Last Wednesday, CCAGW issued a press release blasting Proposition 29, a ballot initiative in California’s primary election that would place a $1 levy on packs of cigarettes.  Among the reasons for CAGW’s opposition was the almost unbelievable requirement that none of the revenue generated by Prop 29 go toward reducing California’s massive budget deficit.

At the time of the release, California’s budget situation looked bad enough.  In April, Bloomberg Businessweek reported that the deficit there would likely climb to $10.2 billion, up from the $9.2 billion previously estimated.  Then on Saturday, May 12, things got much, much worse when Gov. Brown released a YouTube video declaring that those estimates were low by almost 60 percent.  It turns out that California’s deficit has ballooned to a whopping $16 billion, making it even more ridiculous to propose a new tax devoted to a single purpose.

Unfortunately for Californians, Prop 29’s flaws do not end with the fact that it will not lower their state’s deficit.  While the estimated $735 million raised by Prop 29 would be slated for cancer research funding, the vessel that would deliver those funds is already looking leaky.  The measure would create a new state commission, which will manage the research funds and be governed by a nine-member board comprised of university, cancer center, physician and advocacy group representatives.  These appointees will be handed $110 million annually for office space and facilities, plus an additional $15 million for consultants, salaries, and travel.  Prop 29 also prohibits the governor, legislature, and even the state auditor from making changes to the initiative for 15 years, even in the case of fraud or waste, and there is no requirement that the money be spent in California, so Californians may end up funding projects and creating jobs in other states at their own expense.

After all, it’s not as though California has yet to feel the effects of its troubled fiscal condition.  As the Los Angeles Times pointed out on April 27, California “can’t afford to retain its K-12 teachers, keep all its parks open … or provide adequate home health aides for the infirm or medical care for the poor.”  In a May 13 editorial, the Los Angeles Daily News pointed out that California’s deficit has already resulted in “teachers being laid off by the thousands and education funding being slashed at all levels.”  These facts raise an important question, one that was articulated perfectly by the Daily News: “If state officials think they can raise $700 million this easily, why not put the revenue toward reducing the general budget deficit?”  Surely there are priorities more pressing than cancer research, which is already funded by the federal government to the tune of $6 billion each year.

Taxpayers in any state should always be skeptical of new schemes to swell government coffers, especially when they are billed as being in taxpayers’ own best interests.  In California, the deficit was big enough a week ago to make Prop 29 look like a bad idea.  Now that the shortfall has gone from gaping to downright cavernous, it looks reckless.

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On May 7, 2012 the Senate confirmed the nomination of confirmation of Ajit Pai and Jessica Rosenworcel as the newest commissioners to the Federal Communications Commission (FCC).

The FCC has been operating with one vacancy since June 2011 and two since the beginning of 2012. Mr. Pai fills the vacancy left by the departure Meredith Attwell Baker in June 2011; and Ms. Rosenworcel fills the vacancy left by the retirement of Michael J. Copps in December 2011. Pai and Rosenworcel will be joining the FCC as it prepares to make decisions on various issues including the implementation of the spectrum incentive auctions, the launch of the Connect America Fund and the mobility fund auctions, as well as finalizing its quadrennial media ownership rule review.

As noted in previous blog posts, over the past year the FCC has redefined “universal service” to include broadband communications which has the potential to further increase the cost of the Lifeline program and has continued the Universal Service Fund through its Connect America Fund with no end in sight.  When the FCC begins operating with its full complement of commissioners, CAGW will be keeping a watchful eye over its actions to ensure that decisions are made by the commission with a full understanding of the cost to taxpayers.

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This morning, the Bureau of Labor Statistics released its jobs report for the month of April, and the results weren’t pretty.  The economy created a disappointing 115,000 jobs during the month, falling far below the 170,000 figure that Wall Street economists were predicting.  The service sector accounted for the majority of the growth, while manufacturing lagged.

Though the unemployment rate in April fell to 8.1 percent, the drop was not indicative of an improving economy.  Rather, the .1 percent decline likely resulted from a drop in the labor force participation rate, defined as the number of Americans actively seeking employment or otherwise employed, from 63.8 percent to 63.6 percent.  The unemployment rate does not take into account individuals who are not actively looking for work, which is one of the reasons that economists often focus more on other statistics to gauge the overall health of the economy.  When accounting for this group, unemployment remained steady at last month’s rate of 14.5 percent.

It is becoming increasingly clear that the economic recovery is in doubt.  Congress could help to reverse America’s anemic job growth through enacting legislation to produce more domestic oil, reduce the corporate tax rate, and repeal burdensome business regulations.  Without prompt action of some sort, however, it is likely that things will get much worse before they get any better.

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In an effort to reduce costs in the F-35 Joint Strike Fighter (JSF) program, the Department of Defense (DOD) has pressured prime contractor Lockheed Martin to reduce pension costs of its workers.  In recent weeks, the defense contractor has gone after defined benefits plans for new hires, which led unionized employees in the Fort Worth Texas plant where Lockheed Martin constructs the F-35 to go on strike.

Pension plans among federal contractors are a major burden on taxpayers.  On February 8, 2012, Citizens Against Government Waste (CAGW) released a report outlining taxpayer liabilities for government contractors’ post-retirement benefits.  The project was initiated after a Government Accountability Office (GAO) report on the topic was released in April, 2011.  The GAO analyzed payments by the Department of Energy (DOE) to contractors for the cost of underfunded pensions.  DOE paid $3.64 billion to its contractors over the past 10 years, and the GAO estimated that future DOE liabilities for these benefits could be $36.7 billion over the next 10 years.

The federal government has roughly 200,000 contractors working for just about every agency, taking in approximately $700 billion annually.  Many of these companies sponsor defined benefit pension plans for their employees; company officials control not only the level of benefits offered, but also the strategies used for investing plan assets.  Since many cost-plus federal contracts include clauses that ensure these pension plans are fully funded even if the plans’ investment benchmarks are not met, taxpayers ultimately bear the investment risks associated with pension fund investment decisions made by some of the most profitable corporations in the country.

Even without the associated pensions for contractors, the JSF program has long burned taxpayers.  The most expensive acquisition program in American history, the JSF was described by Acting Under Secretary of Defense for Acquisition, Technology, and Logistics Frank Kendall in February 2012 as “acquisition malpractice.”  The JSF is set to cost $1.5 trillion over its lifetime (55 years), a cool $500 billion above the original estimate, and roughly the gross domestic product of Spain.  The program has also experienced substantial delays – the latest estimates placing fleet completion in 2019 – and has been referred to by Foreign Policy as a “calamity.”

CAGW applauds this effort by the DOD and Lockheed Martin to rein in contractor pension costs, a model that should now be applied to other DOD acquisition programs and government agencies.

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The current economic climate, record national debt, and automatic cuts to the Department of Defense (DOD) posed by sequestration have placed defense spending on the political front burner.  Leaders in Washington, even inside the Pentagon, have stated publicly the dangers of continued deficit spending.  On August 26, 2010, Admiral Mike Mullen, then-Chairman of the Joint Chiefs of Staff, referred to the national debt as the “single-biggest threat to our national security.”

DOD spending has risen dramatically over the past decade.  Without accounting for the wars in Iraq and Afghanistan, the budget for the DOD has more than doubled since 2001.  In 2011, the Pentagon’s budget accounted for more than half of U.S. discretionary spending.  The Major Defense Acquisition Program portfolio (MDAP) consists of programs that require research, development, testing, and evaluation expenditures in excess of $365 million (in fiscal year [FY] 2000 constant dollars), or procurement in excess of $2.19 billion (in FY 2000 constant dollars).  The portfolio has grown exponentially in recent years, from 54 programs in 2005 to 96 in 2011.  Currently, the MDAP contains programs with a total estimated lifetime acquisition cost of $1.58 trillion.  Unfortunately, many of the programs contained within the MDAP are riddled with cost overruns and delays, making them a good place to begin looking for savings whether or not sequestration is enacted.

According to the Government Accountability Office’s (GAO) annual report on the MDAP released in March 2012, the total acquisition cost of the programs over the past year has increased by more than $74.4 billion, or five percent.  Shockingly, the largest portion, $31.1 billion, is attributed to problems on the private contractor side, including “factors such as inefficiencies in production.”  Other causes for the substantial cost growth include $29.6 billion due to changes in quantities ordered and $13.7 billion because of rising research and development expenses.  In addition, the majority of MDAP programs have experienced unit-acquisition cost growth, meaning taxpayers are getting less bang for their bucks.

The GAO report blamed problems inherent in the defense acquisitions process for the rise in costs, stating that the majority of MDAP programs are not demonstrating knowledge at key decision points, which means that the acquisition processes are advancing under riskier circumstances.  Programs that move forward without adhering to a knowledge-based acquisition approach will contain technology, design, and production risks, leading to cost growth and delays.

Much of the cost growth of the MDAP can be attributed to a small number of programs, chiefly the F-35 Joint Strike Fighter (JSF).  Taxpayers have long been burned by the JSF procurement process, described by Acting Under Secretary of Defense for Acquisition, Technology, and Logistics Frank Kendall in February 2012 as “acquisition malpractice.”  According to the GAO report, the JSF is “the costliest, the poorest performer in terms of cost growth, and the program with the largest remaining funding needs,” and accounts for the majority of the research and development, procurement, and acquisition cost growth in the MDAP over the past year.  Critically, this growth occurred without alterations in the number of planes ordered.  Overall, the JSF program is set to cost $1.5 trillion over 55 years, a 50 percent increase from the original estimate of $1 trillion.

Congress has not used its main cost-cutting tool to combat overruns in defense acquisition programs.  The Nunn-McCurdy Amendment allows Congress to terminate DOD weapons procurement programs if total cost grows above 25 percent of the original estimate and the Defense Secretary fails to submit a letter certifying that the program is essential to national security, along with several other criteria.  It will probably not come as a surprise to learn that Nunn-McCurdy is not frequently utilized given the Pentagon’s predilection to continue acquisition programs despite cost overruns and for members of Congress to maintain funding regardless of performance.

On a positive note, the DOD has achieved substantial savings over the last several years by canceling several high-profile programs, such as the Future Combat System and the VH-71 Presidential Helicopter Replacement Program.  The DOD should reevaluate the necessity of each existing MDAP project with an eye toward achieving further savings, with more intense scrutiny applied to MDAP projects that have repeatedly breached Nunn-McCurdy.

The DOD should also adopt the GAO’s recommendations regarding a “knowledge-based acquisition approach.”  To reverse the latest trends of spiraling costs in the MDAP, it must incorporate within its procurement system a methodology that ensures contractors proceed with development only after determining that their technologies are mature and designs are stable.  This will help to limit future cost growth and delays.

The current economic climate necessitates reform in all areas of the budget.  Trimming the fat from the MDAP and reducing cost growth will allow the DOD to maintain priority acquisition programs while contributing to debt reduction, a concern of the highest strategic importance as characterized by the highest ranking officials – both civilian and military.

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The following Wastewatcher was composed by Luke Gelber

One does not need to be an accountant to recognize that the United States Postal Service (USPS), which lost $8.5 billion in fiscal year (FY) 2010, $5.1 billion in FY 2011, and is on pace to lose another $11 billion in FY 2012, is in dire straits.  Only a politician, however, would insist on delaying the Postal Service’s attempts to put a tourniquet on its red ink-hemorrhaging business model.

Enter Sens. Tom Carper (D-Del.), Joe Lieberman (I-Conn.), Susan Collins (R-Maine), and Scott Brown (R-Mass.), whose 21^st Century Postal Service Act (S. 1789), would scale back the number of possible processing facility closures from 252 to 125, add several complex requirements to the already tortured process for post office closings, and require USPS to wait two years before stopping Saturday mail delivery.  The bill would also postpone USPS’s bankruptcy with an $11 billion cash infusion drawn from “overpayments” made in previous years to a retirement fund.

S. 1789, which passed in the Senate by a vote of 62-37, reached the Senate floor six days after the Government Accountability Office (GAO) published its April 12, 2012 report on the state of USPS.  The implications of GAO’s findings make S. 1789’s sponsors appear to be making recommendations for a different agency altogether, possibly while governing from another dimension.  Typically diplomatic in tone (for example, in the wake of the $535 million Solyndra debacle, GAO suggested that the Department of Energy “could improve its collection of information from applications”), GAO pulled no punches, titling its report, “Mail Processing Network Exceeds What Is Needed for Declining Mail Volume,” and proclaiming that USPS “cannot continue providing services at current levels without dramatic changes in its cost structure.”

That GAO report is merely the latest in a long line of bad news for the Postal Service.  An April 2010 GAO report stated that the USPS business model “is not viable due to USPS’s inability to reduce costs sufficiently in response to continuing mail volume and revenue declines.”  On April 22, 2010, former Postmaster General (PMG) John Potter announced that the USPS will lose $238 billion over the next 10 years.  Even S. 1789 co-sponsor Sen. Susan Collins (R-Maine) acknowledged in the April 18, 2012 Portland Daily Sun that the Postal Service “is in danger of dying.”

In a November 21, 2011 speech before the National Press Club, PMG Patrick Donahoe pointed out that “roughly 25,000 out of our 32,000 Post Offices operate at a loss.”  He added that thousands of post offices have less than $20,000 in annual revenue yet cost more than $60,000 to operate, and that many of those unprofitable locations are just a few miles away from another post office.  When S. 1789 was approved, Donahoe called the Senate’s efforts to keep unneeded facilities open “totally inappropriate in these economic times,” and concluded that “there is simply not enough mail in our system today.”

Despite these warnings, the 21^st Century Postal Service Act focuses almost exclusively on preventing USPS from doing what it must: downsize.  Sen. Carper’s website explains that the bill will guarantee that, “in the rare case when a Post Office is closed, the impacted community can appeal the decision to the Postal Regulatory Commission,” while preventing USPS from switching to five-day-a-week delivery for the next two years will ensure “that [USPS] has developed remedies for customers who may be disproportionately affected by changing service and exhausted other means for reducing costs and increasing revenue.”  Translation into English: don’t worry about losing money, Congress will be here to bail out the Postal Service.

On top of the bailout, the New York Times reported on April 20, 2012, that S. 1789 would “let [USPS] enter into several new lines of business, like shipping beer and wine,” while creating “a chief innovation officer to identify new lines of electronic business.”  Even if these plans are put aggressively into practice, USPS cannot possibly bring in enough money to address its massive revenue shortfall.  A 2010 study by Accenture, a consulting firm, found that diversification at the Postal Service would require the equivalent of creating 13 Fortune 500 companies and revenue more than double that of FedEx and UPS combined.  Put another way, you can’t get there from here.

Conversely, House Oversight and Government Reform Committee Chairman Darrell Issa (R-Calif.) and Senator John McCain (R-Ariz.) have drafted legislation that would only allow the Postal Service to receive the cash infusion proposed in S. 1789 subject to significant reductions in expenses.  Those cuts, which would total $10.7 billion per year after full implementation of the bill, would come in the form of a switch to five-day delivery, consolidation of existing post offices, and processing facility closures, among other recommendations.  Unlike its counterpart that passed in the Senate, Chairman Issa and Sen. McCain’s bill begins with the recognition that the Postal Service must get smaller, not larger.

Congress’s staunch opposition to real reform at USPS makes a large, taxpayer-funded bailout of USPS more likely by the month, which will be awkward for an agency that has long boasted of operating at no cost to taxpayers.  That defense will be even harder to justify when private businesses find themselves undercut by a government agency that hasn’t had a profitable fiscal year since the George W. Bush administration.  To salvage its reputation and its mandate, the only direction USPS should be moving is toward a slimmer, consolidated version of itself, one that has been right-sized to reflect diminished modern demand.  The sooner Congress leaves the Twilight Zone and comes to grips with that reality, the better.

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The following Wastewatcher was composed by Deborah Collier.

As government agencies at all levels continue to face tremendous pressure to do more with less, the use of cloud computing tools to reduce the cost of information technology (IT) infrastructure is particularly enticing as an opportunity to save taxpayer dollars.  Cloud computing products can be an effective tool to reduce the total cost of ownership for an IT system, but public officials should make certain that the cloud services they purchase will fully meet all of the requirements for which they are intended.  If the cloud services do not meet these needs, further investments may be required at a later date, which could reduce the potential savings.

An April 13, 2012 article in The Washington Post listed three key components for businesses and governments to consider when deciding to use cloud computing tools.  They include “a clean, seamless migration; proper security and control; and quality 24-7 support.”  While these factors are important, they should not be the only drivers for businesses and government agencies who are considering moving their data and services to the cloud.  Modernizing and consolidating IT systems requires careful consideration of several basic tenets of IT procurement.  While the Post article cites potential cost savings of up to 50 percent for companies that invest in cloud computing, there are some risks in transitioning IT solutions to new tools and methods of operation.

As part of the Obama administration’s “cloud first” strategy for IT procurement, most federal agencies have already started moving archival services, legacy software, e-mail, public website hosting and infrastructure services to a cloud environment.  However, some federal IT users are still reticent about this transition.  A February 1, 2012 article in Federal Computer Week highlighted study results issued by the Poneman Institute on September 5, 2011 which showed that of the 39 percent of federal IT managers who indicated reluctance in moving services to the cloud, 10 percent were concerned about lack of suitable applications or services, 36 percent were concerned about safety and security, and 59 percent felt that the 18-month period required under “cloud first” to move three services to the cloud was too short a period of time.  In addition, an April 24, 2012 article in Government Computer News referred to a survey conducted by Serena Software asking federal IT users about their IT priorities.  Only 19 percent of those surveyed listed using cloud technologies as one of their priorities.  The respondents felt “they first need to tackle issues of standardization, automation, etc., because failing to do so will lead to poor cloud deployments.”

Several state and local governments including California, Colorado, Michigan, Minnesota, Utah, Wisconsin, as well as New York City, Los Angeles, and the District of Columbia are delving into cloud computing at various levels of engagement in order to streamline their IT processes with the goal of greater efficiency at a lower cost to taxpayers.  However, their experience demonstrates that migrations to new systems are not always successful.

In 2008, the District of Columbia decided to update its email and document processing systems and migrate to Gmail and Google Docs.  However, according to an article in the March 15, 2012 CIO Magazine, nearly four years after the initial contract only 200 of the city’s 40,000 employees are currently using Gmail, and only 2,000 are using Google Docs.  In 2010, the city conducted a pilot program in which 300 users were selected to use Google products for three months; however, according to the article, Gmail ultimately didn’t pass the “as good or better” test with users, who preferred the previous system.  While not ruling out the completion of the existing planned migration, city officials are also exploring other cloud solutions.

A February 7, 2012 article in Computerworld highlighted other difficulties that some state and local governments have had in navigating the cloud computing waters.  In November 2009, Los Angeles contracted with CSC for its Google Premier products.  However, nearly one year later, the Los Angeles Police Department determined that the Google products could not meet Criminal Justice Investigative Services (CJIS) requirements to protect the security and privacy of the information maintained by law enforcement organizations.

In December 14, 2012, the LA city council amended the contract wherein Google agreed to pay for the additional Novell GroupWise licenses needed by the LAPD in order to maintain a secure email system that met CJIS requirements.  The article in Computerworld cited the FBI’s insistence that its requirements for CJIS would not be modified to accommodate cloud computing services, and cited other vendors that do meet these requirements.

However, these instances should not discourage government agencies from pursuing cloud services.  A February 2012 publication by TechAmerica cited the benefits of cloud computing for state and local governments, which include reduced operating expenses, improved information use, and increased government effectiveness.  However, this report reiterated that certain information relating to public safety, education and healthcare need a high level of privacy protection.  This higher level of security can be attained in the cloud environment through the use of private clouds, and intelligent contracting vehicles.

According to an April 3, 2012 article in Government Computer News, Michigan Governor Rick Snyder anticipates that the state will have a $457 million budget surplus by the end of the current fiscal year.  A portion of this surplus can be attributed to the state’s efforts to modernize and consolidate its IT department that began in the 1990s and eventually led to the creation of a state-operated cloud platform called MiCloud.  MiCloud uses the state’s fiber backbone to offer infrastructure as a service and virtual machine provisioning in less than 30 minutes. According to the GCN article, the IT department was able to save the state more than $45 million through using this service between 2008 and 2010.

In 2010, the city of New York decided to consolidate its 30,000 employees under one unified cloud-based system for email, instant messaging and other services. According to an October 20, 2010 article in Government Technology, Mayor Bloomberg anticipates that the city will save $50 million during the five-year period covered by the new contract.  A January 30, 2011 Reuters article also showed that the city also planned to consolidate its IT services using cloud computing solutions in anticipation of further savings.

In 2009, the Wisconsin Department of Natural Resources (DNR) performed a review of its communications strategy, which used email, face-to-face meetings and conference calls.  Following the review, DNR decided to migrate its staff to a cloud-based Microsoft Live Meeting.  According to an article in Cloud Computing Vocabulary, the antiquated video conferencing applications cost the DNR $1,330 per month to maintain.  Since its migration, the article states that DNR’s staff has participated in nearly 3,500 meetings using this cloud-based application, saving the department more than $320,000.

When purchasing cloud computing tools, the government’s procurement process remains the same as it should be for any other purchase.  It requires a thorough knowledge of the agency’s mission, its current inventory of equipment and applications, possible interagency collaborations, and strategic technology and contract development.  Data protection and portability; security and privacy; protective contracting vehicle clauses; backup solutions; effective program management; and user consultation and training must also be performed throughout the process.

To help government agencies navigate the pitfalls of cloud investments, Citizens Against Government Waste has published two issue briefs to encourage the use of best practices when modernizing Information Technology investments:  Cloud Computing 101:  A Brief Introduction, and Cloud Computing 201: Guidelines for Successful Cloud Investments.

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The following Wastewatcher was composed by Jordan M. Hicks IV.

Cybersecurity has been a very prevalent issue on Capitol Hill recently with legislation such as The Stop Online Piracy Act (SOPA) and The Protect IP Act (PIPA) being introduced before Congress. Both of these bills pertain to issues of piracy and online theft, and the negative impact they can have on the economy. As concerns over these issues have increased, the issue of cyber attacks and their threat to national security has grown rapidly.

Last week, the House passed the Cyber Intelligence Sharing and Protection Act  (CISPA) with a vote of 248-168.  This legislation was introduced by Rep. Mike Rogers (R-Mich.) in November 2011 to address the ongoing concern of the growing number of cyber attacks on both government and private sector information technology (IT) networks.

A cyber attack is a breach to a network’s security that can affect the operation and stability of the network, and any systems associated within the network.  Cyber attacks could potentially disrupt communications in transportation systems and impact electrical grids causing chaotic scenarios.  These attacks can also include the theft of personal and private information used for financial gain and other malicious schemes.

CISPA would provide the U.S. Government the authority to share data back and forth with private organizations.  This sharing of information would be used to analyze threats and breaches to networks in hopes of thwarting future attacks as well as locating the source of the attacks.

The legislation has generated contentious debate over several privacy issues.  Opponents believe it would allow the government to unjustifiably access personal and private information of American citizens using the Internet for legitimate purposes.  Last week, The White House issued a statement strongly opposing the bill and included the recommendation of a Presidential veto.

On the other side, several major corporations including Facebook and IBM support CISPA and believe it is a step in the right direction to combat potential cyber attacks.  Microsoft originally was in support of the bill, but according to an article released this week, has had a “change of heart” due their own concern with privacy issues related to CISPA

Prior to final passage, several amendments were offered to address the privacy concerns of the bill’s opponents.  Rep. Bob Goodlatte (R- Va.) offered an amendment to ease concerns over the scope of the government’s access to data.  The amendment states that it would “narrow definitions in the bill regarding what information may be identified, obtained, and shared.”  Rep. Benjamin Quayle (R- Ariz.) offered an amendment that would clarify the purpose for the government use of cyberthreats information by  limiting it to “(1) Cybersecurity; (2) investigation and prosecution of cybersecurity crimes; (3) protection of individuals from the danger of death or physical injury; (4) protection of minors from physical or psychological harm; and (5) protection of the national security of the United States.”

While the bill must now be considered by the Senate, the White House has already issued a veto threat citing privacy concerns with its current legislative language.  Addressing any threat concerning the United States or its citizens is of the utmost importance. Whether this includes physical or digital threats, it is important that the country is prepared to address them as quickly and efficiently as possible.

The future of cybersecurity legislation pending before Congress remains to be seen, but with bipartisan support on cybersecurity legislation that takes a balanced approach to protecting both critical infrastructure and individual privacy, cyber attacks and those responsible can be quelled and brought to justice.

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The following Wastewatcher was composed by Erica Gordon:

In this critical election year, Americans will not only cast their votes for elected officials at all levels of government including President of the United States; they will also decide on several state ballot initiatives.  Some of these votes will be cast long before November 6.  Californians, in particular, will have an expensive and wasteful idea on their June 5 ballot: Proposition 29.

Carefully packaged as a cancer research initiative, there is more to Prop 29 than meets the eye.  The measure would place a $1 levy on each pack of cigarettes sold in California, raising an estimated $735 million annually.  This “rob Peter to pay Paul” scheme would create a new state commission that will be governed by a nine-member board comprised of university, cancer center, physician and advocacy group representatives.  These political appointees will be allowed to spend $110 million annually on office space and facilities, plus an additional $15 million on consultants, salaries and travel.  These commissioners will be totally unaccountable to taxpayers since Prop 29 specifically prohibits the Governor, Legislature and even the state auditor from making changes to the initiative for 15 years, even in the case of fraud or waste.

The lack of transparency and accountability for this new cancer research commission is not the only troubling fact about Prop 29.  The 4,000-word measure provides no requirement that the money raised stay in the state.  This means that Californians may end up funding projects and creating jobs in other states at their own expense.

The federal government already spends $6 billion annually on cancer research and the state of California already funds $70 million per year on anti-tobacco programs.  Creating a duplicative program would not only be extremely wasteful, it would burden Californians with the responsibility of funding medical research that ultimately benefits everyone in the country.  Cancer research has been and should continue to be funded by the federal government, non-profit organizations, and private companies.

Additionally, California, which is infamously recognized for its massive budget failures, has many unmet needs.  An April 27, 2012 Los Angeles Times op-ed noted, “California can’t afford to retain its K-12 teachers, keep all its parks open, give public college students the courses they need to earn a degree or provide adequate home health aides for the infirm or medical care for the poor.  If the state is going to raise a new $735 million, it should put the money in the general fund rather than dedicating it to an already well-funded research effort.” It is clear that California has misplaced priorities if it chooses to spend money creating duplicative programs at the expense of other services.

Raising taxes to create a superfluous program is government waste at its finest.  History has shown that raising excises taxes does not produce projected revenue, as such tax increases drive purchases across state lines or to untaxed or lower-tax venues, like Native American territories and the Internet.  When California increased its cigarette excise tax by 50 cents in 1999, taxable cigarette sales dropped by 26 percent in two years. If the tobacco tax revenue envisioned under Prop 29 fails to materialize, which is inevitable, politicians in Sacramento will end up raising even more taxes to make up the shortfall.

Increasing cigarette taxes will also have a depressing effect on California consumers and small businesses.  The Congressional Budget Office has reported that cigarette excise taxes are the most regressive type of excise tax and disproportionately impact the poor and those living on fixed incomes.  Additionally, raising cigarette taxes, especially during a weak economy, will slow business and negatively impact state retailers.  According to the National Association of Convenience Stores, cigarettes are the top revenue generator, accounting for 35.9 percent of in-store sales nationwide.

Prop 29 will burden consumers with higher taxes in the name of cancer research; meanwhile government bureaucrats will be allowed to spend taxpayers’ hard-earned dollars on a duplicative and unnecessary program without any accountability.  Americans know government waste when they see it.  This June, Californians will see it on their ballots and vote ‘NO’ on Prop 29.

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One would think that the government saving approximately $5.5 billion annually by using cloud computing tools would be good news.  However, according to a recent survey conducted by the MeriTalk Cloud Computing Exchange, the federal government could be doing much better.

An April 27, 2012 Federal Computer Week article highlighted the results of a survey conducted by MeriTalk which estimates that by using cloud computing tools, federal agencies have saved approximately $5.5 billion annually.  The article also suggests that based on the survey results, had there been broader adoption of cloud computing tools by the federal government, it could have potentially saved $12 billion per year.

The survey of 108 federal Chief Information Officers (CIOs) and Information Technology (IT) managers, published in “Cloudy with a Chance of Savings,” seeks to evaluate from their perspective how well the federal government is integrating cloud computing services into its IT infrastructure.  With the administration’s “cloud first” strategy for making new IT purchases, this survey, along with a September 5, 2011 study conducted by the Poneman Institute, provides an interesting look at cloud acceptance among the federal IT workforce.

In a May 1, 2012 Talkin’ Cloud article, the survey results were broken down by categories of obstacles to cloud adoption.  According to this article, eighty-five percent of respondents cited security concerns as the largest obstacle to cloud implementation followed by thirty-eight percent citing cultural roadblocks to implementation within federal organizations. Other obstacles listed in the article included department leadership opposition to cloud adoption (twenty percent); program managers (eighteen percent); and legal counsel (seventeen percent).

Some of these findings correlate with those from the Poneman Institute’s study, which also highlighted potential obstacles to cloud adoption including lack of suitable applications, concerns about safety and security, and the speed in which they were expected to move three services to the cloud under the administration’s “cloud first” strategy.  While safety and security concerns are understandable with the current cyberthreats against our nation’s infrastructure, without wider acceptance of cloud computing solutions by an organization’s workforce, agency CIOs and IT managers will continue to have difficulty in making that transition.

Until IT security concerns are addressed and the federal workforce becomes more open to transitioning to the cloud, it will be difficult for the federal government to realize the full savings potential that can be achieved by using cloud computing.

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