It’s one of the standard allegations thrown at any new ballot initiative that starts a new program – “this initiative will establish an expensive new bureaucracy,” we are told. Now it’s being used against Prop 29 – because it makes political sense.
But there’s a policy problem. When you spend big money, you need some bureaucracy.
The real question about Prop 29, and similar initiatives, isn’t whether they would create too much bureaucracy.
It’s whether they create too little.
For evidence, think back to Prop 71, the successful 2004 initiative to establish a state stem cell research agency.
Its authors carefully crafted the measure to try to counter the “expensive new bureaucracy” argument. Provisions in Prop 71 put a limit on how much of the bond money in stem cell research should go to administration. It also capped the number of employees of the new state agency at 50. And because this was a California initiative, those numbers were locked in.
Guess what? The stem cell agency has had all kinds of administrative difficulties. Outside experts who have studied it have questioned again and again whether such a small agency has enough bureaucratic bandwidth to manage $3 billion in bond moneys and some very cutting-edge research. The agency has been criticized severely for hiring expensive outside contractors – even though such outside hiring was forced in part by a cap on employees.
For those who have observed the agency up close, it’s clear that without the restrictions of the initiative, the agency would be better run and would waste less money.
This should be a lesson for voters considering Prop 29: fear of bureaucracy is misplaced. For all the No on 29 ads mentioning bureaucracy, voters should have more concern about whether Prop 29 would establish enough bureaucracy.
The initiative tries to save on bureaucracy by giving considerable power over the fund to existing entities: the controller, the board of equalization, the treasurer. The initiative does set up a fund for cancer research and establishes a committee to oversee it. That committee can hire a CEO and a staff, but there is a clear limit on administrative spending: not more than 2 percent of revenues. Will that be enough?
I don’t know. But it’s worth remembering that the stem cell agency’s administrative spending cap was 6 percent.