Consumer Affairs Is Target of Budget Ax : Spending: Plan to eliminate the department could be first step toward closing unneeded regulatory agencies, a bipartisan group of lawmakers says.

SACRAMENTO — A bipartisan group of lawmakers out to reshape the state bureaucracy has chosen as its first target the department that regulates California obstetricians, embalmers and just about every profession in between.

The Department of Consumer Affairs and its 38 boards and commissions, which also oversee barbers, shorthand reporters and bill collectors, is increasingly under fire from conservatives who want to limit government and from liberals who say the regulators are dominated by those whom they are supposed to regulate.

With the state facing a shortfall of nearly $11 billion in the fiscal year beginning July 1, a group of Republicans and Democrats has concluded that the Legislature should eliminate the department and collapse its many boards into a handful.

The action would produce a direct savings to the taxpayer-supported general fund of only about $2 million because almost all of the $212-million cost of the regulatory system is borne by fees collected from the professionals.

But the lawmakers behind the move say they see abolition of the department as a preliminary skirmish that will steel them for battles with the special interests that will fight virtually every cut proposed to balance the budget.

“It only makes a tiny little nick in the budget problem,” said Democratic Assemblyman Phillip Isenberg of Sacramento, “but it means that a lot more sacred cows are up for slaughter this year and not just the powerless and the poor.”

Among the other cherished bovines might be the Franchise Tax Board, which could be folded into the elected State Board of Equalization; the Energy Commission, which some believe duplicates the Public Utilities Commission, and two state agencies that oversee recycling and garbage issues. Together, these actions could save the state about $300 million, about half of it from the general fund.

All are being reviewed by a self-appointed group of lawmakers who believe that the state’s dire fiscal condition requires a top-to-bottom examination of every government function to determine if it should stay. Does the state need a Department of Boating and Waterways? Does it still need a Mental Health Department when it has just shifted almost all the department’s responsibility to county governments?

These are among the questions asked by a group that includes conservative Republican Pat Nolan of Glendale and liberal Democrats Lloyd G. Connelly of Sacramento and Delaine Eastin of Union City. Isenberg is a moderate Democrat. The group is led by Assemblywoman Bev Hansen of Santa Rosa, a middle-of-the-road Republican who is retiring this year after six years in the Legislature.

In a place where most major decisions emanate from the top down, this Capitol “cabal”--as some members have taken to calling themselves--is unusual. But Hansen said the Assembly, long fractured by partisan conflict, was ripe for an informal dialogue among members who are not part of the legislative leadership that meets regularly with Gov. Pete Wilson.

Hansen readily acknowledges that the savings available in some places she and the others are inspecting will not “get us from here to there,” from an $11-billion shortfall to a balanced budget. But she said most of the easily cut fat is gone from state government. The choice is between cutting essential services and services that the state might be able to do without.

“If government were like a T-bone steak, if you could trim that strip of fat off the top, that would be easy,” Hansen said. “But it’s not. It’s marbled with pockets of fat here and there. We’re trying to get these little $8-million and $14-million and $2-million pockets of fat.”

Hansen and the others say they have reached a consensus that the Department of Consumer Affairs should be eliminated. The boards and commissions could be consolidated into as few as three--one for medicine and related fields, one for contractors, architects and other construction-oriented professions, and one for other occupations. There is no consensus yet on which of the regulatory functions ought to be eliminated.

Under this proposal, which is in its early stages and has yet to get a hearing in the Legislature, the boards that remain would handle testing and licensing. Consumer complaints would be forwarded to the attorney general for investigation and prosecution.

Hansen and her cohorts, though, have picked a tough place to start. The Department of Consumer Affairs and the regulatory boards under its umbrella have legions of supporters, not the least of whom are the professionals licensed by the panels she wants to banish. They are expected to fiercely fight any effort to disband the operation.

That is what happened the last time anyone tried to shut down a regulatory board. Republican Assemblyman Ross Johnson of La Habra spent two years in the mid-1980s pushing through legislation to eliminate the Board of Fabric Care, which regulated dry cleaners. Johnson’s drive was prompted by the jailing of a 76-year-old Anaheim shop owner who had inadvertently let the surety bond on his business lapse.

Although Johnson’s effort began as a fight against over-regulation, he made his case by showing how little the board did to oversee the industry. After a bitter battle, his bill passed with bipartisan support in 1986 and was signed by Gov. George Deukmejian, putting the Fabric Care Board out of business.

Other boards have had their share of political and legal problems.

In 1989, a member of the Acupuncture Examining Committee was convicted of accepting bribes in exchange for answers to questions on licensing exams. Prosecutors alleged that the official took $500,000 over eight years to rig the test for more than 50 applicants.

The same year, the Board of Examiners in Veterinary Medicine came under fire for its effort to stop dog groomers from cleaning canine teeth, a financially lucrative practice that the board said required the supervision of a veterinarian. Board investigators used an undercover dog to bust a Stockton groomer on criminal charges of practicing veterinary medicine without a license.

Although the San Joaquin County district attorney declined to prosecute, the incident fueled charges that the boards are more interested in protecting economic turf than in regulating the professions. Although board officials dispute that charge, some acknowledge that state licensing allows a profession to carve out a niche for itself that could be jeopardized by deregulation.

Jeanne Brode, executive officer of the Board of Landscape Architects, said abolition of that board could be devastating to the 3,700 designers it has licensed and to hundreds more who are studying the field in college. Without state certification, she said, landscape architects would lose business to licensed architects, engineers and contractors.

But more is at stake than the ability to make a good living, said Democratic state Sen. Daniel E. Boatwright of Concord, head of the Senate Business and Professions Committee.

“It’s good to scream and shout and posture for the public but that doesn’t recognize that people who hold themselves out as experts in a particular field need to have some minimum standard of qualification,” Boatwright said. “That’s all the boards do--determine through testing that there is some minimum form of competency.”

If legislators believe some boards are not doing their job, Boatwright said, the answer is to improve their performance, not eliminate them. The lawmaker’s view is shared by Jim Conran, director of Consumer Affairs. “Our boards need to realize that their primary focus is to protect the public, not economic turf,” Conran said.

The system may be ripe for change, Conran said, but it should not be scrapped. He said he intends to submit a plan for improvements next January. “We need more of a voice for consumers in state government, not less.”

Supporters of the overhaul say it is possible to test and license professionals and to protect consumers without a board to oversee each occupation.

“What we’ve been doing is over-regulating life,” Isenberg said. “Every time somebody says: ‘Make this a licensed, credentialed and certified profession,’ the Legislature falls all over itself to do that. It’s insane.”