(Photo: State of California)

Now their examination is done and they claim the nation's most populous and indebted state could save an average of $6 billion a year over the next five years by eliminating or consolidating many state agencies.

But as Living on Earth’s Ingrid Lobet reports, one recommendation may come as a shock to clean air advocates around the nation.

LOBET: The budget review culminated in a giant warehouse chosen for its symbolic value: a place where the state currently spends, or wastes, some $94,000 a month storing old furniture and computers. Amid fanfare, the reviewers presented their six-inch sheaf of cost-cutting recommendations.

MALE: Governor (CLAPPING) this is volume one (CLAPPING) and this is volume two.

(WILD CLAPPING AND CHEERING)

LOBET: Many Californians, including environmentalists, agree the state could well stand to reduce agency overlap and eliminate unnecessary boards. But most were surprised to see the California Air Resources Board proposed for elimination. Tim Carmichael is executive director of the Coalition for Clean Air.

CARMICHAEL: The suggestion that we would eliminate one of the most effective agencies in the world, not just the state, but in the world, at reducing air pollution is really curious.

LOBET: The California Air Resources Board is credited with pushing for new, clean technology that then becomes the standard across the country -- cleaner gasoline, cleaner boat engines, lawnmowers, paints. The results are measured in tons of pollutants kept out of the air.

Several people I spoke with think the budget reviewers swept the Air Resources Board into their broader recommendations to eliminate 118 boards and commissions, which can be quite costly to run. But some people, like Gail Ruderman Feuer of the Natural Resources Defense Council, think this is not simply a case of throwing the baby out with the bathwater.

FEUER: I assume industry had a direct hand in it and it was very purposeful, but I don't know specifically who would speak with whom. Clearly the auto industry would be thrilled with this recommendation

LOBET: Or maybe not. One industry source wasn't so sure that dissolving the Air Resources Board would mean an improvement -- there would still be an air pollution division but it would be under the state's environment chief, Terry Tamminen. And could the proposed elimination of the Air agency be an attempt to kill its new effort to regulate carbon dioxide in tailpipe exhaust? No way, says Tamminen. The governor's committed to it.

TAMMINEN: He said in the Los Angeles Times and other places that he fully supports California's landmark greenhouse gas law and intends to defend it from the anticipated court challenges along the way, those are literally his words.

LOBET: Tamminen says any department reorganization might yield greater scrutiny of industry. And he rejects the refrain that environmental regulation means a steady loss of business in California. He cites the example of a new Fox animation studio that would have brought lots of new jobs.

TAMMINEN: But they ultimately chose to build it in Arizona and the top two reasons that they cited was not the cost of doing business or environmental regulation, it was rather the lack of it – it was traffic and air pollution. They didn't want to raise their families in the community as they found it in southern California.

LOBET: The recommendations of the budget reviewers are in any case very preliminary. They will have to pass through many screens, a special panel, public hearings, the governor, and then the legislature. And if he doesn't find success there, Arnold Schwarzenegger may try to bring the overhaul, in some form, directly to the voters.

For Living On Earth, I'm Ingrid Lobet in Los Angeles.