Infrastructure Agency: Monster of Efficiency or Bureaucracy?

Talk about blowing up boxes in state government.

The California Performance Review report commissioned by Gov. Arnold Schwarzenegger, in its most sweeping single proposed reform, recommends combining all the state's public works programs into one mammoth department.

This "super agency" would be charged with doling out up to 10% of the state's $103 billion budget in the areas of transportation, housing, energy, water resources and telecommunications.

On top of running existing programs, the new Department of Infrastructure would take over the related planning and financing in two divisions.

Would it work? No one knows.

The department would be larger than any comparable agency that exists in other states. While there are arguable merits to the idea-better coordination in planning and increased efficiencies that would save taxpayers' money, for example-there also are big question marks.

One is whether the agency's size would tend to stifle good ideas.

Another is whether citizens would have an effective way to challenge decisions that are made by the department.

"Fm not aware of any attempt to combine so many things into a single infrastructure agency," said Bob Stone, the Los Angeles-based partner with Public Strategies Group, a Minneapolis-based consulting firm. "Bigger is generally worse."

But it is possible to make a consolidated agency work, Stone said.

"If they can keep their eye on the ball-which is delivering infrastructure projects-and not get caught up in all the internal turf battles, then it has a chance," he said.

Currently, the report says, the state's infrastructure programs are scattered across 64 separate agencies, all reporting to different cabinet secretaries.

All the components of the new department would report to a single cabinet-level secretary of infrastructure.

"These multiple agencies result in a lack of singular accountability for infrastructure," according to the California Performance Review. "Infrastructure projects are not centrally managed or coordinated ... making it difficult to complete projects."

California's need for public construction work is daunting. A 1999 report from the California Business Roundtable calculated the state's unmet needs at $116 billion.

Among the shortcomings: the need for hundreds of new and expanded schools, thousands of miles of decaying roads and bridges, a power transmission grid stretched to breaking point and an acute shortage of housing.

(Under the proposal, school construction would remain separate from the Department of Infrastructure. Likewise, most housing is privately built, though California does fund affordable housing construction.)

While voters have approved more than $30 billion in school facilities bonds, and billions more in water bonds since 1999, the needs in other areas have only been exacerbated by the state's budget crisis. Voters earlier this year rejected an attempt to set aside 2% of the state budget for infrastructure projects.

"We have underinvested in infrastructure for decades now," said Mike Lawson, executive director of West Sacramento-based Transportation California, a group that includes contractors and unions. "If this report heightens the awareness of infrastructure, and, if as a result, we have more continuity in addressing our infrastructure needs, this proposed reorganization is a good idea."

But the sheer scope of what the California Performance Review is proposing, along with the expected turf battles the recommendations would bring, make creating an infrastructure department a daunting task.

"This is a pretty tall order," said Paul Lewis, a research fellow at the San Francisco-based Public Policy Institute of California. "There's going to be a huge level of resistance within the agencies that will take a very strong leader to overcome."

In coming weeks, the recommendation will be debated along with the rest of the California Performance Review report in a series of hearings.

Then a 21-member California Performance Review Commission appointed by Gov. Schwarzenegger will issue its own recommendations to the governor, who then will decide which ones he intends to support.

Most of the reorganization would need legislative approval.

Lawmakers have signed off on previous consolidation efforts-most notably the creation of the Business Transportation and Housing Agency nearly 20 years ago. But there may be resistance to placing an even more centralized bureaucracy in the hands of the governor.

Already, some Democrats have warned that the report represents a power grab by the governor.

"As we review the operations of government, we need to be careful that, in the name of efficiency, we don't shortchange the public's ability to influence its own government," Assembly Speaker Fabian Nunez, D-Los Angeles, said in a statement after the release of the report. "We need to be careful that we don't put too much control in the hands of the few at the expense of the many."

The governor has said that if lawmakers balk at implementing the proposals, he will consider bypassing the Legislature and taking a package of recommendations to the voters.