Comments on: Is California the Next Dubai? http://economiccrisis.us/2009/12/california-dubai/ news, analytics, recommendations Tue, 07 Feb 2012 04:37:19 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: AggieEconomist http://economiccrisis.us/2009/12/california-dubai/comment-page-1/#comment-848 AggieEconomist Wed, 02 Dec 2009 21:51:29 +0000 http://economiccrisis.us/?p=7442#comment-848 I found Robert's comparison of California and Dubai fascinating as he drew parallels between the two that I hadn't given much thought to before. As a resident of Los Angeles County, I intimately understand the implications of CA's debt crisis. However, I must respectfully disagree with Robert's stance on taxes. In an economy as crippled as the Golden State's, taxes must not be the answer to our debt. I speak to business owners, CFO's and executives every day as part of my job, and almost all of them have complaints about the hostile business environment being cultivated in CA. Companies are leaving at an alarming rate for other less expensive states like Nevada and Arizona. Keeping taxes and regulations high will only continue to discourage companies from staying here and, before too long, there will be no one left to tax. A better solution, in my opinion, is to focus on streamlining government spending and cutting out waste wherever possible. It's everywhere. You don't need to look far. In Los Angeles County, for example, the Board of Supervisors is currently examining their options for a program that has been costing the county more and more each year. Recently, they reissued an RFP for vendor services to operate the county’s GAIN case management services (a welfare-to-work program). I expect the same two companies will submit proposals as last year – Maximus Inc. and Policy Studies Inc. (PSI). Maximus has maintained its contract with the county for many years now, but its cost to the taxpayers keeps skyrocketing. If the new bids resemble those from last year, we can expect that the Maximus bid will cost taxpayers almost a million dollars more than PSI’s. What’s more, Maximus has a track record of poor performance. Under its latest three year contract, Maximus has been cited repeatedly for failing to meet required goals in 5 of 8 categories (according to the LA Times). Last year, the Department of Public Social Services favored PSI based on scoring done on the two companies by a neutral third party. PSI scored 9,082 out of 9,616 possible points in the procurement process, whereas Maximus scored 7,824 of 9,616. PSI won by a 13% margin on technical score and also submitted the lowest bid, which was 6% cheaper. Even worse, Maximus has spent hundreds of thousands of dollars trying to buy the support of the Board of Supervisors through lobbying and campaign donations. We need to encourage our elected leaders - on all levels - to follow in the footsteps of the BOS and identify costly programs and find cheaper, more efficient alternatives. With a potential cost savings of over a million dollars a year, the savings would add up quickly if all counties made a similar effort. California's priority must be maintaining its talented and diverse corporate base that makes it one of the world's most powerful economies. I found Robert’s comparison of California and Dubai fascinating as he drew parallels between the two that I hadn’t given much thought to before. As a resident of Los Angeles County, I intimately understand the implications of CA’s debt crisis. However, I must respectfully disagree with Robert’s stance on taxes. In an economy as crippled as the Golden State’s, taxes must not be the answer to our debt. I speak to business owners, CFO’s and executives every day as part of my job, and almost all of them have complaints about the hostile business environment being cultivated in CA. Companies are leaving at an alarming rate for other less expensive states like Nevada and Arizona. Keeping taxes and regulations high will only continue to discourage companies from staying here and, before too long, there will be no one left to tax. A better solution, in my opinion, is to focus on streamlining government spending and cutting out waste wherever possible. It’s everywhere. You don’t need to look far. In Los Angeles County, for example, the Board of Supervisors is currently examining their options for a program that has been costing the county more and more each year. Recently, they reissued an RFP for vendor services to operate the county’s GAIN case management services (a welfare-to-work program). I expect the same two companies will submit proposals as last year – Maximus Inc. and Policy Studies Inc. (PSI).

Maximus has maintained its contract with the county for many years now, but its cost to the taxpayers keeps skyrocketing. If the new bids resemble those from last year, we can expect that the Maximus bid will cost taxpayers almost a million dollars more than PSI’s.

What’s more, Maximus has a track record of poor performance. Under its latest three year contract, Maximus has been cited repeatedly for failing to meet required goals in 5 of 8 categories (according to the LA Times). Last year, the Department of Public Social Services favored PSI based on scoring done on the two companies by a neutral third party. PSI scored 9,082 out of 9,616 possible points in the procurement process, whereas Maximus scored 7,824 of 9,616. PSI won by a 13% margin on technical score and also submitted the lowest bid, which was 6% cheaper.

Even worse, Maximus has spent hundreds of thousands of dollars trying to buy the support of the Board of Supervisors through lobbying and campaign donations.

We need to encourage our elected leaders – on all levels – to follow in the footsteps of the BOS and identify costly programs and find cheaper, more efficient alternatives. With a potential cost savings of over a million dollars a year, the savings would add up quickly if all counties made a similar effort. California’s priority must be maintaining its talented and diverse corporate base that makes it one of the world’s most powerful economies.

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