social services programs is "cumbersome, frustrating and inefficient." However, the review is "hardly the first" to propose changes to the programs, and its proposal to determine Medi-Cal beneficiaries' eligibility and administer many of the applications online could eliminate almost 16,921 county jobs, the Contra Costa Times reports.

Jessica Bartholow, director of education and advocacy for the Alameda County Community Food Bank, said, "There's no doubt that the current system is not working, but that doesn't mean that what's been proposed is the solution."

John Cullen, director of Contra Costa County Employment and Human Services Department, said the review "seriously underestimates the complexity and the impact of making major changes in these programs." However, he noted that the report indicates that Gov. Arnold Schwarzenegger (R) is willing to consider making changes to the current system. Cullen said, "If we can take some time discussing those issues and coming up with realistic solutions, I think things can be better" (Steffens, Contra Costa Times, 8/30).