Governors in the news: only weeks away from Inaugurations, incoming governors are looking to trim the state operations they will oversee

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December 22, 2010

By Eileen McGuire-Mahony

Heavy rains have led to a state of emergency in six California counties

In one of his final acts as Governor, Arnold Schwarzenegger has declared a state of emergency in half a dozen of the Golden State's counties. Flash floods and tidal surges caused by heavy rains have led to the declaration for Kern, Orange, Riverside, San Bernardino, San Luis Obispo and Tulare counties.[1] With rain falling at up to 1.5 inches an hour, evacuation orders are in place for some communities on the slopes of the San Gabriel Mountains and residents of the Sierra Madre area have been told to be ready to evacuate at any time. Recent fires have reduced the ability of the mountain sides to resist debris slides caused by the rain; such slides can move as quickly as 35 mph and wipe out almost anything in their path. Additionally, tides are expected to surge as much as six feet today and some parts of California may even see small tornados.

Transition team for Florida's Incoming Governor recommends a sweeping consolidation of state agencies

Set to take office next month, Florida Republican Rick Scott has received a package of recommendations from his transition team that cover most areas the government regulates, one urging cost-cutting mergers and restructuring all around.[2] Scott has already promised to cut 6,000 government jobs, a move that would be the least radical change if he adopts his team's recommendations. Among the biggest proposed changes are folding three regulatory agencies into a single 'Department of Growth Leadership', decentralizing the prison administration, and dramatically restructuring the education system. With consolidating agencies in massive new bodies and decentralizing existing structures both featured in transition team reports, the common theme to the proposals is one of radical, and provocative, departure from previous administrations.


Georgia's Governor-elect hopes to lead a smaller state workforce

Republican Nathan Deal, due to be sworn in as the Peach State's Governor in the New Year, has called for downsizing the state's payroll, currently numbering about 104,000 full-time workers.[3] Speaking before an audience of business leaders, Deal stressed that the size of the state's payroll reflects a bygone time when tax revenues were much higher. In anticipation of cutting workers, he asked business owners to play a role by striving to create private sector jobs that will offset public sector contraction.

Georgia must also come up with $454 million by November 2011 to pay off debt owed to the Federal government on the state's Unemployment Trust Fund. If the state cannot make timely payments on both principle and interest, Federal law means employers will bear the consequences in the form of payment penalties. Deal was not averse to making the point that the smaller a payroll Georgia must meet, the easier it will be to retire the Trust Fund debt.

New York's Governor-elect sues Ernst & Young for alleged accounting fraud

Finishing out his term as Attorney General, Democratic Governor-elect Andrew Cuomo today announced a $150 million civil lawsuit against accountants Ernst & Young, alleging that they helped Lehman Brothers conceal the extent of its financial picture shortly before Lehman collapsed. The suit is the first case to be brought related to the Lehman bankruptcy, but it is hardly the first time government officials have charged that Lehman concealed its precarious situation from regulators and investors. As early as March 2010, a Federally appointed lawyer had said Lehman engaged in sham trades for months before it fell apart, meant to hide how little cash the firm had on hand. Cuomo's charges focus on a relatively small player in the saga; he alleges that as Lehman's auditors, Ernst & Young turned a blind eye to practices they knew their client was engaging in. In a prepared statement, Ernst & Young announced it will defend itself from charges the accounting firm says have no factual basis.[4]