State parks: Only in California is a government surplus scandalous

July 23, 2012

By John Hrabe

California’s Department of Parks and Recreation has been holding onto $54 million in surplus funds for the past decade. The agency didn’t bother to tell anyone at the state Department of Finance about their secret stash.


Parks agency director, Ruth Coleman, resigned on Friday, but not before firing her second-in-command, Acting Chief Deputy Director Michael Harris. In May, former deputy parks director Manuel Lopez resigned after he approved $271,000 in secret vacation buybacks.

The scandal looks bad because it is bad. My colleague Katy Grimes has uncovered that employees were “keying in the post-it notes amounts, which were used for the buyout requests to avoid a paper trail.” No government officials should hide information from auditors or mislead the public about anything– let alone something as important as its finances.

But, let’s not forget one important fact: the agency saved the money. Coleman confirms that “no taxpayer money is missing and that no funds were embezzled.” If that turns out to be true, there are far greater scandals occurring every day with government agencies that wastefully spend our money. And because those stories have become so commonplace, the public ignores them.

Steinberg: Ready to Spend the Surplus

State Senate President Pro Tem Darrell Steinberg, D-Sacramento, promised that the Legislature was ready to spend the money. “The Senate will also examine how to ensure that these found dollars can be used for the highest benefit for California’s taxpayers,” he said in a press release.

On the very same day, Steinberg was defending the legislature’s approval of $4.6 million in pay raises for its employees. “Steinberg’s chief assistant, Kathryn Dresslar, was among those who received pay raises, a 10 percent increase to $183,480 a year,” the Associated Press reported; 110 of the employees that received raises already make more than $100,000 per year. I reiterate: On the same day that Steinberg was criticizing the state parks department for saving $54 million in taxpayer funds, he was explaining why he gave out pay raises to state employees.

Does that make sense to anyone? The director who saved taxpayer money loses her job, and the politicians that approved extravagant pay raises for their staff now get to spend the windfall.

Oh, the lying and dishonesty, you say. The legislature’s track record of openness and public disclosure is no better than the parks department. Last year, the Legislature fought Assemblymember Anthony Portantino, D-La Cañada Flintridge, in his quest for full disclosure of the legislature’s spending records. At least, state parks lied about saving money.

Only in California is it scandalous when a government agency doesn’t spend taxpayer money. Think about that: It’d have been better politically if the agency had frivolously spent the money rather than secretly stockpile it. If the parks department had spent the money on executive pay raises or renovations of its mansions, there’d be no scandal. Coleman wouldn’t have resigned.

Motivation to Hide

So, why did the agency hide the money? The Mercury News reported, “One parks department official who requested anonymity said it appears there was an error in accounting formulas years ago, and that as the money accumulated in the funds, staff members did not want to admit the mistake, possibly for fear that the finance department would take the money away.”

Here’s the real scandal: every other state agency that spent surplus funds to prevent the money from returning to the general fund. Does anyone really believe that the state parks department was the only agency to have a surplus in the past decade?

Any California agency with surplus funds probably rushed to spend its budget before the end of the year.  That’s what happened in Missouri. Earlier this year, an audit revealed, “Some Missouri agencies rushed to spend money on items not immediately needed as their annual budgets drew to a close.”

Any state agency that wasn’t already engaging in this behavior will do so in the future. The parks department scandal, and its ensuing investigations, will encourage state agencies to squander funds at the end of the year.

State Parks Never Closed

Moreover, there were no harms to hiding the money. The department threatened budget cuts would close state parks, but that never panned out. According the Los Angeles Times, “Closures were averted because donors, nonprofits and other government agencies stepped forward with additional funding.” In other words, the people that enjoy state parks paid for the state parks. Park patrons, environmentalists and nonprofit groups should pay more for a government service from which they enjoy the greatest benefits.

In dire economic times, California’s poor, working class and unemployed can’t afford to take a weekend camping trip to a state park. Gov. Jerry Brown expects this group to pay more taxes to keep the state parks open. Proposition 30 raises the state sales tax by a quarter percent, a regressive tax on the poor and working class.

By all means, investigate state parks, and keep reading Katy Grimes’ great work on the topic. But maybe, just maybe, politicians should be more outraged by the government agencies and departments that are wasting money every day, not the one agency that secretly hid their surplus from the free-spending state Legislature.

Scandals Hidden in Plain Sight

Every day, stories are hidden in plain sight. Take press coverage from this Saturday, the day that the state parks scandal broke, when there were no fewer than a dozen links to the story. On the same day, there were plenty of stories that demonstrate government waste and fiscal mismanagement by agencies that mislead the public.

Let’s start with California’s high-speed rail boondoggle. The California High-Speed Rail Authority has found no shortage of ways to waste taxpayer money. The agency initially spent $9 million on an outreach contract with Ogilvy Public Relations Worldwide to use tax dollars to influence public opinion of the project. The agency rejected French rail company SNCF proposal to “identify a profitable route, hold down building costs, develop realistic ridership forecasts and attract private investors.”

Time and time again, the agency has lied to the public about the project’s cost, ridership estimates and economic benefits. Last year, the San Jose Mercury News debunked the agency’s bogus claim that the project would create a million jobs. Of course, that’s wasteful spending and misinformation that even high-speed rail proponents can’t dispute. Most Californians don’t understand why the state is spending $8 billion on “a train to nowhere” as it cuts school funding.

Next up, the ongoing municipal bankruptcy scandals. contributor Steven Greenhut’s Saturday column focused on the $220 million of debt that has been racked up by the City of San Bernardino. City attorney James Penman initially claimed that city officials were provided false and misleading budget documents.

Wasteful Spending Across the State

Sacramento Valley: In Saturday’s edition of the Sacramento Bee, there’s a story about the renovation of the Hotel Berry. Buried in the story, “The Sacramento Housing and Redevelopment Agency contributed $10.1 million to the Hotel Berry renovation.” That’s money straight from government coffers that goes into the pockets of wealthy developers. Crony capitalism at its worst. Sacramento’s redevelopment experts are the same group that approved a $6 million subsidy of the infamous “mermaid bar,” while illegitimately seizing the property of Moe Mohanna.

Earlier this year, prior to their demise, redevelopment agencies rushed to approve billions of dollars in wasteful spending in order to use up the money before the state could get its hand on it. The Orange County Register’s Teri Sforza reported that Orange County alone spent $1.85 billion in government funds.

Bay Area: Zusha Elinson of the Bay Citizen has a piece in Saturday’s San Francisco Chronicle about thousands of dollars in bonuses fraudulently awarded to San Francisco Municipal Transportation Agency officials. “Muni paid thousands of dollars in bonuses to top executives for meeting or exceeding on-time performance goals, even as the agency inflated its on-time rates by as much as 18 percent,” she writes.

There are dozens of stories like this one each month, and hundreds more that go unreported. A few weeks ago, the San Mateo County violated the county’s pay restrictions in order to hand out a pay raise. “The San Mateo County Board of Supervisors unanimously authorized the new head of the county’s employee retirement system to make 5 percent more than the maximum annual pay of $183,600 for his position,” the Mercury News reported. This is a routine practice by local government agencies, especially cities and schools districts.

Orange County: Head down to Orange County, where former CalOptima Chairman Ed Kacic is accused of steering government contracts worth “millions of dollars to a private foundation that he heads.” OC Supervisor Janet Nguyen told the Register, “When you start an investigation, you start discovering things that you never knew.” Nguyen told the Register that there are more than 3,000 emails to review.

In California, government secrecy and deception are standard operating procedures. Usually, it’s to cover up reckless spending, not a $54 million surplus.

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