a review of the department of fish and game · the dfg’s role over time also have translated into...

Legislative Analyst’s OfficeElizabeth G. Hill, Legislative Analyst September 3, 1991

LAO

E X E C U T I V E S U M M A R YFor years, the Department of Fish and Game (DFG) has been plagued by

chronic management and fiscal problems. In the Supplemental Report of the1990 Budget Act, the Legislature directed the Legislative Analyst’s Office toconduct this study so as to provide some background about and guidance insolving the DFG’s fiscal and other problems. In it, we focus on three key issuesthat we found hamper the department’s performance. These issues include: (1)the lack of clarity of the department's mission, (2) organizational problems, and(3) fiscal concerns.

Regarding its mission, the DFG historically has provided services andprograms primarily for those that use or consume the state’s wildlife and naturalhabitat resource, such as individuals who hunt and fish. As California’spopulation has grown, leading to increasing urbanization, this traditionalconstituency group of the DFG has diminished steadily. Meanwhile, theresponsibilities of the DFG relating to general habitat protection and endan-gered species protection have increased, requiring the DFG to expand servicesand programs that protect the overall resource base. Today, the department’smission statement reflects this dual and sometimes conflicting role. What islacking, however, is a clear focus on exactly what the DFG’s relative prioritiesare, and thus how it should allocate its fiscal resources among its competingobjectives.

Regarding organizational problems, the DFG’s organizational structure hasdrifted gradually away from its original, decentralized form to a more centralizedorganization. Communication problems pervade the organization, as staffstruggle with balancing directives from headquarters and those from regionalmanagers. These communication problems hamper the effectiveness of staff toimplement programs.

Regarding fiscal concerns, the demographic changes that have affectedthe DFG’s role over time also have translated into a significant change in theDFG’s funding base. Whereas in the late 1950s hunting and fishing licensebuyers contributed nearly 100 percent of the revenues used to fund the DFG,

A Review of theDepartment of Fish and Game

Issues and Options for Improvingits Performance

Special Study

Legislative Analyst's Office

E X E C U T I V E S U M M A R Y C O N T ' D

today these individuals contribute barely half. Replacing these sources areincreasing amounts of environmental funds, such as the Environmental LicensePlate Fund and the Public Resources Account (Proposition 99). The DFG’s fiscalproblems include short-term difficulties in accurately estimating revenues,and a longer-term problem in that anticipated future revenues will be insufficientto keep pace with projected program demands. In addition, complex statutoryand constitutional restrictions limiting the uses of the department’s own specialfunds serve to distort the budgeting process and obstruct effective policyimplementation. For example, some programs are funded because they havea special fund dedicated for that program’s purpose, while other programs failto receive funding due to a lack of a dedicated fund source, even if theunfunded programs are of a higher priority .

In order to address the DFG’s fiscal and other problems, the Legislature andthe administration should take a number of steps. Specifically:

• The Legislature should reconcile the dual missions that the DFG currentlytries to implement simultaneously, setting a clear policy of priorities forthose times when the resource use and the resource protection missionsconflict.

• The DFG should re-evaluate how it structures its organization and allocatesstaff.

• The DFG should continue to make improvements in its revenue-estimatingmethodologies in order to avoid proposing the expenditure of funds notlikely to materialize, thus creating short run “fiscal crises”.

• The Legislature should, when appropriating funds for support of the DFG’sprograms, establish a policy of (1) considering the level of uncertainty in thedepartment’s revenue estimates and (2) establishing prudent reserveswhich reflect the level of uncertainty of these estimates.

• The Legislature should consider a number of options to address the DFG’slong run fiscal problem of program demands exceeding available re-sources. For example, it could (1) reduce workload by eliminating orreducing some DFG operations, (2) expand the DFG’s financial resourcebase, through greater use of broad-based funding and/or various user feesor “impact fees,” and (3) improve the allocation of available resourcesthrough better priority setting.

• The DFG should institute a planning process in order to determine long-termobjectives and set annual program priorities.

• The Legislature should (1) continue to support departmental operationsprimarily from special funds and (2) repeal various overly narrow statutoryand constitutional constraints currently placed on the use of these funds. Incombination with the previous step, this would enable the Legislature toestablish priorities for the department and then fund the highest prioritiesfirst.❖


KEY FACTORS UNDERLYINGTHE DEPARTMENT’S TROUBLES

As noted above, in order to identify possiblereforms that offer potential for providing long-term relief to the DFG’s fiscal and other prob-

lems, some of the key factors underlying theDFG’s troubles need to be highlighted. Al-though many factors have led to the ongoingfiscal problems and other troubles facing thedepartment, three major factors stand out.These include: (1) decline in the DFG’s tradi-tional constituency, (2) increased responsibili-

GENERAL BACKGROUNDON THE DEPARTMENT OF FISH AND GAME

CHRONIC PROBLEMS HAVEPLAGUED THE DEPARTMENT

For years, the Department of Fish and Game(DFG) has undergone close scrutiny by both theLegislature and various state administrativecontrol agencies in response to chronic manage-ment and fiscal problems that have plagued thedepartment. Although this attention has led toperiodic reforms in an attempt to address theseissues, the department continues to have prob-lems. In recent years, for example, the Legisla-ture has been faced with a recurring annualproblem of shortfalls in the revenues availableto support the department’s proposed budgets.Moreover, several plans previously adopted bythe Legislature to provide new funding for thedepartment have fallen well short of their ini-tial revenue goals.

PURPOSE OF THIS ANALYSIS

In the Supplemental Report of the 1990 Bud-get Act, the Legislature directed the LegislativeAnalyst’s Office to conduct a study that wouldprovide some background about and guidance

in solving the DFG’s fiscal and other problems.This Special Study has been prepared in fulfill-ment of that requirement. In it we (1) providenecessary background information about theDFG, (2) explore some of the causes of theapparent mismatch between program require-ments and funding at the DFG, and (3) offersome avenues by which the Legislature couldpursue resolution of the DFG’s fiscal and otherproblems. We do not attempt to evaluate all ofthe major programs of the DFG, or offer aspecific proposal for an institutional reorgani-zation. Rather, we focus on the fiscal and vari-ous other aspects of the DFG’s problems and,where possible, identify the fundamental policyissues the Legislature must resolve prior toimplementing any funding and organizationalsolutions aimed at improving the DFG’s effi-ciency and effectiveness.

In order to properly set the stage for thisanalysis, it is first important to provide back-ground information regarding the Departmentof Fish and Game, especially regarding thosefactors which most appear to underlie the DFG’sbasic problems. This section provides this basicbackground information.

INTRODUCTION


Figure 1

Changes in Hunting in California

Hunting Has DeclinedSignificantly Since 1980

• From 1980 to 1989, the sale ofhunting licenses decreased by26 percent.

• In 1988-89, about 400,000 hunt-ers (1.4 percent of the state’spopulation) bought hunting li-censes. This compares to560,000 hunters (2.4 percent ofthe population) in 1980.

Possible Reasons forDeclining Interest in Hunting

• Decreasing wildlife populationsdue to loss of open land.

• Declining rural population.

• Changes in cultural attitudes.

• High total costs (includingexpenses for licenses,equipment and transportation)for hunting activities.

Environmental ReviewProcess Affects Hunting

• State Supreme Court decisionin Wildlife Alive v. Chickering(1976) subjected the depart-ment’s hunting season regula-tions to CEQA.

• Subsequent lawsuits showedthat the department’s environ-mental review was inadequate,resulting in the suspension ofseveral hunting seasons.

ties imposed on the DFG by the Legislature inresponse to growing demographic and environ-mental pressures on wildlife and natural habi-tat, and (3) constitutional and statutoryrestrictions on the use of the funds availableto the DFG.

Decline in the DFG’s TraditionalConstituency

Historical perspective. The DFG can trace itsroots back to 1870 when the Legislature createdthe Board of Fish Commissioners to provide forthe restoration of fish in California waters.Initially focused on planting imported fish andoperating hatcheries, the commissioners’ au-thority was soon expanded to regulate huntingmethods. By 1951, the Legislature expandedthe scope of this original commission and cre-ated the present Department of Fish and Game.The major constituency groups of the DFG atthat time included: sportsmen and commercialfishermen who derived direct long-term ben-efits from the department’s activities; agricul-tural interests who relied on the DFG to miti-gate damage to crops by migratory waterfowland killing of livestock by mountain lions andother wild animals; and conservationists whowere concerned generally with preventing thewholesale destruction of the state’s wildliferesources. The department’s major responsi-bilities initially included: enforcement of statefish and game laws; importation and propaga-tion of fish and game; the establishment andmaintenance of fish hatcheries; the operationof game farms, game management areas, andpublic shooting grounds; the control of preda-tors; and research to support the above work.

Changes have taken place. Since those earlydays, many changes have taken place in thestate. Figures 1 and 2 provide summary infor-mation on the apparent decline in hunting andfishing over the past decade and identify someof the likely causes for these changes. Figure 3(next page) graphically illustrates the steadydecline in fishing. The trend is especially strik-ing when considered in the context of an evergrowing population -- not only have the num-bers of Californians hunting and fishing fallen


Overall, Sport Fishing Has DeclinedSignificantly Since 1980

• From 1980 to 1990, the sale of yearlyresident inland fishing licensesdecreased by 29 percent.

• In 1989-90, about 1.6 million fishers (5percent of the state’s population)bought yearly resident fishinglicenses. This compares to 2.3 millionfishers (10 percent of the state'spopulation) in 1980.

• Some of this decline has been offsetby increased sales of the new yearlyresident ocean fishing license andone-day inland fishing license.

Possible Reasons for DecliningInterest in Sport Fishing

• Changing state demographics.

• Recent drought conditions.

• Increased cost of fishing licensesover time (for example, a yearlyresident inland license now costs$22.50 compared to $5.75 in1981).

Overall, Commercial Fishing HasChanged Significantly Since 1976

• From 1976 to 1989, the total numberof pounds of commercial fish landedin the state declined by 47 percent.

• A major reason for this drop has beenthe decline of the tuna and anchovyfisheries in the state.

• During this same period, the numberof commercial fishers has fallen fromover 20,000 to about 15,000, adecrease of 25 percent.

• Catches of some specific fisheries,such as sea urchin, haveincreased in recent years due tothe development of export

Figure 2

Changes in Sport and CommercialFishing in California“Not only have the numbers of

Californians hunting andfishing fallen as a proportionof the overall population, butthey have fallen in absolute

terms as well.”

as a proportion of the overall population,but they have fallen in absolute terms aswell.

Why has this decline occurred? A vari-ety of complex and interconnected issueshave contributed to this decline. For ex-ample, population growth and increasingurbanization have put pressure on thehabitat which in turn has reduced theavailability of fish and game species, par-ticularly near urban centers. As a result,hunters and fishers must travel farther toenjoy good hunting and fishing opportuni-ties, thereby incurring greater time andexpenses. Likewise, demographic changesin the state’s population have given rise toa greater diversity of recreational interestscausing hunting and fishing to face greatercompetition from recreational opportuni-ties closer to home. Such factors suggestthat the decline in hunting and fishing is(1) largely beyond the ability of the DFG tocontrol and (2) unlikely to reverse itself inthe foreseeable future. These declines havesignificant fiscal implications for the DFGbecause historically the department hasrelied heavily upon fees collected fromhunters and fishers for a substantial por-tion of the DFG funding base.


81 82 83 84 85 86 87 88 89 90 91 92

0.2

0.4

0.6

0.8

1.2

1.4

1.6

1.8

2.2

2.4

2.0

1.0

“The Legislature hasgradually

broadened the scopeof legal responsibili-

ties the DFG mustuphold, including

increasing responsi-bility for nongameprograms and forgeneral environ-

mental protection.”

In general, the Legislature has recognizedthat the department could not perform theseexpanded responsibilities solely with its histori-cal level of resources. Consequently, resourceshave been expanded over time. Ten years ago,in 1981-82, the DFG received $61 million andemployed 1,494 personnel years. The 1991-92Budget Act provides the DFG with $152 millionand roughly 1,850 personnel years with whichto implement a broad range of support andcapital outlay activities. Adjusted for inflation,the change in funding represents a 62 percentgrowth during this 10-year period.

Despite the past funding increases providedto the department, however, the legislation

Figure 3

Department of Fish and GameResident One-Year Fishing License Sales

1981 through 1992 (in millions)

Adjusted for inflation, thedepartment's expenditures grew by

62 percent during the 1980s. Despitethis, funding has not kept pace

with program demands.

Increasing Responsibilities Borne by theDFG

The second key factor underlying the DFG’sdifficulties relates to the increased responsibili-ties that have been given to it over time.

While the DFG has found its traditional recre-ation base steadily eroding over time, theLegislature has gradually broadened the scopeof legal responsibilities the DFG must uphold,including increasing responsibility for nongameprograms and for general environmental protec-tion. Figure 4 details the evolution of this broad-ened mission.

Sufficient funding has not always been pro-vided. As can be seen in Figure 4, since 1960new laws have required the DFG to broaden itsfocus to include programs that protect rare,threatened and endangered species, and en-gage in public education programs for allCalifornians, including “nonconsumptive us-ers” (that is, individuals who enjoy fish andwildlife but choose not to hunt or fish).


implementing many ofthese added responsibili-ties did not include spe-cific funding mechanismsto implement the mea-sures, thus requiring (1)the Legislature to appor-tion scarce existing re-sources to support thenew activities at the ex-pense of other spendingneeds, or (2) the DFG toshift priorities and fundthe new workload fromits existing funding base.For example, implemen-tation of the CaliforniaEnvironmental QualityAct of 1970 (CEQA) im-posed substantial (andsteadily increasing)workload demands on de-partment staff by requir-ing the department to re-view and comment on alldevelopment projects thatcould have a deleteriousimpact on fish and wild-life and their habitat. Inorder to meet thisworkload requirement,the DFG redirected thetime of some fish andwildlife biologists awayfrom traditional researchand monitoring activitiesand towards reviewingdevelopment projects. TheCEQA-related workloadhas risen dramatically asdevelopment pressures inthe state continue tomount, particularly in ar-eas like the Sierra foothillsthat provide extensivehabitat to fish and wildlifeand that are developing rap-idly.

Early Evolution• Establishment of game refuges provided protected

habitat for nongame as well as game species.

• Early laws designated protected species: forexample, sea lions (1865) and certain species ofbirds, fish and mammals (1933).

Evolution of Responsibilities Since the 1960sProtection and restoration of threatened and endangeredfish, wildlife and native plants; management ofendangered and other nongame species:

• Creation of Special Wildlife Investigations program(1968).

• Ecological Reserve Act (1968)

• California Species Preservation Act (1970)

• Endangered Species Act (1970)

• Statutory restrictions on possession andtransportation of live wild animals (1974)

• Cooperative agreement with the U.S. Fish andWildlife Service under the 1973 federal EndangeredSpecies Act (1976)

• California Native Plant Protection Act (1977)

• Establishment of the Natural Heritage Division (1989)

Acquisition and management of lands to protectthreatened and endangered species and uniqueecosystems:

• Wildlife Conservation Act (1947); established theWildlife Conservation Board to acquire and developwildlife resources and provide public recreationalaccess

• Ecological Reserve Act (1968)

• Creation of Significant Natural Areas Program (1981)

Public education and other services for “nonconsumptiveusers”:

• Native Species Conservation and Enhancement Act(1974)

• Project WILD for K-12 students (1983)

• California Wildlands Program (1989)

Figure 4

Department's Evolving Responsibilities for NongameWildlife and Environmental Protection

CONTINUED ONNEXT PAGE


Figure 4 - CONTD

Limits on the Use ofAvailable Funds

A third key factorunderlying the DFG’stroubles relates to the con-straints imposed on howits resources can be used.

Where do the depart-ment’s revenues comefrom? Since the 1950s, thesources of funds for theDFG have changed signifi-cantly. Figure 5 comparesthe DFG’s funding sourcesin 1958-59 to 1991-92. Asthe figure shows, theproportion of the DFGbudget that comes fromhunting and fishing li-censes and taxes has de-clined significantly overtime. Whereas in 1958-59,the DFG was entirelydependent on this rev-enue source, in 1991-92,only slightly more thanhalf of the budget willcome from these licenserevenues and taxes, in-cluding federal excisetaxes on hunting and fish-ing equipment. The re-mainder will come from avariety of fund sourcesincluding taxes on crudeoil, cigarette taxes (Propo-sition 99), personalized li-cense plates, and the Gen-eral Fund.

In the past, the depart-ment has successfully ar-gued for hunting and fish-ing fee increases to (1)compensate for inflation-ary cost pressures, and (2)make up for revenue lossesresulting from sales offewer licenses. Although

Evolution of Responsibilities Since the1960s - CONTD

Review of environmental impact reports (and functionalequivalents) under CEQA:

• California Environmental Quality Act (1970)

Protection and acquisition of water resources for fishand wildlife:

• Water project review and planning:

— Creation of the Water Projects Branch,pursuant to federal law (1959)

— Davis-Dolwig Act (1961)

— Porter-Cologne Act (1969)

• Instream flow protection:

— Recommendation process for state waterboard permit applications

— Appellate court decision in Cal Trout et al. v.Superior Court of Sacramento County (1990)

— Water Rights Permitting Reform Act (1988)

• Water habitat protection:

— California Coastal Act (1976)

— Suisun Marsh Preservation Act (1977)

• Stream protection:

— Streambed alteration notification (1961)

— Streambed alteration agreements (1970)

• Water quality protection:

— Creation of the Water Projects Branch (late1950s)

— Fish and Wildlife Water Pollution ControlLaboratory (1967)

— Porter-Cologne Act (1969)

• Oil spill prevention and response:

— State Oil Spill Contingency Plan; StateInteragency Oil Spill Committee chaired by thedepartment (mid-1970s)

— Oil Spill Prevention and Response Act (1990)

• Water rights acquisition


Sportfishinglicensesand feesa

Generalenvironmentalb

Commerical fishingpermits and fees

Huntinglicensesand feesa

Sportfishinglicensesand feesa

Hunting licensesand feesa

Commerical fishing permits and fees

Court fines/miscellaneoussources

1958-59

1991-92a Includes federal excise tax revenues.b Includes, among other things, Oil Spills Prevention and Adminstration Fund, Environmental License

Plate Fund, Public Resources Account (Proposition 99), developer fees (AB3158), and General Fund.

Source: 1958-59 data from Department of Fish and Game report to the Governor, 1959. 1991-92 datafrom 1991 Budget Act, 1991-92 Governor's Budget, and DFG.

fee increases during the mid-1980s went beyondcompensating for inflationand funded programgrowth, it is highly doubtfulthat the DFG will be able tomaintain that level of rev-enue in the future, given thesocioeconomic changes inthe state’s population as dis-cussed earlier in this analy-sis. In fact, there is evidenceto suggest that the higherthe level of fees, the morefuture fee increases will con-tribute to a further reduc-tion in license sales. Licensesales revenues currently aredropping in real (inflation-adjusted) terms and may, inthe future, drop in nominalterms as well. Thus, thisfund source can no longerbe relied upon as the princi-pal source of income for thisdepartment in the future.N e v e r t h e l e s s ,as Figure 6 (next page)shows, there has been pres-sure to increase DFG fund-ing and the department’sbudget has been increasedfairly steadily in recentyears, even after adjustingfor inflation. To accomplishthis and mitigate the ero-sion of the department’straditional funding base, theLegislature has appropri-ated a number of differentfund sources for support ofthe DFG’s programs.

The department’s fundingfor 1991-92. In the 1991-92budget the DFG will spendfunds from over ten differ-ent sources totalling $152million. These funds include:

Court fines/miscellaneoussources

Figure 5

Department of Fish and GameComparison of Sources of Funding Over Time

1958-59 and 1991-92


a Data are adjusted for inflation using constant 1978-79 dollars, include reimbursements, and arefor fiscal years ending in years shown.

79 80 81 82 83 84 85 86 87 88 89 90 91 92

20

40

60

$80

Figure 6

Department of Fish and GameAnnual Expendituresa

All Fund Sources (in millions)1978-79 through 1990-91

• Statewide hunting and fishing revenues($64 million). These revenues are depositedin the Fish and Game Preservation Fund(FGPF) and are made up of revenues fromhunting and fishing licenses as well ascommercial fishing permit fees. The fundsin the FGPF are divided into (1) thenondedicated account, which may be usedfor a variety of hunting and fishing pro-grams and (2) a series of dedicated accounts,which may be used onlyfor specific purposes re-lated to the specialstamps and permits thatfund the dedicated ac-counts.

• A variety of “generalenvironmental funds”($43 million). Thesefunds include, amongothers, the Environ-mental License PlateFund (ELPF -- $12.3million), the Public Re-sources Account (PRA-- $4.4 million), the OilSpill Prevention andAdministration Fund($14.7 million), Propo-sition 70 of 1988 ($3.2million), and a new feetotalling $4.3 millionimposed on developersby the Legislature in Ch1760/90 (AB 3158,Costa).

“License sales revenues currentlyare dropping in real (inflation-adjusted) terms and may, in thefuture, drop in nominal terms as

well.”

• Federal funds ($25 million). Most of thefederal funds available to the DFG comefrom excise taxes levied on hunting andfishing equipment. In addition, the U.S.Army Corps of Engineers and the Bureau ofLand Management provide funds for miti-gation hatcheries. A small amount of fund-ing comes from federal Endangered SpeciesAct funds, but not on a consistent ongoingbasis.

In addition to the special and federal fundsources discussed above, the DFG will receiveapproximately $4 million from the General Fundand $16 million in reimbursements in 1991-92.

As workload demands mount and new pro-grams come into place, the trend towarddiversification of fund sources will undoubt-edly continue during the next decade, gradu-ally further lessening the relative importance ofhunting and fishing license revenues to thedepartment’s revenue base.


California Constitution, Article 16,Section 9:

”Money collected under any state lawrelating to the protection or propagation offish and game shall be used for activitiesrelating thereto.” (Added November 5, 1975by Proposition 8)

Fish and Game Code Section 711:

”It is the intent of the Legislature to ensureadequate funding from appropriate sourcesfor the department. To this end, theLegislature finds and declares that:

(a) The costs of nongame fish and wildlifeprograms and free hunting and fishinglicense programs shall be providedannually in the Budget Act by appropriatingmoney from the General Fund and sourcesother than the Fish and Game PreservationFund to the department for these purposes.

(b) The costs of commercial fishingprograms shall be provided solely out ofrevenues from commercial fishing taxes,license fees, and other revenues, and fromreimbursements and federal funds receivedfor commercial fishing programs.

(c) The costs of hunting and sportfishingprograms shall be provided solely out ofhunting and sportfishing revenues andreimbursements and federal funds receivedfor hunting sportfishing programs. Theserevenues shall not be used to supportcommercial fishing programs, free huntingand fishing license programs, or nongamefish and wildlife programs.” (Added byStatutes of 1978, Chapter 855, AB 3416,Gualco)

Figure 7

Department of Fish and GameConstraints on Legislative Flexibility

Many funding restrictions exist. This depart-ment, primarily funded from special funds,faces an intricate and complex set of restric-tions regarding how its funds must be used.Figure 7 summarizes the most significant of therestrictions on the DFG’s use of its major fundsource, the FGPF.

As Figure 7 shows, constitutionally the depart-ment must use money collected from huntersand fishermen to support programs benefitinggame species of fish and wildlife. This generallyhas been interpreted by the department to meanprograms that focus largely on species of fishand wildlife that can be hunted or fished, suchas hatchery operations. The rationale for theconstitutional restriction on the use of thedepartment’s hunting and fishing license rev-enue appears to be a widely held belief byhunters and fishers that, historically the onlymoney spent by the state to benefit hunting andfishing interests was the license revenue. Con-sequently, they saw strong reason to protectthis source of support from being used for otherstate purposes. In fact, however, it appears thatother state funds are providing a substantialportion of the support for hunting and fishingprograms. Currently hunters and fishers actu-ally receive extensive levels of service from avariety of fund sources. Included among theseservices is the Wildlife Conservation Board

“As workload demands mount andnew programs come into place, the

trend toward diversification offund sources will undoubtedly

continue during the next decade,gradually further lessening the

relative importance of hunting andfishing license revenues to thedepartment’s revenue base.”


programs and (2) no other funds (with theexception of federal funds) may be used to fundhunting and fishing programs. These otherfunds must be used for general environmentaland nonconsumptive programs.

In addition to the above restrictions on the useof the FGPF, the department also must manageits programs within the statutory restrictionsplaced on the use of its other major fund sourcesincluding the ELPF and the PRA (Proposi-tion 99). For example, the PRA must be dividedequally among programs and projects acrossstate agencies that benefit fish, waterfowl andwildlife. Existing law further requires that theDFG use PRA funds only to supplement pro-grams, not to supplant existing fund sources.This has the effect of constraining thedepartment’s flexibility in allocating its baselineexpenditures if it is going to maximize the use ofPRA funds.

Finally, the department receives funds from18 different special dedicated accounts. Each ofthese accounts derives its revenues from a spe-

which spends $750,000 per year from horseracing fees (which otherwise would go to theGeneral Fund), as well as multi-million dollaroutlays of general obligation bonds for land

“. . . today hunters and fishers payfor only a portion of the hunting

and fishing opportunities providedthem by the state.”

acquisitions, most of which are designated forwildlife areas open for consumptive uses. Theprincipal and interest expenses for these pur-chases are paid by the General Fund and thustaxpayers generally. In addition, large sums ofmoney from the State Water Project have beenexpended over the years for hatcheries.

Overall, it is not clear exactly how much oftotal state expenditures beneficial to fish andgame currently are actually contributed by theirdirect beneficiaries. In a 1964 study conductedby the Legislative Analyst’s Office, the avail-able data at that time suggested that only abouthalf of the total state expenditures for programsbeneficial to fish and game were derived fromhunters and fishers. Given (1) the recent in-crease in bond expenditures, (2) the increase inthe variety of new fund sources allocated to theDFG, and (3) the gradual decline in huntingand fishing revenues, it is safe to say that todayhunters and fishers pay for only a portionof the hunting and fishing opportunities pro-vided them by the state.

There are also statutory restrictions on the useof the FGPF. Specifically, the department can-not use nongame monies, or monies derivedfrom sources other than federal funds andhunting and fishing revenues, to support hunt-ing and fishing programs. Thus, the depart-ment theoretically must maintain “closed loops”for funding its programs — (1) the bulk of theFGPF may be used only for hunting and fishing

“. . . the various intertwinedfunding restrictions facing the DFG

can serve to invert the budgetprocess.”

cific group of individuals and each accountmust be spent in a narrowly defined manner, asestablished in the enabling legislation and imple-mented through the efforts of various advisorycommittees. Examples of dedicated accountsinclude the Herring Tax Dedicated Account,the Augmented Deer Tags Dedicated Account,and the Private Wildlife Areas Dedicated Ac-count.

Efficient allocation of resources can be im-paired. As discussed below in greater detail, thevarious intertwined funding restrictions facingthe DFG can serve to invert the budget process.Normally, for departments supported by funds


precluding their implementation. Thus, theDFG’s funding restrictions tend to constrainboth the executive branch as well as the Legis-lature in exercising their responsibility to setpriorities based on actual program needs.

With this general overview and backgroundinformation in mind, we now turn to a moredetailed examination of the DFG and its prob-lems. We first discuss in more detail the issue ofwhat the DFG’s mission is. We then examinehow effective the DFG is in meeting its objec-tives, and what the issues, options, and strate-gies are for improving its effectiveness.

During our review of the department’s pro-grams and policies, we focused on three broadissue areas that we found hamper the DFG’sefforts to meet its objectives. These issue areas,which our analysis indicates clearly warrantattention, include: (1) the need for greaterclarity of mission, (2) organizational issues, and(3) fiscal issues.

THE EFFECTIVENESS OF THE DFG: HOW WELL DOES ITMEET ITS OBJECTIVES?

WHAT IS THE DFG’S MISSION?

As one of the oldest agencies in state govern-ment, the DFG has evolved slowly over the pastcentury. Over the years, the department hasstruggled to develop a mission and identityconsistent with the needs of the state as thestate changes and grows, and to develop pro-grams and policies to achieve its mission. Todaythe DFG essentially has a dual mission. First,there is its historical mission of promoting andregulating traditional resource use activitiessuch as hunting and fishing for a game species.Examples of programs and activities support-ing this mission include operating fish hatcher-ies and supervising and managing hunting

events. Second, there is the department’s newerfocus of promoting resource protection for allCalifornia native plants, fish and wildlifethrough such programs as reviewing the im-pact of development on habitat and maintain-

The issue areas clearly warrantingattention include: the need to

reconcile the dual mission of theDFG; various organizational

problems; and fiscal issues.

which are relatively unrestricted in their uses— for example, General Fund departments —the Legislature first establishes priorities andthen funds the priorities to the extent that fundsare available. In the DFG, on the other hand, wehave found that the requirements that funds beused for specified purposes tends to dictate theLegislature’s priorities. This means that theremay be certain activities which are urgent andpressing but may lack available funds, thus

“The DFG’s funding restrictionstend to constrain both the executivebranch as well as the Legislature inexercising their responsibility to setpriorities based on actual program

needs.”


citizenry of this state now and in the future.”This draft (1) recognizes that conflicts may existbetween resource protection and resource useactivities and (2) establishes priorities for theseactivities by placing ecological values above usevalues. It is our understanding, however, thatthe department now is considering modifyingthis draft statement to remove the explicit pri-orities, leaving the DFG with much the samemission statement and dilemma as before —that is: what specific criteria should the depart-ment meet in allocating scarce dollars betweenprograms primarily focused on resource useversus programs primarily focused on resourcepreservation?

Different Objectives May Conflict

In actual practice, the dual missions of theDFG can in many instances both be met throughthe same programs. For example, activities thatprotect or restore habitat for the maximumdiversity of species can further the objectives ofboth resource protection and resource use. Sincegame and nongame species coexist in habitats,protection of habitat or restoration of nativehabitat improves the ecological health of thearea as well as providing better hunting andfishing opportunities.

In other cases, however, some activities thatpromote one objective can conflict with andundermine efforts to promote the other. Anexample of such a situation is the enhancementand propagation of non-native species such asbrown trout and striped bass. Such species,although highly valued from a recreationalpoint of view, compete for food and habitatwith native plants and animals which the de-partment also is trying to enhance and recoverthrough various programs and studies.

The DepartmentLacks a Clear Mission Focus

We recommend that the Legislature (1) deter-mine the primary mission of the departmentand (2) direct the department to implement itsprograms and allocate its resources consistentwith this primary mission.

ing a centralized data base on threatened, rare,and endangered species. The key to evaluatingthe DFG involves assessing (1) its effectivenessin succeeding in its dual mission and (2) how itseffectiveness can be improved.

The Basic Problem —Balancing Different Objectives

Both of the dual objectives of the DFG —resource use and resource protection — arereflected in the department’s mission state-ments over the past decade. For example, the1991-92 Governor’s Budget stated that the mis-sion of the DFG is “to ensure that fish andwildlife are preserved to be used and enjoyedby the people in the state, now and in thefuture,” suggesting the DFG gives equal weightto protection and use activities. Given the com-petition among the department’s programs forscarce financial resources, however, some ofthese activities receive more funds and atten-tion than others, thereby taking implicit prior-ity over these other activities.Recently, the DFGwidely circulated to interested parties a newdraft mission “to ensure that California’s wild-life resources flourish in their natural habitats— first for their intrinsic and ecological values,and second, so that they can be enjoyed by the

“In actual practice, the dualmissions of the DFG can in manyinstances both be met through thesame programs . . . however, some

activities that promote oneobjective can conflict with and

undermine efforts to promote theother.”


82 83 84 85 86 87 88 89 90 91 92

30

60

90

$120

Primarily resourceuse programs

Primarily resourceprotection programs

Administration

Figure 8

Department of Fish and GameProgram Growtha

a Data are for fiscal years ending in years shown.

In our discussions withdepartmental staff and ourreview of the department’sprograms and protocols, wefound no evidence that theDFG formally makes ex-plicit choices between re-source use activities andpreservation activities.However, we did find thatthe department’s expendi-tures over time reflect anorientation towards re-source use activities by em-phasizing the consumptiveaspect of the DFG’s overallmission. Figure 8 illustratesthis, showing that con-sumptive (resource use) pro-grams grew steadily dur-ing the past decade,whereas environmental programs experiencedcomparatively less growth.

How Does the DFG Spend Its Money?

Figure 9 (next page)shows the relative level ofsupport expenditures in each different pro-gram within the department, including theadministrative costs that are distributed amongprograms. As the figure shows, the DFG spendsmore funds on inland (and anadromous) fish-ing programs than any other purpose, followedby wildlife protection or law enforcement ac-tivities. Third is the wildlife management pro-gram. These programs tend to emphasize con-sumptive uses of wildlife, although each divi-sion devotes some staff time toward habitat-oriented activities that are focused on generalhabitat needs of all species. For example, ouranalysis of the time allocations reported by theWildlife Protection Division staff (that is, war-dens) in 1989-90 indicates that only 9 percent ofthe wardens’ time was spent specifically onhabitat-focused activities including (1) responseto spills and other pollution-type occurrencesand (2) environmental review for streambedalteration agreements. In contrast, most of thewardens’ time was spent on sport patrol (37percent) and administration (16 percent). The

“The distribution of resourcesamong these programs suggests

that, in general, the DFG places ahigher priority on resource use

oriented programs. . .and a lowerpriority on general resource protec-

tion activities.”

remaining time was split among other patroland law enforcement activities, and training.

Obviously, a clean line cannot always bedrawn as to whether an activity is orientedtoward resource use or resource protection.Some of the staff time and activities devoted toresource use programs (certain of which dofocus on habitat) also further the objectives of


the protection-oriented programs. By the sametoken, the activities of the resource protectionprograms, which often focus on habitat, alsocontribute to furthering the objectives of theresource use programs. These inevitable “spill-over effects” make it difficult to cleanly dividethe various expenditures between resource useprograms and resource protection programs.Nevertheless, the distribution of resourcesamong these programs suggests that, in gen-eral, the DFG places a higher priority on re-source use oriented programs -- that is, thoseprograms related to its historical mission -- anda lower priority on general resource protectionactivities.

Conclusion

As discussed earlier, although the DFG em-phasizes resource use in its expenditure mix, itcontinues to struggle with the dual and some-times conflicting missions of resource use andresource protection, and experiences internalconflicts over these issues. Without an explicit

ordering of the department’s priorities, andclearly specified objectives that are consistentwith these priorities, there is inadequate basison which to evaluate how well the DFG isimplementing its programs to meet thedepartment’s objectives.

Primarily resource use

Primarily resource protection

Oil Spills

Administration

Wildlife Management

Inland Fisheries

Wildlife Protection

Marine Resources

EnvironmentalServices

Natural Heritage

a

Figure 9

Department of Fish and GameExpenditures in 1991-92

By Division

a Includes License and Revenue Branch (12 percent of total administrative costs).

“Until the department establishesclear priorities within its dual

mission, there will continue to beinternal conflicts within the

agency.”

Until the department establishes clear priori-ties within its dual mission, there will continueto be internal conflicts within the agency. Con-straints on overall funding levels and fundingflexibility, coupled with the competing expen-

diture priorities within theDFG, means that the an-nual fiscal problems con-fronting the Legislature re-garding this department(discussed below) willcontinue. Accordingly, werecommend that as a firstand most important step,the Legislature specify abasic direction that the DFGshould take regardingwhere to place the empha-sis in carrying out its dualmission. Among otherthings, the Legislature willneed to (1) make a determi-nation as to how each mis-sion benefits the populationof the state, (2) assess therelative values of these ben-efits, and (3) direct the DFGto implement a set of pro-grams that reflects theLegislature’s policy.


ORGANIZATIONAL PROBLEMSAND ISSUES

Current Organization of the DFG

The DFG currently is organized under a planwhereby the director is head of the departmentwith four assistants: a chief deputy director, achief deputy for oil spill administration, andtwo deputy directors. These officials oversee adepartment that includes five regions and sevendivisions, plus the Office of Oil Spill Preventionand Response.

The overall organizational configuration ofthe DFG, in place since 1953, is known as a “lineand staff model.” In its early years prior to1953, the department had been a centralizedline organization in which the equivalent ofdivision chiefs directed and supervised fieldactivities from department headquarters. In1953, the department decentralized to the “lineand staff model” in order to better respond tothe varying conditions around the state. Thecentralized system had hampered quick andappropriate responses to local situations andemergencies.

How Does the Organizational StructureActually Work?

Under the “line and staff model”, the re-gional managers supervise personnel in thefield, providing direction, and coordinating andadministering programs to implement thedirector’s policies. Although field staff are as-signed to various divisions, the regional man-agers have direct supervisory control over lowerlevel supervisors, who in turn control the activi-ties of individuals in the field. This regionalstructure is known as the “line” structure inthat program directives flow down a line ofcommand.

The “staff” structure aspect relates to thevarious divisions located at headquarters whoadvise the director on program and policy de-velopment. Division chiefs and division branchsupervisors also interact with the field staff

designated in each division to provide policyguidance and advice. Division supervisors donot, however, directly supervise field staff, asthese field staff report to regional managers.Organizationally, division chiefs have the samerank as regional managers.Over the years, asnew responsibilities have surfaced, the depart-ment has actually evolved to somewhat of ahybrid configuration of the line and staff model.Whereas in the past there was a clearly visibledistinction between the roles of the regionalmanager and the division chief, today, thosedistinctions appear less clear. Over time, forexample, the divisions’ headquarters staff havegrown, creating new sections and programs,often with no corresponding field staff.

Traditionally, the regional managers con-trolled the budgets for each region. In responseto legislative direction seeking greater fiscalcontrol and better management, the depart-ment has shifted budget control to the divisionchiefs. This will enable division chiefs to controlthe allocation of resources in the field amongregions and, implicitly, the priorities of thosestaff. Consequently, this may result in the depart-ment giving emphasis to priorities determinedon a statewide basis, rather than to local needs.

Finally, the department has designed the newoffice of Oil Spill Prevention and Responsealong the line model. Field staff will answerdirectly to new supervisors in the oil spill divi-sion, rather than incorporating new staff intothe regions under the direction of the regionalmanager.

“Over time, the divisions’headquarters staff have grown,

creating new sections andprograms, often with no

corresponding field staff.”


Communication Problems ExistWithin the DFG

We recommend that the department (1) con-duct a thorough internal analysis of its organi-zation, (2) revisit the organizationalrecommendations made in a 1958 externalconsultant’s report, and (3) implement organi-zational changes to increase the department’seffectiveness.

As we investigated the department’s effec-tiveness and the nature and causes of the prob-lems it currently faces, one of the most commoncomplaints we heard from staff about the DFGis the lack of communication (1) among re-gions, (2) among divisions, and (3) betweenSacramento and the field. These communica-tion problems tend to contribute to and exacer-bate departmental coordination problems andundermine the ability of the DFG to respondconsistently and effectively to legislative priori-ties. For example, it can mean that the intent ofa policy directive from Sacramento will notalways translate into an appropriate action atthe field level.

This communication problem does not ap-pear to be an inherent problem with the lineand staff model, given that the Department ofParks and Recreation and the California De-partment of Forestry and Fire Protection bothuse this model and appear to effectively com-municate policies from headquarters down tothe field level, and receive communication backfrom the other direction. It is quite possible thatthe evolution of the DFG away from a pure lineand staff model to a more hybrid form hascontributed to this communication problem.On the other hand, this communication break-down could also stem from the bifurcated mis-sion of the department and the different priori-ties of various staff.

The Problem is Not New

The DFG’s organizational structure has un-dergone close scrutiny before, largely due tomany of the same problems and complaints

that prevail today. Most notably, in 1958 theLegislature authorized $500,000 (1991 dollars)for an extensive review of the DFG which wasprepared by the management consulting firmof Booz, Allen and Hamilton. The resultingreport, based on the work of five nationallyrecognized specialists in fish, game and wildliferesources management, contained an exten-sive review of the department’s programs, bothfrom an analytic/scientific perspective, andfrom an organizational point of view.

At the time of this study, the consultantsobserved a lack of teamwork and communi-cation among DFG staff. In the consultants’view, the functional separation of the fieldpersonnel into wardens, game managers andfisheries managers tended to contribute to andperpetuate this problem of disunity. As a solu-tion, the report recommended that the depart-ment maintain the “line-staff” model, but fur-ther decentralize field operations down to adistrict level, beneath the regions. They alsorecommended that field staff assigned to adistrict manager should be generalists. The con-sultants envisioned the creation of a “conser-vation officer”; that is, an individual that wasboth a warden and a biologist who wouldengage in a broad range of activities. Currently,some other states apply such an approach.Both Missouri and Colorado staff field posi-tions with individuals that have both a four-year degree in biological sciences and full peaceofficer training. This broad training enablesstaff to respond to a range of diverse andcomplex problems that arise in the field.

“Communication problems tend tocontribute to and exacerbatedepartmental coordination

problems and undermine the abilityof the DFG to respond consistently

and effectively to legislativepriorities.”


Although the DFG adopted many of thereport’s recommendations relating to the man-agement of fish and wildlife, it did not adoptthe recommendations that related to the orga-nizational structure. Given that many of theproblems that currently face the DFG matchthose identified in 1958, we recommend thatthe DFG conduct a thorough internal analysisof its organizational structure using this previ-ous study as a guide, and implement changesto its structure aimed at solving communi-cation difficulties and enhancing overall pro-gram effectiveness.

FISCAL PROBLEMS AND ISSUES

This department has repeatedly been the sub-ject of legislative concern and attention foryears because of the perception that there is aDFG fiscal crisis. Our analysis of thedepartment’s revenues and expenditure pat-terns suggests that the DFG faces both short-run and long-run fiscal challenges. In the short-run context, inattention to developing accuraterevenue estimating tech-niques has resulted in fre-quent revenue shortfalls at-tributable to faulty revenueestimates. There are strate-gies available to address thisproblem, as discussed be-low. In the long-run con-text, however, the depart-ment faces fundamental,more difficult-to-solve fiscaltroubles similar to manyother state agencies. Theseprimarily include a grow-ing gap between programdemands and available re-sources. Compounding thisproblem, there are fundingrestrictions which limit theability to allocate specialfund resources effectively.In the next section we out-line both the short-run andthe long-run fiscal issues and

problems facing the DFG, and suggest possiblesolutions to each.

Short Run Fiscal Problems

The problem of estimating licenserevenues

Over the past decade, the department’s per-formance has been mixed in estimating therevenues that it will receive from state huntingand fishing license sales and which it will depositin the Fish and Game Preservation Fund (FGPF).Figure 10 shows the difference between actualand estimated FGPF revenues. As the figureshows, the department’s estimated revenueswere less than what actually materialized moreoften than not through the mid-1980s. How-ever, even though license estimating was anexercise the department was experienced inundertaking each year as part of its baselinebudget development, the ability of the depart-ment to predict revenues accurately began todeteriorate in recent years, with increasinglylarge revenue overestimates becoming the rule.

a Data are for fiscal years ending in years shown.

Figure 10

Fish and Game Preservation FundDifference Between Actual and Estimated License Revenuesa


Steps taken to eliminate revenueoverestimates

Recognizing the need to break out of therecent cycle of revenue overestimates, the de-partment revised down its January 1990 bud-get revenue projection by $11.2 million in Spring1990, reflecting a change in estimating method-ology. This new methodology reversed the tra-ditional assumption of the department thatlicense sales would rebound the next year fol-lowing a decline, and instead, projected a down-ward trend for future years, based on pastexperience. To date, the monthly estimates ap-pear to correspond closely to actual monthlyreceipts, suggesting the department has founda better way to predict future revenue flows. Infact, none of the fiscal problems which facedthe Legislature regarding this department’s1991-92 budget stemmed from inaccurate esti-mates for hunting and fishing revenues, as hadbeen the case for the last few years. Rather,these problems stemmed from the department’sinaccurate estimates of revenue which wouldaccrue from new fees and programs, as dis-cussed below. In effect, the department ap-pears to have solved it’s short run FGPF licenserevenue base problem by learning how to moreaccurately estimate these revenues. However,as the Legislature seeks to find new ways offinancing the department’s activities, the baseestimates problem has been replaced with anequally serious problem of accurately estimat-ing revenues from new sources.

The problem of estimating revenues fornew programs and sources

We recommend that the Legislature estab-lish a policy of (1) considering the level ofuncertainty in the department’s revenue esti-mates when appropriating funds from new rev-enue sources and (2) providing initial reservelevels for these revenues that are consistentwith the level of uncertainty in the estimate.

During the 1980s to the present, the DFG alsooverestimated the potential revenues from (1)the new California Wildlands program,Ch 1539/88 ( AB 3873, Costa), (2) new environ-

Thus, not surprisingly, by fiscal year 1989-90the DFG ran a substantial deficit. The Legisla-ture rectified this problem by passing legisla-tion that loaned (1) $3.6 million from theEnvironmental License Plate Fund (ELPF) and(2) $3.3 million from the Off Highway VehicleAccount (OHV). (At the time this programreview was written, legislation was pendingthat would forgive the ELPF loan and extendthe OHV repayment deadline by two years --AB 1941, Kelly).

It should be noted that the data shown inFigure 10 mask some of the revenue estimatingproblems that have occurred. In particular,fiscal year 1985-86 is an example of this. Dur-ing the 1985-86 budget review process, ouroffice identified a $7.1 million gap betweenplanned expenditures and anticipated revenuesfor that budget year. In response to this short-fall, the Legislature (1) provided a $2 millionGeneral Fund Loan, (2) passed legislation thatappropriated $1.2 million from the GeneralFund to the nondedicated portion of the FGPF,and (3) raised a variety of license and tag feesfor hunting and sportfishing including increas-ing the fishing license from $13.75 to $18.00.These actions by the Legislature served to aug-ment the FGPF substantially, thereby exceed-ing the DFG’s revenue expectations for 1985-86.

The department appears to havesolved a portion of its short-run

problem by learning how to moreaccurately estimate its base

revenues, but has replaced thisproblem with one of estimating

revenue from new sources.


estimating revenues from new fees prior tohaving any revenue history, we recommendthat the Legislature consider the level of uncer-tainty in the initial estimates of new revenuesources when appropriating funds from thesesources. We further recommend that the Legis-lature adhere to a policy of establishing conser-vative reserve levels commensurate with thedegree of uncertainty in the revenue estimates.This policy would (1) eliminate the annualproblems of mid-year budget adjustmentsthrough the deficiency process and (2) gener-ally reflect a continuation of the approach takenby the fiscal committees with respect to thedepartment’s 1991-92 budget.

Long Run Fiscal Issues

Merely estimating and budgeting accuratelywill not solve the basic underlying fiscal prob-lems the department faces in the long run,largely because the DFG is being confrontedwith problems of habitat management causedby increasing population pressures virtually inevery area of the state. The cumulative effect ofhuman activities such as land conversion foragricultural and urban uses, water diversions,livestock grazing, and resource extraction (suchas logging and mining) have led to substantialhabitat losses. The most dramatic is the loss of94 percent of the state’s original wetland habi-tat, primarily from water diversions and drain-age for agricultural uses. Habitat losses havetranslated into an ever-lengthening list of rare,threatened or endangered species. In 1971, theFish and Game Commission first declared 43species of animals as threatened and endan-gered. Twenty years later, the department re-ports that the list has increased to 72 species ofanimals and 140 plants. Of these listed species,70 percent continue to decline, signaling fur-ther degradation of California ecosystems. Inaddition, the department has identified an ad-ditional 58 animals and 600 plants that pres-ently meet the criteria for listing, but have notbeen reviewed and listed formally by the com-mission.

mental review fees imposed by Ch 1706/90(AB 3158, Costa), and (3) increased commer-cial fishing fees authorized by Ch 1703/90(AB 2126, Felando). In all of these cases, thedepartment had to estimate revenuesprospectively, working without a past historyof revenue performance. In each case, the de-partment substantially overestimated revenues.For example, the DFG projected that the Cali-fornia Wildlands program would generate upto $5 million annually. In fact it generates lessthan $200,000 per year. Likewise, the DFGestimated that AB 3158 fees would generate$10 million annually, and later had to reducethat amount to $4.3 million. Finally, the depart-ment overestimated AB 2126 revenues by $2.3million.

Why are accurate revenue estimates impor-tant? Understanding the implications of over-estimating revenues requires an understandingof the DFG budgeting process. First, the DFGestimates revenues for the forthcoming year.Based on such estimates, and perceived pro-gram needs, the DFG then prepares a budget.If funds are increasing, and the DFG can iden-tify appropriate ways to spend those funds, theDFG will submit budget change proposals thatwill expand existing programs or create newprograms. Program expansions can result innew staff and other support services and/orincreased administrative workload, and henceexpands the base level of expenditures. Oncethe DFG develops its program expenditure plan,the Legislature reviews the plan, approvingprograms that are consistent with legislativepriorities.

If the DFG misses the target and overestimatesrevenues, and it budgets those funds that sub-sequently do not materialize, then the DFGmust (1) draw down fund reserves, (2) freezeexpenditures and take emergency cost savingmeasures, and/or (3) file for a deficiency ap-propriation. Clearly, none of these outcomes isdesirable.

Given the budgetary impacts of revenue over-estimates, the DFG’s poor revenue-estimatingtrack record, and the very difficult task of


Funding is not keeping pace withprogram pressures

These and other statistics suggest that theDFG’s financial base is not keeping up with thedemands being imposed on it. For example,rather than actually reversing the problem ofspecies loss, the department has largely beeninvolved in documenting the demise of hun-dreds of plant and animal species. With a fewnotable exceptions of potential recovery (suchas the bald eagle, the peregrine falcon and theCalifornia condor), most threatened and en-dangered plant and animal species live in small,fragmented populations with no guarantee thatthey will survive.

Another area where staffing and resourceshave failed to keep pace with workload is thedepartment’s implementation of CEQA. TheCEQA requires the DFG to review and com-ment on environmental documents (such asenvironmental impact reports) which are re-quired of any state or local project that mighthave a significant potential impact on the envi-ronment (including “cumulative impacts” --the impacts over time of additional projects).The CEQA, when implemented as intended,allows the DFG the opportunity to review aproject, identify negative impacts on fish andwildlife, and recommend mitigation measures.Staff levels in the department have not, how-ever, kept pace with the rate of economic andurban development in the state. Some strikingstatistics for the period 1980 to 1990 whichindicate this problem include:

• State population increased by 26 percent.

• Residential and nonresidential constructionunits increased by 83 percent.

• The number of projects reviewed by theDFG increased by 78 percent.

• The number of staff the DFG allocated toproject review increased by only about 8percent.

In fact, our review of the department’s staffindicates that the department has not increasedthe number of biologists in the field in theinland fisheries division or the wildlife manage-

ment division for over 20 years. Further, notonly has the department not changed the num-ber of staff, it also has not changed the distribu-tion of staff among regions, even though someareas of the state have experienced greaterdevelopment pressures than other areas of thestate. These staff conduct much of the biologi-cal review that leads to the department’s as-sessment of the impact of a project, as well ascollecting baseline data that leads to the estab-lishment of hunting and fishing regulations.These are but two illustrations of how the

increasing human population and the activitiesof humans have served to increase the workloadof department staff. Other examples includeincreasing poaching problems, increases in gen-eral law enforcement violations, and an in-crease in the number of pollution spills.

Options for the Legislature for addressinglong run fiscal problems

The ongoing and expanding environmentalproblems resulting from California’s continuedhuman population growth pose a significantchallenge to the department. When coupledwith the decline in the department’s traditionalfunding base, these problems become even moresevere. In our view, matching a reasonablefunding base with the state’s habitat preserva-tion and enhancement objectives is the underly-ing challenge facing the DFG in the decade ofthe 1990s.

In the long run, the DFG's financialbase is not keeping up with the

demands being imposed on it dueto problems of habitat management

caused by increasing populationpressures.


Figure 11

Options for Resolving the DFG'sLong Run Fiscal Problems

✔ Reduce the DFG's workload to fitexisting declining revenue base.

✔ Enhance the DFG's financialresource base such as through

increasing broad-based funding

and/or user fees.

✔ Improve the DFG's prioritysetting, so as to use existing

resources most effectively.

other things:

• Reducing hunting activities. This might in-clude cutting back on the amount of timestaff spends collecting data for the purposeof setting bag limits and establishing hunt-ing seasons. It also might mean reducingthe level of time spent on managing hunts invarious parts of the state. Such measurescould result in a closure of some hunts dueto the inability of the DFG to collect ad-equate data to justify hunts pursuant toCEQA requirements. If that took place, itcould have a negative revenue impact.

• Reducing recreational fishing activities. Thiscould include warm water “put and take”activities (planting fish to be caught ratherthan to reproduce and expand the fishpopulation) including hatcheries, as well asreservoir management activities. The Legis-lature could consider reducing the scale ofthese activities. If the Legislature chooses todo this, however, it could also have theeffect of reducing fishing license revenues,to the extent that people purchase licensesin order to fish in “put and take” areas. TheDFG has asserted on a number of occasionsthat hatcheries ultimately “sell” licenses. Thedepartment has not, however, ever conducteda study to confirm that assertion. Conse-quently, we are unable to determine whateffect pursuing this option would have onrevenues, and thus what its net impact on theDFG’s fiscal situation would be.

• Reducing commercial fishing regulatory ac-tivities. This could entail spending fewer

“ In our view, matching areasonable funding base with thestate’s habitat preservation and

enhancement objectives is theunderlying challenge facing the

DFG in the decade of the 1990s.”

The Legislature has three broad options fromwhich to choose in making sure that a long runbalance is achieved between the DFG’s fiscalresources and the demands placed on them.Specifically, as summarized in Figure 11, theseare: (1) reducing the workload placed on thedepartment so as to enable it to live within itsexisting revenue base, (2) enhancing the exist-ing revenue base, and (3) improving the alloca-tion of available resources through better prior-ity setting. Of course, these approaches are notmutually exclusive.

1. Reduction of existing and/orfuture workload

As the number of individuals who hunt and/or fish declines, the Legislature could direct theDFG to reduce its support services for theseactivities in order to help keep spending andresources in balance. Much of the existing activi-ties of certain divisions -- most notably theinland fisheries division -- relate to recreationalinterests. Such a downscaling of support ser-vices for existing activities could include, among


hours on inspections and audits, as well asless effort tracking the condition of fisher-ies. While this would reduce DFG expendi-tures, it also might result in overfishing ofthe resource which, in the long run, couldreduce incomes to fishermen. This also couldeventually result in a decline in revenues tothe department.

In all of the above cases, reducing DFG pro-gram activity levels, while reducing expendi-tures, also could potentially exacerbate the fis-cal situation the department faces by hurtingrevenues. What is not clear, however, is to whatextent such moves would accelerate the rev-enue declines already taking place. As a result,it is unclear whether such revenue losses wouldactually exceed the savings incurred from thereduction in workload, and thus what the netimpact on the DFG’s fiscal situation would be.

In addition to reducing existing workload,the Legislature could consider reducing antici-pated future workload associated with landacquisitions. Currently, the DFG has accumu-lated approximately 522,000 acres of habitatfor wildlife management areas and ecologicalreserves. Over the past five years, the WildlifeConservation Board (WCB) has spent approxi-mately $145 million and plans to spend anadditional $47 million in 1991-92 on habitatacquisitions. These expenditures translate intoextensive acreage; over the past five years, theWCB has purchased over 84,000 acres andplans to add on 24,000 acres in 1991-92. Oncepurchased, the DFG takes over the operationsand maintenance of the property. In manycases, simply leaving the land alone cannotsuffice, as the habitat has already been dis-turbed. Wetland properties often require inten-sive management to ensure that water is di-verted onto the land at the proper time. For1991-92, the DFG has budgeted $5.2 million forhabitat management, a level which the depart-ment believes is insufficient for adequate pro-tection of state lands. If the Legislature re-stricted these acquisitions, this would reducethe DFG’s future ongoing operations and main-tenance expenditure needs.

2. Expanding the DFG’sfinancial resource base

As an alternative to program reductions, or inconjunction with them, the Legislature couldconsider increasing the level of funds availableto this department. In this section, we identifyand discuss a number of the different fundingsource options. These include, among others,broad-based General Fund support, the use ofgeneral environmental funds, and the use ofspecific user or so-called “impact” fees.

The option of using a broad-based funding approach

In thinking about how to go about providingfor increased DFG funding, if that is an avenuethe Legislature is interested in pursuing, it isuseful to first consider who the direct andindirect beneficiaries of the department’s ac-tivities are. Generally speaking, we believe theDFG should continue to rely primarily on spe-cial funds for its funding, given that so many ofits activities directly benefit those who do or canbe required to pay user fees. However, it also isimportant to consider the extent to which theDFG’s activities are what economists refer to as“public goods.” The term “public good” refersto a good or service that benefits the entirepopulation, whether or not they paid directlyfor it. For example, national defense is consid-ered a public good, as is a substantial portion ofthe benefits accruing from K-12 public educa-tion. Even if only certain individuals were taxedfor national defense, or to support schools, theentire population would benefit from protec-tion of the armed forces, or from having aneducated citizenry. Economists typically arguethat, for this reason, a strong case can be madeto fund such goods using broad-based generaltax dollars, as is generally done.

Within the DFG, the protection of fish andwildlife habitat (as opposed to species-specificactivities related to recreational or commercialactivities) would seem to fall under the cat-egory of “public good” because the public ben-efits from maintaining the natural diversityand ecological health of the state. An unhealthy


“There are some activities related tonative fish and wildlifepreservation that could

appropriately be funded from theGeneral Fund, or from general

environmental funds . . . Anotherapproach the Legislature couldconsider is to increase or extend

user or “impact” fees.”

❑ Mining fees

❑ Nonpoint discharge fees

❑ Water use fees

❑ Wastewater discharge fees

❑ Highway-related fees

❑ Recreational fees and/or taxes

❑ Population impact fees

Figure 12

Illustrative Examples ofPossible Impact Fees

who use or degrade a resource to pay all or aportion of the social costs imposed by their use.Chapter 1706, Statutes of 1990 (AB 3158, Costa)requires developers to pay a resource impactfee to reflect a portion of the costs to the rest ofsociety from destruction or alteration of naturalhabitat, and deposits these fees in the FGPF.Rather than setting the fee at a level to reim-burse the department for the costs it incurred inreviewing a specific project under CEQA, thebill set fees generally to pay for a variety ofhabitat restoration activities in which the depart-ment engages. The fee thus acts as a “proxy” forthe cost of using the resource -- in this case, thetaking of habitat for development.

The Legislature could consider a number ofspecific impact and/or user fees to increase thefunding base of the DFG. As summarized inFigure 12, illustrative examples of possible feesinclude:

• Mining fees. Current mining operations inthe state, particularly for gravel and openpit mining, can have a significant impact onthe state’s fish and wildlife. Gravel miningfrom streambeds can degrade spawning

ecosystem inevitably results in an unhealthyenvironment for humans. As such, there aresome activities related to native fish and wild-life preservation that could appropriately befunded from the General Fund, or from generalenvironmental funds such as the ELPF or thePRA. Such activities might include (1) theprotection and enhancement of rare, threat-ened and endangered species, as the benefits ofsuch programs accrue to the general public aswell as future generations, or (2) general habi-tat protection or restoration activities, espe-cially where the orientation of the habitat pro-gram is on an ecosystem basis rather than aspecies-specific basis as has been the commonpast practice. Of course, any determination bythe Legislature to use some form of broad-basedfunding, such as the General Fund or generalenvironmental funds, to support these activi-ties should be based on the extent to whichthese activities are consistent with theLegislature’s overall priorities for spendingGeneral Fund and environmental fund re-sources.

The option of user or “impact” fees

Another approach the Legislature could con-sider is to increase or extend user or “impact”fees, sometimes referred to as “polluter pays”fees, beyond the groups currently paying thesefees. Impact fees require individuals or firms


costs of reviewing and mitigating the im-pact of timber harvest operations.) To insti-tute a charge for the pollution effects, theLegislature could consider a variety of spe-cific fees. These could include:

• Levying a surcharge on the annual licens-ing and certification fee currently imposedon individuals that apply pesticides, suchas pesticide dealers, pesticide applicators,and crop duster pilots. The surcharge rev-enues, collected by the California De-partment of Food and Agriculture(CDFA), would then be transferred tothe DFG.

• Taxing fertilizers at their point of sale.

• Increasing the cost of stormwater dischargepermits. The federal Clean Water Actalready requires stormwater dischargepermits for most urbanized areas. InCalifornia, municipalities will be requiredto a pay a fee for these permits. This feecould be increased by the Legislature toinclude a charge for the environmentalcosts of the discharges. The state levywould then be passed on to the DFG.

• Water use fees. The use of water fromrivers, streams, and the Delta for agricul-tural, industrial, and municipal purposeshas greatly reduced fish populations as wellas waterfowl populations. The loss ofaquatic, riparian and wetland habitat con-tinues to place strain on these populationsand threatens some species with possibleextinction.

To mitigate these impacts, the Legislaturecould, for example, impose a fee on eachacre foot of water used. Such a volume-based fee would charge more to those thatuse more water (and thereby presumablycontribute most to the reduction of fish andwaterfowl populations). At the current lev-els of water use in the state, a one cent peracre-foot charge would generate approxi-mately $220,000 annually. This fee could becollected by the State Water Resources Con-trol Board and then be remitted to the DFG

areas for fish, and open pit mining caneliminate acres of habitat and interruptmigration patterns for a wide variety ofterrestrial species.

Until recently, the state did not know thenumber and location of all mining opera-tions in the state. However, Ch 1097/90(AB 3551, Sher) requires that each miningoperation provide to the state by July 1,1991 detailed information on its activities.Mining operations must submit this infor-mation to local lead agencies (counties) forreview as well as to the state Mining andGeology Board. This will enable the coun-ties and the state to develop a data base ofmining operations, as well as ensure thatthe mining operator has a plan to reclaimthe mine once it shuts down.

Using this data base, counties could chargean annual fee based on the volume of min-erals removed to reflect the annual ongoingimpact of mining operations on the naturalhabitat. After deducting all administrativecosts of levying the fee, the balance could bedeposited in the FGPF. The DFG wouldhave to monitor the program, just as it doesAB 3158.

• Nonpoint discharge fees. Nonpoint dis-charges -- pollution that does not pour froma single point, but rather originates from avariety of sources difficult to identify --negatively affect wetlands and other aquatichabitat areas, particularly estuaries andbays. Major sources of nonpoint dischargesinclude (1) agricultural runoff contaminatedwith pesticides and fertilizers, (2) urbanstormwater runoff, and (3) runoff fromforestry activities (specifically, erosion fromtimber harvesting and road building).

Because nonpoint pollution originates fromsuch a large number of sources, levying afee on each polluter could be administra-tively difficult. Currently, nonpoint dis-chargers pay no fee to mitigate the impactof the pollution on habitat. (An exception tothis is the fee charged timber harvest opera-tors pursuant to AB 3158 to offset the DFG’s


This list included grants to some state agen-cies including the Department of Parks andRecreation, Caltrans and the DFG. The DFGcould continue to apply for these funds in future years.

Second, the Legislature could consider levy-ing a surtax on gasoline and diesel fuel toreflect the ongoing, annual impact of roadson wildlife and habitat. The California Con-stitution allows the use of gasoline taxes forenvironmental mitigation related to the im-pact of road construction and operations.The DFG would have to show how specificmitigation work related to a specific high-way or road. At current levels of usage, aone cent per gallon tax would generateapproximately $150 million annually.

• Recreational fees and/or taxes. Currently,only hunting and fishing recreational userspay annual fees for a license. The Legisla-ture could consider charging annual usefees or taxes for a number of other recre-ational activities such as hiking,birdwatching, white water rafting, boat-ing, and skiing. These users, although notconsuming the resource in the same senseas do hunters and fishers, can and do havean impact on the habitat. When hikers andcampers make use of sensitive areas in largenumbers, for example, such as at some ofthe popular parks, they can seriously dis-turb habitats and animal species. Likewise,sports such as downhill skiing cause de-struction of forests and increase erosion.

Because these user groups represent a largeand diverse number of individuals, the pro-cess of charging and enforcing individualfees could prove administratively infeasible.Consequently, an alternative way of apply-ing the user fee concept could be a specialsales tax on the equipment used for theseactivities, such as camping and ski equip-ment.

• Population impact fees. At the root of thedepartment’s long term challenge to pre-serve and protect the state’s wildlife re-

for use in mitigating the impact of water useon fish and wildlife.

• Wastewater discharge fees. The state cur-rently charges permit fees to dischargers ofwastewater in order to pay for a portion ofthe State Water Resources Control Board’swater quality regulatory program. Thesefees could be increased to reflect the impactof wastewater discharges on wildlife spe-cies and habitat. The additional revenuescould then be transferred to the DFG for usein preserving habitat and mitigating theeffects of pollution on native species.

• Highway-based fees. Roadkills account fora substantial death toll of many mammals,particularly deer. In addition, multi-lanehighways fragment habitats, limiting themovement of various species. Over time,the fragmentation of habitat causes (1) theloss of area-sensitive species, (2) the loss ofmigratory species, (3) the domination ofnon-native species, and (4) extensiveinbreeding which leads to low levels offertility, low rates of successful reproduc-tion, low weight of offspring, and highrates of infant mortality.

Chapter 106, Statutes of 1989 (AB 471,Katz) states legislative intent to allocate $10million of increased gas tax revenues annu-ally for 10 years, beginning July 1, 1991, tothe Environmental Enhancement andMitigation Demonstration Program Fund.Current law directs the Resources Agencyto evaluate grant proposals for using thesefunds and submit a list of recommendationsregarding them to the California Transpor-tation Commission (CTC). The Commis-sion then reviews and makes decisions aboutfunding the list. These funds are to be usedfor mitigation of the direct and indirectenvironmental impacts of modifying exist-ing transportation facilities or for the de-sign, construction or expansion of new trans-portation facilities. To date, the ResourcesAgency has developed its decisionmakingcriteria, and submitted the first list to CTC.


department and/or the level and mix of itsfunding, the Legislature should take action toensure that the DFG does the best possible job ofsetting priorities. Our review indicates thatimprovements are needed in this area. In orderto improve its priority-setting and efficiency ofresource use, the department requires (1) betterplanning and (2) more flexibility in the use offunds to enable the department to fund thehighest priorities identified in the planningprocess.

Better Planning

We recommend the Legislature direct theDFG and the Resources Agency to focus thedepartment’s planning efforts, so as to developa strategic and operational planning process toguide department operations.

Our review of agencies like the DFG in otherstates found that the Florida Game and FreshWater Fish Commission (GFWFC) has a plan-ning process in place that works very effec-tively in establishing priorities and providingdirection for the commission. The Florida Leg-islature was so impressed with this system thatthey required other agencies in their state toimplement a similar system.

How the Florida planning process works

As summarized in Figure 13, the Florida sys-tem consists of four components or phases: aninventory of needs and problems, a strategicplan, operational plans, and an evaluationphase.

Inventory. The inventory is designed to an-swer the question: “Where are we and whatproblems do we face?” The GFWFC compilesdata on fish and wildlife populations and theiruse to set objectives in the strategic planningphase and to evaluate past operations. This firststage is necessary to assess where problems liethat must be addressed, as well as providing afoundation to measure progress later.

Strategic plan. The strategic plan must an-swer the question: “Where do we want to go?”

sources is the inherent conflict between thecoexistence of a large human populationand other species. Consequently, a broad-based fee — coupled with appropriate ex-emptions for economically disadvantagedgroups if desired by the Legislature — couldprovide the department with a fundingbase that would grow as population pres-sure increased. There are a variety of meansfor implementing such a “population-im-pact fee” concept, including (1) a flat-ratesurcharge on annual state income tax li-abilities, (2) a surcharge on auto registra-tions, or(3) an increase in the sales tax on auto saleswhich would be used for this purpose. Forinstance, Florida currently charges a $4 feefor every new car registered in the state toact as a proxy for the additional resourcepressure that will be imposed by that newindividual and that automobile.

3. Improve priority setting in usingfinancial resources

The third basic option for addressing thelong-term fiscal problems faced by the DFG is toimprove the efficiency with which it expendsits resources, so that it can get “more bang forthe buck” or “the same bang for less bucks.” Infact, regardless of whether or not the Legisla-ture chooses to alter the workload levels of the

“Regardless of whether or not theLegislature chooses to alter the

workload levels of the departmentand/or the level and mix of itsfunding, the Legislature should

take action to ensure that the DFGdoes the best possible job of setting

priorities.”


Figure 13

Florida Game and Fresh Water Fish Commission'sAnnual Four-Phase Planning Process toEstablish Program and Budget Priorities

Phase III

Phase II

Inventory

Strategic plan

Operational plans

Evaluation

What problemsdo we face?

Where do wewant to go?

How will we get there?

How did we do?

Phase I

Phase IV

Question PurposeActivity

This overall plan, which includes a missionstatement for the commission, formulates thegoals, objectives and strategies that identifywhere the commission wants to be in the nextfive years. The GFWFC updates the strategicplan each year, and then fully re-evaluates theplan every three years.

Operational plans. The next stage involvesthe development of operational plans. Theseplans answer the question: “How will we getthere?” Operational plans give life and mean-ing to the strategic plan and state specificallywhat the GFWFC will do in a given budgetyear. Operational plans are annual documentscomposed of division-level project documentsand the legislative budget request for fundingthe operational plan.

The GFWFC uses this system as an integralpart of its annual budget request process. Staffmust rank projects based upon the priority ofthe programs, and the problems that proposedprojects would address. Thus, by internallyranking programs based on the severity of theproblem that a program addresses, the GFWFC

staff can rank specific projects based on wherethese projects fall programmatically. TheGFWFC’s Executive Director uses this rankingin approving projects for submission to theLegislature for funding.

Evaluation. The GFWFC closes the loop of itsplanning process with annual evaluations. Theevaluation answers the question: “Did we suc-ceed?” Evaluations enable the GFWFC to de-termine how efficiently and effectively the de-partment met its objectives. The results of theevaluation phase form the basis for revisions tostrategic and operational plans.

To facilitate the evaluation process, theGFWFC documents the costs and benefits ofeach project and program in terms of progresstoward strategic plan objectives. Florida cap-tures project costs using a program cost account-ing system. The GFWFC also tries to documentbenefits achieved by its activities, although thisis more difficult to document than are costs,due to the subjectivity of measurements. Staffdo try to quantify benefits to the extent possible,however.

Problem assessment

Goal, objective, andstrategy definition

Program and activityplans

Efficiency and effective-ness measurement


document from the staff of the department,and use this information to develop a revisedconsensus document before it proceeds further.

Creating the strategic plan is only the firststep facing the DFG. The department musteventually translate this strategic plan into aworking system that provides the necessaryinformation, direction and communicationchannels to coordinate its actual implementa-tion. To this end, we recommend the Legisla-ture direct the DFG and the Resources Agencyto continue the department’s planning processand to focus the planning efforts on the devel-opment of a strategic and operational planningprocess to guide the department in setting pri-orities and making operational decisions. With-out such a system, the department will not havethe accountability or the credibility it needs toeffectively proceed into the future.

Achieving Needed Funding Flexibility toMeet State Priorities

We recommend continuation of support fordepartmental operations primarily from statespecial funds and the elimination of the consti-tutional and statutory restrictions which cur-rently dedicate DFG revenues for limited pur-poses within the department.

As noted earlier and discussed further below,continued support of the DFG primarily fromspecial funds makes sense to us, although a casecan be made for funding a portion of the DFG's activities from broad-based revenues. Greaterflexibility is needed, however, in the exact waythese special fund monies can be used.

An important characteristic of any effectiveplanning process is flexibility to adapt to chang-ing circumstances in order to reflect changingpriorities. Since one critical factor necessary forimplementation is funding, the need for flex-ibility extends to the funding area. Plans shouldidentify programs in a particular priority, andthen funding levels should dictate how fardown the list of programs an agency may go inits implementation activities. Although fund-ing needs generally outpace funding availabili-ty, thus restricting the level of implementation,

Benefits from Planning. Florida has foundthat this planning system offers a number ofimportant benefits beyond increased efficiencyand better use of scarce resources. The GFWFChas found, relative to the agency’s effectivenessprior to implementing a planning process, thatthey have improved coordination among divi-sions and offices, and have better communica-tion within the agency. They now can provideclearer direction for their programs. The Com-mission also finds that it can communicate itsmission with the public and with other govern-mental bodies better and therefore improves itsaccountability.

DFG efforts to date

Currently, the DFG has no analogous plan-ning system to Florida’s on a departmentwidebasis to ensure that priorities are properly es-tablished and efficiently addressed. Some divi-sions or branches within divisions of the DFGdo require planning, but the planning efforts donot create a coordinated management infor-mation system that provides information thatcan be evaluated for future budget requests.

Recently, the DFG began a planning processthat may eventually provide a system similar toFlorida’s, if the DFG completes the process. Todate, a steering committee of various individu-als within the department have developed thebeginnings of a strategic plan entitled “TheDepartment of Fish and Game -- the 1990’s andBeyond.” The department steering committeewill be receiving feedback about this planning

Currently, the DFG has noplanning system on a

departmentwide basis to ensurethat priorities are properlyestablished and efficiently

addressed.


ideally the amount of funds should not affectthe order of implementation. Unfortunately,over the years, restrictions on the use of fundsavailable to the DFG has resulted in severelyconstraining the flexibility of the DFG and itsability to meet legislative priorities. Such a situa-tion can greatly undermine planning efforts, nomatter how good their potential.

Florida’s GFWFC enjoys far more flexibility inthe uses of its funds than does the DFG. TheGFWFC has no constitutional restrictions, norany statutory restrictions on the use of the bulkof its funds. Although the Commission mustallocate certain of its funds in specific ways(such as the $4 car registration fee exclusivelyfor nongame programs, pursuant to the en-abling legislation for that fee), the Commissionmay allocate most of its funds for a variety ofprograms. This flexibility allows the Commis-sion to first plan priorities and then fund pro-grams in order of priority to the maximumextent that total availability of funds allows.

California’s funding restrictions obstructeffective policy implementation

In contrast, in California a labyrinth of fund-ing source restrictions obstruct such a process.Even if the DFG identified program prioritiesthrough a planning process, the DFG wouldhave to re-order certain of them according tofund restrictions. A thorough planning processwith legislative oversight that translates intoaction in the field would greatly improve theaccountability and effectiveness of the depart-ment. Yet, unless the plans were implementedin the order identified through the planningprocess, that accountability and effectivenesswould be diminished--perhaps significantly.Specifically, funding restrictions inevitably al-ter priorities and cause reversals or modifica-tions of policy direction.

Enhancing ability to fund priorities

Because hunters, fishers, and other recre-ational outdoor enthusiasts benefit more di-rectly from most of the department’s programsthan does the general public, a significant por-

tion of the department’s funding has beenthrough “user charges” that seek to link theamount of support provided with the amountof benefits derived. In our view, this linkage ofgreater direct benefits with greater share of thecost through special funds — most signifi-cantly the FGPF — continues to make sense,and thus should be continued. However, solong as the current narrow constraints remainon the uses of the FGPF, the department and theLegislature will be unable to ensure that pro-grams that provide the greatest benefits to fish,wildlife, and habitat are those that are fundedfirst.

Accordingly, in order to enhance both theplanning potential of the department and itsability to ensure that the highest priorities arethose that are funded, we recommend that thedepartment continue to be funded primarilyfrom special funds, but that the constitutionaland statutory funding restrictions currentlyplaced on the use of the DFG’s special funds beeliminated so as to ensure that the departmentand the Legislature have the greatest flexibilitypossible in meeting program priorities withinthe broad parameters of wildlife preservationand enhancement.The recommended steps in-clude (1) repealing the constitutional provi-sions restricting the use of the the bulk of theFGPF solely to programs of benefit to huntingand fishing, (2) repealing Section 711 of the Fishand Game Code, (3) abolishing dedicated ac-counts, and (4) continuing the current practice

“So long as the current narrowconstraints remain on the uses ofthe FGPF, the department and the

Legislature will be unable to ensurethat programs that provide the

greatest benefits to fish, wildlife,and habitat are those that are

funded first.”


of depositing license and related revenues inthe FGPF. Adoption of this recommendationwould not change the special fund status of theFGPF.

Constitutional restrictions. The current con-stitutional restrictions on the use of huntingand fishing license revenues requires that thedepartment maintain a species-specific focus inplanning its activities. Consequently, the de-partment may end up managing a specificproperty to enhance a specific game popula-tion rather than to enhance the overall habitatfor the diversity of wildlife that live there. Ourreview of the wildlife/habitat managementprograms in other states and our review of thedepartment’s programs indicate, however, thatthere is no need for this conflict in mission:managing habitat optimally for the diversity ofspecies that occupy it will result in the optimalbalance of general benefits to habitat and directbenefits to consumptive users. Removing theconstitutional restriction that hunting and fish-ing revenues be used only for activities directlyrelated to protecting or propagating huntedand fished species would allow the Legislaturegreater flexibility in funding the highest wild-life and habitat priorities first. While our analy-sis indicates that outright repeal of the constitu-tional limitations on expenditure of huntingand fishing revenues is justified, the Legislaturemay wish instead to take the approach of broad-ening the restriction so that any wildlife, fish, ornatural habitat purpose could be funded fromthese revenues.

Section 711. Deletion of Section 711 of theFish and Game Code would enable the Legisla-ture to further free up funds from a variety offund sources currently available to the depart-ment and apply them toward the highest prior-

ity programs within the department, regard-less of whether these priorities are use-focusedor preservation-focused. Section 711 reflectsthe current constitutional restriction by limit-ing the use of hunting and fishing revenues tohunting and fishing programs. In addition, itlimits the use of other funds to nongame pro-grams. Deletion of the section would allow theLegislature to establish priorities and then fundthem in priority order.

Dedicated accounts. Deletion of all dedicatedaccounts would further enhance the DFG’sflexibility and thus its effectiveness. These ac-counts generally are set up because a particularinterest group desires a specific set of activitiesaccomplished. The DFG then implements theseactivities, even if they are not consistent withthe DFG’s highest priorities. Moreover, some-times the enabling legislation places an artifi-cial cap on the amount of money the depart-ment can charge for administrative overhead.This often means that other fund sources mustsubsidize the costs of managing dedicated fundprograms. Thus, dedicated accounts can bothdistract the department from its highest priori-ties and drain the department’s funds by subsi-dizing lower priorities.

The objective of repealing the constitutionaland statutory restrictions and eliminating thededicated accounts should be threefold. First,these steps should eliminate the current incen-tives to fund low-priority programs at the ex-pense of higher-priorities just because fundsare available. Second, eliminating funding re-strictions should maximize flexibility for theLegislature when setting program priorities forand funding activities of the department. Third,these steps should enable the Legislature andthe administration to manage the activities ofthis particular department more effectively.

CONCLUSIONdual and often conflicting mission, the Legisla-ture and the department will not be able tosolve the department’s fundamental long-runproblems, including how to effectively allocate

In the preceding analysis, we have focused onthe major problems facing the DFG, both in theshort run and in the long run. In our view, aslong as the DFG continues to operate with a


Figure 14

Summary of Action Steps to ResolveOngoing Problems within theDepartment of Fish and Game

The Legislature should:

✔ Determine the primary mission of thedepartment so that conflicts between pro-grams focused on resource use and pro-grams focused on resource protectioncan be resolved.

✔ Implement programs and allocate re-sources consistent with the primary mis-sion in order to reflect overall legislativegoals and priorities.

✔ Establish a policy of considering thelevel of uncertainty when appropriatingfunds from new revenue sources in orderto ensure that adequate reserves exist tofund shortfalls.

✔ Direct the DFG and the Resources Agencyto focus the department's planning ef-forts so as to develop a strategic andoperational planning process to guide thedepartment's operations.

✔ Eliminate statutory restrictions and pur-sue elimination of constitutional restric-tions placed on departmental revenues,in order to fund highest program priorities.

funds to different programmatic needs that areexpanding at a rate faster than the resourcesavailable. Figure 14 summarizes the action stepswe believe are needed to address this and theother basic problems confronting the Legisla-ture with respect to the DFG. As the figure

shows, the Legislature should, as a first steptowards resolution of the department’s prob-lems, establish priorities for the overall missionand objectives of the DFG. In addition, thedepartment must improve its estimates of rev-enues and, in turn, and budget expenditures

The Department ofFish and Game should:

✔ Re-evaluate its organizational structureand staff allocations in order to solveongoing communication problems andto enhance program effectiveness.

✔ Continue improving accuracy of rev-enue estimates to avoid proposing ex-penditure of funds not likely to material-ize.

✔ Periodically modify allocation of fieldstaff to respond better to pressuresplaced on California's wildlife resourcesby increasing population and develop-ment.

✔ Continue the current planning processand integrate ongoing planning into an-nual budget development to improvepriority setting and accountability.


reasonably and conservatively in order to livewithin its means. Repealing constitutional andstatutory restrictions also is necessary in orderto allow the DFG to move away from a narrowfocus driven by the requirements of specificfunding sources and broaden its perspective tomeet the fish, wildlife, and habitat challenges oftoday and the next century. Eliminating theserestrictions, coupled with increased planningefforts on the part of the department and theResources Agency, would enable the Legisla-ture to establish priorities and fund the highestpriorities first.

Finally, the Legislature should consider awide range of policy options to address thelong-term workload and funding problemsfaced by the DFG. As human population pres-sures on habitat mount, the workload demandsplaced on the DFG increase and will exceedavailable resources. The Legislature should con-sider reducing programs it deems less criticaland/or increasing the revenue base of the de-partment through a variety of impact fees andbroad-based fund sources such as the GeneralFund or general environmental funds based onits assessment of program beneficiaries.❖


This Special Study was prepared by Ruth Coleman under the direction of Sarah Reusswig Olsen, (916) 445-5616.Diana Canzoneri and Michael Zelner provided invaluable assistance. Others contributing to the study wereCarol Daniel, Kate Hansel, and Paul Navazio. For additional copies, please contact the LegislativeAnalyst's Office, State of California, 925 L Street, Suite 610, Sacramento, California 95814,(916) 445-2375. Permission is granted to reproduce this study as needed.

Legislative Analyst’s OfficeRecent ReportsCalifornia Maritime Academy: Options for theLegislature (January 1990), Report No. 90-1.

AIDS Education in Correctional Facilities: A Review(January 1990), Report No. 90-2.

A Perspective on Housing in California (January1990), Report No. 90-3.

K-12 Education Fiscal Facts (February 1990).

Year-Round School Incentive Programs: An Evalua-tion (April 1990), Report No. 90-5.

State Spending Plan for 1990-91: The 1990 BudgetAct and Related Legislation (August 1990), ReportNo. 90-6.

Child Abuse and Neglect in California: A Review ofthe Child Welfare Services Program (January 1991),Report No. 91-1.

Annual Report, Legislative Analyst’s Office: FiscalYear 1989-90 (January 1991), Report No. 91-2.

Analysis of the 1991-92 Budget Bill: Summary ofFindings & Recommendations (February 1991),Report No. 91-3. This report presents the results ofour detailed examination of the Governor’s Budgetfor 1991-92.

The 1991-92 Budget: Perspectives & Issues (Febru-ary 1991). This report provides perspectives on thestate’s fiscal condition and the budget proposed bythe Governor for 1991-92, and identifies some of themajor issues facing the Legislature.

Analysis of the 1991-92 Tax Expenditure Budget:Overview and Detailed Compendium of IndividualTax Expenditure Programs (May 1991), Report No. 91-4.

County Fiscal Distress: A Look at Butte County(December 1989).

Bonds and the 1990 Ballots (January 1990).

A Review of the Governor’s Housing Initiative(March 1990).

California’s Low-Income Housing Tax Credit (May1990).

The State’s Budget Problem (December 1990).

An Overview of the 1991-92 Governor’s Budget(January 1991).

Recent Policy Briefs and Issue PapersCalifornia’s AFDC Program: Current Trends, Issuesand Options (February 1991).

Reforming California’s Mental Health System(March 1991).

Organizing State Government to Meet California'sEnvironmental Protection Priorities (May 1991).

Implementation of Proposition 99: An Overview(May 1991).

Sources and Uses of K-12 Education Funding Growth:1982-83 through 1991-92 (August 1991).

Community Corrections

State Infrastructure

Uses of State Bond Proceeds

School Restructuring in California

State Rail Program

Reprints from the1991-92 Perspectives and Issues (February 1991)

State Fiscal Picture

Strategies for Addressing the State’s Bud-getary Imbalance

Proposition 98

The County-State Partnership

California’s AFDC Program

LAO

Copies of these reports can be obtained by contacting the Legislative Analyst's Office,925 L Street, Suite 610, Sacramento, California 95814, (916) 445-2375.

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