Coyote Blog

This chart is from a recent state audit report of Janet Napolitano's office at the University of California, an audit I already wrote about here.

Obviously Napolitano's office is particularly bad as compared to peers, but she has 1667 staff and spends over a half billion (billion with a B) just on the office of the President!  This is not in any way shape or form the total administrative size of the system - each university has its own administrative staff, for example.  This is just her central office.  This is a staggering number.  It equates to every student in the system paying over $2500 a year just for the central headquarters staff that they will never see, this is before the first dollar is spent on their individual campus -- or God forbid -- on teaching or academics.  To my mind this is way more of a scandal than her hiding a money reserve in various accounts.

This begins to get at a conflict I keep expecting to happen, but doesn't.  Time and time again, particularly in places like California, we find examples where agencies that are supposed to be serving the public are in fact diverting much of their resources to maintain the staffing levels, salaries, and rich benefits and pensions of their employees.  For years I have expected some sort of civil war on the Left, where Progressives figure out that providing things they care about (e.g. education, parks) is being limited by the huge resources that are being diverted to government employees.  Just look at the chart above -- California Democrats have twisted themselves into knots trying to find an incremental $50 or $100 million of funding for the California public university system, and here it is -- I can see an easy $400 million one could easily pull out of Napolitano's office.  Unfortunately, government employees and their unions are a big force in electing Democrats, and so they are reluctant to challenge these folks.  It is a classic example of "do you care about the things you say you value or do you care about power" and so far in places like California the answer has been "power."

Audit shows Napolitano's office hiding funds from the legislature

The University of California hid a stash of $175 million in secret funds while its leaders requested more money from the state, an audit released on Tuesday said.

The San Francisco Chronicle reported that the audit found that the secret fund ballooned due to UC Office of the President overestimating how much is needed to run the school system that includes 10 campuses in the state. Janet Napolitano, the former Department of Homeland Security chief, is in charge of the school system.

Napolitano denied the audit’s claim. She reportedly said the money was held for any unexpected expenses. Her office also denied the amount in the fund.

Pretty much the entire management team of California Sate Parks got fired for doing almost the exact same thing, with the exact same excuses

California state parks Director Ruth Coleman resigned and her second-in-command was fired Friday after officials discovered the department has been sitting on "hidden assets" totalling [sic] nearly $54 million.

The money accumulated over 12 years in two special funds the department uses to collect revenue and pay for operations: $20.4 million in the Parks and Recreation Fund, and $33.5 million in the Off Highway Vehicle Trust Fund.

The money accumulated, state officials said, because the parks department had a pattern of under-reporting the actual size of the funds in its regular dealings with the state Department of Finance.

Ms. Coleman (who I worked with a few times and liked) was frankly an easier "kill" because, while long tenured in the state parks job, she really did not have a lot of political muscle.  Napolitano does.  Relying on consistent standards would say Napolitano should go, but government has never been about applying consistent standards, only power.  So we shall see.

Yeah, I know it is not a done deal, but the rumors are that our governor Janet Napolitano will be Obama's choice for Homeland Security.

On its face, this both makes a ton of sense, and simultaneously is odd.  It makes sense because Napolitano is one of those rising Democratic stars who get special love in part for not being white males.  It is odd because pulling her up to Washington would, by law, pass the governorship for the next two years to the Republicans (the Secretary of State completes the term, and she is a Republican).  It also strikes me as odd because I think Homeland Security would be an absolutely awful platform for launching a run for higher office.  That job has no upside - it is all downside.

But the final reason in the end that this may make sense can be seen in this table below from Paul Kedrosky on projected state budget deficits as a percentage of state revenues:

Arizona is almost in as bad of shape as California, and California is a disaster area.  So the financial chickens are about to come to roost here in Arizona for the drunken spending spree the state has been on, presided over by Napolitano.  To preserve her from going to the Gray Davis Memorial Retirement Home for Failed Governors, Obama is likely to beam her up to Washington.

The Arizona Republic had this headline on the front of the business section this morning:

Arizona economy will get boost

Oh, is there some interesting structural change in the economy?  Did some local company get a big contract.  No, it turns out that the state government is going to reorganize some of its committees:

Gov. Janet Napolitano announced creation of a new non-profit on
Thursday aimed at improving the state's economy and reducing its
dependence on housing and construction.

The Arizona Economic Resources Organization, or AERO, will bring
together the state's "disorganized" business-recruiting efforts, she
said.

AERO's board of directors will include representatives of government
organizations such as the Commerce and Economic Development Commission,
private enterprise and the state's universities, the governor said.

Is there a single person who reads this and thinks to himself "Oh, that should help?"  Is this really what the Arizona Republic thinks boosts economies and creates value?  Some reorganization among the bureaucrats that run around doling out taxpayer money for relocations so the governor can claim to have boosted the economy, or God forbid, to have created jobs?  How about an income tax cut instead?

Just as an aside, I couldn't help but note this hilarious quote:

"The governor has taken some important and bold steps, probably steps
that we should have taken 20 if not 30 years ago," said Barry Broome,
president and chief executive of the Greater Phoenix Economic Council,
which he said has discussed representation on the AERO board with the
governor.

It's simultaneously "bold" and 30 years late.   Is that possible?

Update:  As to my last question, it probably is possible.  After all, actually limiting the Congress to the enumerated powers in the Constitution would be both bold and about a hundred years late.

Cafe Hayek has a fabulous fisking of Missouri governor Matt Blunt's letter to the editor explaining why his call for price controls on gasoline is consistent with his free market principals.  Its all good, I can't pick out any one quote.  Read it all.

But wait!  This just in!  Maybe our governor IS this dumb.

Our great benevolent leader, Janet Napolitano, has stated in press conference
the she is going to investigate these fuel prices of ours. Mostly she was
ruffling her feathers right after Hurricane Katrina shutdown a good 30% of the
domestic supply source. So of course prices increased slightly to account for
the lack of supply. This trend that followed exactly what even very simple
supply and demand theory would predict was not enough to convince miss Gov. J.No
not to call for yet another investigation. No way! She was not going to be
swayed by facts, reality or "assurances from the oil industry" that these were
fair market prices. Nope. An investigation was needed.

A little over a year ago, a pipeline broke and the only source of gasoline into Phoenix was stopped.  Due to EPA regulations, Phoenix requires a special gas blend made in only one refinery coming to us through one pipeline, so it is not surprising that if that source is interrupted, gas might be short here for a while and prices might spike up.  Which they did.  Governor Napolitano at that time blamed the whole situation on the oil industry and called for investigations.  Tellingly, she took only three policy actions:

• Temporarily waived regulations for a special blend of gas in Phoenix
• Temporarily waived regulations on truckers that were preventing them from filling in for the broken pipeline
• Considered circumventing regulations that were preventing a local refinery to serve the Phoenix market from being built.

So the rhetoric at the time was "its all the oil companies faults" but the solution was "repeal government regulations".  Hmmmmm.  By the way, the Commons Blog created a nice chart showing how those filthy rich oil companies are making, uh, ahem, lower profits than average for US industry (click to enlarge).  I wish they were more profitable- we would probably have a lot more oil.