N E W S R E L E A S E

FOR IMMEDIATE RELEASE
October 8, 2003

California Transition Requires Immediate and Decisive Action on Personnel Changes and Budget Deficit

Recommendations made by leading government reform think tank

San Diego (October 8, 2003) - In what might make many of his action movies seem tame by comparison, Governor-elect Arnold Schwarzenegger is about to embark on a wild ride: managing a mid-term transition of power while solving a state budget deal that has fallen apart. "He'll have six weeks to do it-from installing new political appointees in each state agency, issuing executive orders on reversing the car tax and creating a state-wide audit while devising a new budget to address a $16.5 billion deficit that he must submit by the beginning of January," notes Carl DeMaio, President of the Performance Institute and a nationally recognized expert on government management and budgeting who has advised on numerous transitions of power.

In an effort to identify and propose solutions to the legal and technical challenges surrounding the upcoming mid-term transition of power in California state government, the Performance Institute has launched a "Transition to Governance" project. The first transition activity will occur this Thursday, October 9 in Sacramento, where the Institute will host a Transition Dialogue. The Dialogue panelists will include a "who's who" collection of former state officials, government management experts and pundits from across the political spectrum to offer recommendations to the new Governor on how best to manage the transition.

"The transition will be the first test of Governor-elect Schwarzenegger's leadership-and one he must be ready to pass with flying colors," advises DeMaio. "How the Governor-elect manages the transition will be the first indication of whether he is up to the task of solving the state's budget crisis. His actions should serve to reassure Californians that state services will not be disrupted during this time of change, and should bolster the confidence of the state's creditors who will be watching events closely."

Last week the Institute released the results of an analysis demonstrating how the state's current budget deal has largely fallen apart-leaving the new Governor to face a $16.5 billion deficit. By law, the Governor must submit a balanced budget by the first week of January that addresses the current year deficit as well as the projected deficit for the coming year. "If Governor-elect Schwarzenegger is going to be ready to submit a balanced budget by the first week of January, he must move quickly and decisively to install his own political appointees in each state agency," warns DeMaio.

The Performance Institute is the nation's leading government reform think tank-recognized as an authority on performance-based management practices for government agencies. It houses the California Government Accountability Council which advocates enhanced accountability in California state government and recently completed two groundbreaking projects on California's fiscal crisis: the Citizens' Budget Plan (an objective, line-by-line budget plan for the state) and the Roadmap to Reform (a proposal to create a State Reorganization Commission that was co-authored by a bipartisan group of former elected officials including Kathleen Connell and Matt Fong.) More information can be found at www.cagac.org.

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