The 2020-21 Budget: Governor’s Proposal to Transfer the Seismic Safety Commission

The 2020-21 Budget: Governor’s Proposal to Transfer the Seismic Safety Commission Summary Departmental Responsibilities for Seismic Safety. Various state departments are involved in seismic safety. In particular, the Alfred E. Alquist Seismic Safety Commission (SSC) is an independent entity under the Business, Consumer Services, and Housing (BCSH) Agency. SSC—which is composed of 20 commissioners—advises the Governor, Legislature, and state and local governments on ways to reduce earthquake risk and conducts other related activities. Additionally, the Office of Emergency Services (OES) is a cabinet-level department that coordinates planning, response, and recovery activities related to disasters such as earthquakes. Governor’s Proposal. The Governor proposes budget trailer legislation that would make various changes related to the SSC, including reorganizing it into a unit within OES and reducing the number of commissioners from 20 to 15. The Governor also proposes to transfer SSC’s funding and positions to OES and provide SSC with a net augmentation of $949,000 from the General Fund in 2020-21 and $713,000 from the General Fund on an ongoing basis beginning in 2021-22. LAO Findings and Recommendation. We find that the Governor’s proposal presents important trade-offs for the Legislature to consider. For example, while the proposal could achieve some efficiencies, it reduces SSC’s independence, which has been a priority for the Legislature in the past. Accordingly, we recommend that the Legislature require the administration to answer some key questions about the reorganization at budget hearings this spring, such as whether and how SSC’s independence would be preserved under the new structure and which entity, if any, will be the lead agency accountable for earthquake preparedness under the new structure. With these answers, the Legislature would be better positioned to assess whether the Governor’s proposal is consistent with legislative priorities. GABRIEL PETEK LEGISLATIVE ANALYST FEBRUARY 2020 analysis full gutter 2020-21 BUDGET BACKGROUND Key State Departments OES. OES is a cabinet-level department that coordinates planning, response, and recovery Involved in Seismic Safety activities related to disasters. For example, OES Alfred E. Alquist Seismic Safety Commission prepares the state’s Hazard Mitigation Plan, which (SSC). In 1975, the Legislature created the identifies the main types of disaster risks facing 17-member SSC led by an appointed Executive the state—such as earthquakes—and proposes Director to advise the Governor, Legislature, and strategies for mitigating these risks. During a state and local governments on ways to reduce disaster, OES is responsible for coordinating the earthquake risk. In support of its mission, the state’s response activities under the California SSC conducts various activities. In particular, it Emergency Services Act. Additionally, OES prepares studies on issues concerning seismic administers state and federal funds that are safety. Additionally, SSC sponsors legislation and provided to help communities respond to and takes positions on measures before the Legislature recover from disasters. Furthermore, OES provides related to seismic safety. oversight over emergency communication systems, In 2006, Chapter 532 (SB 1278, Alquist) including the earthquake early warning system. made various changes to the SSC. For example, Other Departments Involved in Seismic Safety. Chapter 532 added three more members to the There are a number of other entities within state commission, bringing the total membership to 20. government that have roles and responsibilities Of these 20 commissioners, 15 are appointed by related to earthquakes. For example, the California the Governor and confirmed by the Senate; 1 is Geological Survey (CGS) provides research, appointed by the Senate Rules Committee; 1 is mapping, and data about the state’s geology, appointed by the Speaker of the Assembly; and seismology and mineral resources, including their 3 are representatives from departments, including related hazards. CGS also reports earthquake data OES. Additionally, Chapter 532 moved SSC to the to state and local governments, which are later used State and Consumer Services Agency (which was to recommend changes to seismic provisions in the replaced by the BCSH Agency in 2013). Along building code. Additionally, the Earthquake Authority with this move, Chapter 532 emphasized the provides earthquake insurance policies to California value the Legislature placed on retaining SSC’s homeowners and renters. The Earthquake Authority independence. Accordingly, the legislation specified also administers the Brace and Bolt Program, which that the decisions and actions of SSC are not provides financial assistance to homeowners for subject to review by the Agency Secretary. earthquake retrofits. GOVERNOR’S PROPOSAL The Governor proposes budget trailer legislation July 1, 2020. Unlike current law, which and additional funding to reorganize SSC into a unit explicitly states that the decisions and actions within OES and to increase the commission’s data of SSC are not subject to review by the BCSH acquisition and outreach efforts. Agency Secretary, there is not statement that Budget Trailer Legislation. The Governor SSC decisions and actions are not subject to proposes to make various changes related to the review by OES. SSC, including changes to: • Modify SSC’s Responsibilities. SSC’s statutory responsibilities would be • Shift SSC Into OES. SSC would be modified. For example, its responsibility for reorganized into a unit within OES effective 2 LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2020-21 BUDGET recommending program changes to state CGS and the Earthquake Authority) provide agencies, local agencies, and the private updates to the commission on earthquake sector related to earthquake hazards would preparedness and seismic safety activities. be made less explicit. Increased Funding. Consistent with the • Reduce Number of Commissioners. The Governor’s proposed budget trailer legislation, number of commissioners would be reduced the Governor proposes to transfer six positions from 20 to 15. (The commission would and $2 million in associated funding currently continue to have one commissioner appointed budgeted for SSC to OES beginning in 2020-21. by the Senate Rules Committee and one The proposal also includes a net augmentation appointed by the Speaker of the Assembly.) of $949,000 from the General Fund in 2020-21— • Require Additional Reporting by Other declining to $713,000 annually beginning in Departments on Seismic Safety-Related 2021-22—to support one additional staff member, Activities. The language includes more as well additional data acquisition and outreach specific requirements that entities (such as efforts. ASSESSMENT Concept of Rethinking the SSC Generally than offset by an increase in resources that would Makes Sense. We find that the concept of reviewing support additional SSC activities). We also find the structure and functions of the SSC to ensure that that, while the proposal lacks some key details— it effectively provides policy guidance and leadership such as where it will be placed within OES—it on seismic safety issues makes sense. Specifically, generally appears to be fairly well-planned. This is the administration notes that, despite the value of likely because the proposed changes are the result the work conducted by the SSC, its impact has been of a detailed program review of SSC conducted by limited given that its independence means that it is the Department of Finance’s Mission Based Review not part of the policymaking process. Furthermore, Team. the administration indicates that SSC’s capacity has …But Also Some Notable Trade-Offs. While been limited because, as a small independent entity, the Governor’s proposal to transfer the SSC has it has had to dedicate a large share of its budget and strengths, it also comes with some key trade-offs. staffing resources to administrative activities. We find In particular, the proposal would decrease SSC’s that these are legitimate concerns that merit careful independence by placing it squarely within the consideration. administration and not including provisions in the Proposal Has Several Key Strengths… We budget trailer legislation explicitly providing for its find that the Governor’s proposal has some key independence. This is potentially of concern given strengths. In particular, we find that the proposal that, in the past, the Legislature has highly valued would likely address the administration’s concerns SSC’s independence. For example, in passing identified above. Specifically, moving SSC within Chapter 532 in 2006, the Legislature declared that OES has the potential to make it a greater part of it was imperative that SSC remain an independent the policymaking process, since OES drives much state agency to provide and maintain effective of the state’s disaster planning and decision making policy guidance and leadership on seismic safety processes, including those related to earthquakes. issues and to fulfil its duties. Accordingly, the Additionally, we find that some efficiencies would Legislature will want to consider whether it still be achieved through the reorganization, since prioritizes maintaining SSC’s independence when SSC would be able to leverage the administrative considering this proposal. support of a larger agency. (Although we note that Another trade-off associated with this proposal is the savings from these efficiencies would be more that it may reduce accountability. This is because the www.lao.ca.gov 3 analysis full gutter 2020-21 BUDGET relationship between the SSC and OES is not totally it is not clear whether the Director of OES or the clear. For example, it is not clear how much the Executive Director and commissioners of SSC should Director of OES would control the activities and work be held accountable for SSC’s activities. products produced by SSC in practice. Accordingly, RECOMMENDATION Direct Administration to Report at Budget • Authority of SSC. What other changes, if any, Hearings on Approach. Given the important did the administration consider to improve questions raised by the Governor’s proposal, we SSC? For example, did it consider further recommend that the Legislature seek additional empowering SSC rather than moving it? If information from the administration at budget other changes were contemplated, what hearings. Specifically, we recommend that the are the advantages and trade-offs of the Legislature ask the administration questions about administration’s approach relative to these the following issues: alternatives? • Process. Why is the Governor pursuing • Independence. Does the administration this reorganization through budget trailer believe there is value to SSC having legislation rather than the formal executive independence? If not, why not? If so, how will reorganization process, which has various this independence be preserved within the features designed to ensure reorganizations proposed structure, particularly given that the are successful, such as an independent proposed budget trailer legislation does not review by the Little Hoover Commission? explicitly provide for its independence. (For more on the executive reorganization • Accountability. Under the Governor’s process, please see our recent report The proposed structure, will OES be given the task 2020-21 Budget: Assessing The Governor’s of being a lead agency responsible for the Reorganization Proposals.) success of the state’s overall seismic safety preparedness? If not, is such a lead agency With the benefit of the administration’s answers important to ensuring accountability for to the above questions, we recommend the earthquake preparedness? Legislature consider whether it is comfortable that • Placement and Structure of SSC. How the administration’s proposed approach to SSC is will SSC’s commissioners and staff fit within consistent with its priorities or whether it would like the structure of OES? What value will the to pursue modifications to this approach. commissioners add within this structure that would not be provided by an advisory group? LAO PUBLICATIONS This report was prepared by Helen Kerstein, and reviewed by Drew Soderborg and Anthony Simbol. The Legislative Analyst’s Office (LAO) is a nonpartisan office that provides fiscal and policy information and advice to the Legislature. To request publications call (916) 445-4656. This report and others, as well as an e-mail subscription service, are available on the LAO’s website at www.lao.ca.gov. The LAO is located at 925 L Street, Suite 1000, Sacramento, CA 95814. 4 LEGISLATIVE ANALYST’S OFFICE