Can or Will Brown Fix This?

By Bruce Bialosky
Monday, January 31, 2011

Jerry Brown pitched Californians on the concept that he was the right person to heal California’s woes because of his experience. He admitted that at 72 years of age, this was the last stop of his political career and so he could fearlessly confront the state’s daunting challenges. Not only does Brown have to lasso an out-of-control budget, he must also straighten out a dysfunctional government.

Mark Neuman contacted me after reading my column, “California Demise,” which focused on the budget and other problems in the state. Mr. Neuman, a CPA in Southern California, has a tale to tell of just how inept state operations have become.

Neuman attempted to file a Statement of Information form with the Secretary of State for a California-based Limited Liability Company (LLC). Forms like these are routinely filed in every state for entities like corporations and LLCs in order to maintain a public database of current information. As a result, any resident of the state can look to see the company is properly registered and also to determine who might be hiding behind that entity’s name. Neuman files these forms for other companies with many states around the country, usually without any problems.

In early July, Mr. Neuman dutifully filed his company’s form with California’s Secretary of State. At the end of November, he received a letter from that office with his form and his check. It stated that his check was not honored by his bank. The reason it wasn’t honored was that the bank will not accept any checks older than 90 days. Incredibly, the state had not processed his paperwork within 90 days of receipt and now was asking him for a new check. Not only did the state want a new check, but this time they were insisting upon a cashier’s check.

Furthermore, while the original check was for $20, now they were demanding $30. Because the state cannot handle its business in a timely manner, it was forcing a taxpayer to pay a penalty as well as endure the time-consuming process of getting a cashier’s check -- for which his bank would charge him a fee. Neuman tried to contact the Secretary of State’s office, but no one answers the phone and the recording says you should not leave a message. In other states, he could have easily filed this form online, but Secretary of State Debra Bowen has not been able to get this simple procedure computerized yet. And she was reelected by 1.4 million votes.

There are so many things wrong with this scenario that we could be dumbfounded for weeks, but let’s just hit the high points. First, the brazenness of state employees to put the blame on Mr. Neuman because they cannot handle their responsibilities (and, incidentally, never apologizing) is indicative of why people hate government today. Second, that a flat-broke state sitting with thousands of envelopes containing checks (albeit minor amounts, but money nonetheless) cannot get a couple of employees to open the envelopes and log the payments is astonishing. Third, the fact that a new letter was prepared asking for an additional $10 -- which actually costs more than $10 to prepare and send --is literally mind-boggling. If they just did it right the first time this wouldn’t have happened.

The bigger picture is that this is part of an orchestrated effort by government at all levels in California and other states to demand more money from taxpayers. What does that mean? You are probably aware that whenever there is a potential cut in public services, politicians predictably threaten to impose reductions in police, EMTs or firemen. They never cut middle management or non-essential services. Near my home there is an abandoned car that’s been sitting on a particular street for over a month. I went through all the channels with no results until I called my Councilman, Paul Krekorian. The first thing his staff person said was “… because of all the cutbacks.” I replied, “You have a $4.4 billion budget. You should be able to pick up an abandoned vehicle. “ But they want you to think that they’re broke when they still spend endlessly in pointless conferences and on useless boards and politically-correct commissions.

In California, it is virtually impossible to get anyone on the line at any consumer-based agency. The Franchise Tax Board (which handles income tax) and the State Board of Equalization (which handles sales tax) are almost unreachable. You would think they would place a high priority on having people available at revenue-producing agencies, but they just don’t think that way.

They will tell you that there have been personnel cutbacks, which is true. What they will not tell you is that the level of personnel per 1,000 residents after the cutbacks is still higher than every year from 1985-1999. During those years, service agencies in California worked quite well, and you could actually speak with someone on the telephone. One might think that with the increase in population – along with the huge advances in technology in the last decade – we would need fewer personnel because of the economies of scale. Instead, we have an utterly dysfunctional government.

What now exists is a non-responsive government that is at war with its residents. Public employees receive inflated wages and absurdly-high benefits, and they are making life as difficult as possible for a citizenry that wants to reduce government compensation. If you think this situation is unique to California, you are seriously mistaken. Jerry Brown has no idea what he is facing when he becomes Governor. But then again, I recently heard stories about the chaotic state of the Attorney General’s office, which was his last gig. Maybe he should start there.