Little Hoover Commission Backs Newsom's Plan to Reorganize BCSH

The state government watchdog Little Hoover Commission has come out in favor of Gov. Gavin Newsom’s plan to split and modernize a sprawling agency into two, bringing more emphasis to housing.

The commission, which exercises oversight of government operations and issues recommendations to the governor and the Legislature, voted Thursday to approve Newsom’s plan to split the Business, Consumer Services and Housing Agency (BCSH) into two entities: a Housing and Homelessness Agency and a Business and Consumer Services Agency.

“A new Housing Development and Finance Committee would be created within the Housing and Homelessness Agency,” says a commission draft report. “The Administration estimates the changes would cost $4.2 million in the upcoming fiscal year, and $6.2 million per year once they are fully implemented. The vast majority of that money would come from the General Fund.”

The commission’s rationale recognizes the state’s dire problems with homelessness and housing affordability.

“The Administration contends that structural reforms can increase the state’s role in facilitating the construction of more — and more affordable — housing. We agree,” the report says. “It is true that many of the specific reforms envisioned in the plan could in fact be achieved even without a reorganization, but we believe the changes envisioned in this plan can, if properly implemented, make concrete improvements in the state’s housing policy.”

Since its creation in 2012, the original BCSH has grown to encompass various functions. It now has about 8,000 employees working within a $4.6 billion operating budget departmentwide, and according to its website, its responsibilities now include “licensing and regulating over 4 million professionals, businesses and financial services; funding and facilitating the preservation and expansion of safe, affordable housing; advancing statewide collaborative efforts to prevent and end homelessness; and guarding and enforcing California’s civil rights laws.”

Under its current structure, BCSH is the umbrella agency for the Alcoholic Beverage Control Appeals Board, the California Interagency Council on Homelessness, the California Horse Racing Board, the California Housing Finance Agency, the Department of Cannabis Control, the Cannabis Control Appeals Panel, the Department of Alcoholic Beverage Control, the Department of Financial Protection and Innovation, the California Department of Consumer Affairs, the Civil Rights Department, the California Department of Real Estate, and the California Department of Housing and Community Development.

The agency chief information officer for BCSH is Jason Piccione, who was appointed in December 2020. The veteran of state service was named a CIO of the Year in 2018 by the California Public Sector CIO Academy and was featured in an Industry Insider — California One-on-One interview in August 2020.

The Hoover Commission report notes: “The responsibilities of the current Agency have grown far more diverse, such that it now includes component departments with little connection in their duties and policy domains. A narrower and more logical grouping of policy areas would allow for greater focus by agency leadership and would also allow future governors to appoint agency leaders with relevant experience.”

Newsom submitted the reorganization plan to the Legislature on May 5, and the commission must now submit its report to him and the Legislature by June 4. Either the state Senate or the Assembly can approve or veto the plan by July 4. If not vetoed, the plan takes effect July 5.

Thursday’s commission meeting included discussion of the numerous details of the reorganization plan. A video of the hearing is available online. The BCSH Strategic Plan 2023-2026 is also available online.