Time to reconfigure Dept. of Toxic Substances Control?

Just as the coronavirus ruthlessly attacks vulnerable points in the human body, the pandemic is also exposing weaknesses in a range of society’s organizations and arrangements. Government is no exception.

But as difficult as a crisis like this can be, with effective leadership there are also opportunities for far-reaching reform and improvement.

The people of New York City recall the hellish 9/11 attacks. As devastating as they were, valorous, tough-minded actions by determined citizens and public servants alike resulted in extraordinary recoveries in Manhattan, the state of New York and the nation. Many aspects of life in the city after 9/11 were even better than before.

First, what is the core mission of DTSC? Mission creep is a risk in all bureaucracies.

Considering the response to COVID-19, New York Gov. Andrew Cuomo asks: “How do we use this situation [to] reimagine and improve and build back better?”

This is also a pertinent question for California.

With our massive size, talented population and innovative institutions, the Golden State is uniquely positioned to build back better. And there is no greater area of opportunity than reforming and updating our state’s massive government bureaucracy. With the economy and state revenues in free fall, there is really no alternative.

One example of the necessity and prospect of reform is the state Department of Toxic Substances Control, part of the California Environmental Protection Agency. DTSC, as it is known, is charged with regulating hazardous wastes and overseeing cleanup of contaminated sites. Increasingly, it has come under scrutiny and even withering criticism from a range of stakeholders – from environmental advocates to the industries that it regulates.

Key issues relating to the future of DTSC can be found in examining any large bureaucracy. Dealing effectively with DTSC’s challenges can create a road map for other agencies.

First, what is the core mission of DTSC? Mission creep is a risk in all bureaucracies. Can the organization’s mission be summarized in a single sentence? Has it evolved and expanded on an ad hoc basis, in good-faith responses to crises over time? DTSC’s functions include hazardous waste regulation, remediation of contaminated land and water, and development of improved consumer products through “green chemistry.” Is this an optimal combination under a single umbrella?

Some observers recommend a structural change to a multi-member governing board, such as the one that oversees the California Air Resources Board.

Second, are there areas of overlap or duplication with other agencies? Could tasks be reconfigured – or reassigned – to achieve the same or better results with fewer resources? DTSC, for example, shares toxic site cleanup responsibilities with the Regional Water Quality Control Boards. Could those tasks be consolidated? Similarly, would the “green chemistry” program better fit in a science-focused agency like the Office of Environmental Health Hazard Assessment?

Third, if we were starting from scratch, would the state even create a DTSC today? Should California emulate U.S. EPA’s and other states’ rising emphasis on land management for the next phase of toxics regulation?

Fourth, can the agency’s mission be translated into a small number of output measures? Gov. Gavin Newsom and the Legislature, after significant opportunities for public input, should reach agreement on a handful of clear and simple stretch goals. These can yield indicators that can form the basis for future management, budget and personnel decisions.

Fifth, is the agency structured in the best way to advance its goals in the future? DTSC is a hierarchical organization led by an appointed director. Some observers recommend a structural change to a multi-member governing board, such as the one that oversees the California Air Resources Board. There are pros and cons to either approach that merit open-minded consideration.

Unduly burdensome fees could force California’s scrap-metal industry out of state – or shut it down altogether

Sixth, does the agency have sustainable funding? Amid a tsunami of red ink from the COVID-19 response and the stalling of economic activity, Gov.  Newsom has directed state government to reduce spending across the board. DTSC relies on general fund revenues (essentially revenues from all taxpayers) as well as fees from regulated entities. User fees are often justified on a “polluter pays” principle. This theoretically protects taxpayers.

But the principle can also produce an apparent conflict of interest by budget-stressed government regulators. Some critics of DTSC are concerned that the agency may be forced, as general fund revenues drop, to rely unduly on excessive and burdensome fees from the entities it regulates, just because it needs the money.

Consider, as one example, DTSC’s recent move to designate metal-recycling plants as “hazardous waste treatment” facilities. Why should the recycling of metals from California’s massive auto and home appliance after-market be regulated in a way comparable to materials that are “toxic” in general understanding?

In this situation, more extensive regulation – including the imposition of massive additional fees in the name of the environment – could have perverse, unintended consequences. Unduly burdensome fees could force California’s scrap-metal industry out of state – or shut it down altogether. This would result in the unnecessary loss of good, green jobs for Californians.

The challenges of historic moments like this also present corresponding opportunities. The governor is enlisting top tech and biotech companies to assist in COVID-19 response and recovery. Bringing similar thinking to government reform generally could bring consequential, lasting change to Sacramento.

Given the high value that Californians have historically placed on the environment in general – and recycling in particular — DTSC could be a good place to start.
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Editor’s Note: James Strock was the founding secretary of the California Environmental Protection Agency from 1991-97 under Republican Gov. Pete Wilson. Winston Hickox was secretary of CalEPA from 1999-2003 under Democratic Gov. Gray Davis.