Wonk Alert: Watching the Money

What happens after you — yes you, voters — approve billions of dollars in spending and then walk away? Plenty.

In 1998, voters passed Proposition 10 and increased the cigarette tax by 50 cents a pack to fund children's programs. This has arguably done a lot of good.

But in 2004, auditors found large amounts of the Proposition 10 money unspent, with no consistent rules in place to govern contracts. In rural Kern County, commissioners used $1,400 to put up bronze plaques honoring themselves in tot lots. And director Rob Reiner quit his Proposition 10 leadership post after it appeared they were using the children's health piggybank to promote a different initiative.

Now, California is getting ready to spend $3 billion for stem cell research. It has created a new California Institute for Regenerative Medicine and a five-member panel to audit the money.

This week, some political watchdogs are objecting to a former California Teachers Assn. political director joining the stem cell auditing board. Appointed by Assembly Speaker Fabian Nunez, the former union official, John Hein, is taking a seat reserved for a medical expert. Given the controversial nature of stem cell research, this group will be far more scrutinized than those governing other initiatives.

How the stem cell commission spends its money already is subject of an appellate court challenge by religious and taxpayer groups over potential conflicts of interest.

Coming up in two months: Proposition 87, which would levy a $4 billion tax on oil companies to fund alternative fuels. If approved, you can expect this initiative to land in court or the Legislature for refinements, according to that scintillating publication, Inside Cal/EPA.

The money will be doled out by yet another commission, the California Energy Alternatives Program Authority. The wonks at Inside Cal/EPA report that the initiative doesn't spell out whether the oil companies will be taxed at a standard rate ($4.20 per barrel) or a marginal rate ($2.17 per barrel).

That could make a big difference in how long the oil companies will take to fork out the full $4 billion. Some lawmakers also say the initiative needs tighter conflict-of-interest rules.

Either way, California voters are faced this November with creating another commission to spread around billions of dollars outside the direct authority of elected officials. However noble the cause, these complicated initiatives often get far more attention from the public and the press before an election than after.

Comments

[Steven Maviglio]

Only one so-called "Watchdog" group has complained about the appointment of John Hein, a financial wiz on health care costs, to the auditing board. This group is at odds with the Speaker on Prop 89 and his support of legislation that would break the cable television monopoly. They are simply grinding their axe. There is no substance to their complaint.

[David Jensen]

In fact, there is substance to the complaint concerning the speaker's appointment of John Hein. All of the members of the financial oversight panel for the stem cell agency are required by the very specific terms of Prop. 71 to have medical backgrounds. Beyond that, the panel has six members -- not five.

We also should note that most voters probably thought they were voting for a 10 year program when they approved Prop. 71 in 2004. In fact, the agency has life ever after (to borrow a theological phrase). See the following:http://californiastemcellreport.blogspot.com/2006/09/unexpectedly-to-some-long-life-of-cirm.html

[David Jensen]

As for the appellate proceedings concerning the agency, here is an update: http://californiastemcellreport.blogspot.com/2006/09/update-on-legal-actions-against-cirm.html

[Ted Green]

Your blog entry has an interesting six-degrees-of-separation to it. The No on 87 campaign (I'm the campaign's Political Director) has been pointing out that 87 would allow the new bureaucracy to dole out $4 billion outside of the state budget review process and the normal checks and balances that govern other agencies.

As you point out, that's one of the criticisms of the Stem Cell Initiative and John Hein has recently been appointed to hand out that money.

I recently learned John Hein is a consultant to the Yes on 87 campaign. He's been running around claiming specific dollar amounts that passage of 87 would deliver to public schools.

The problem is 87 doesn't direct a single dime to California's public schools. (They're eligible to apply for money and it'll be up to the political appointees doling out the money to decide where it goes.) And those same political appointees get to write the procedures and their own "competitive selection" process.

[David Jensen]

RE the item below from Ted Green, Hein is not handing out anything. He is one of six persons on a panel that reviews the financial operations of the California stem cell agency. The panel has no power. It does not issue grants, make loans or disburse funds.