Whatever you may think of our dysfunctional Legislature, the truth is that it's probably worse than you imagine. What it did to Assembly Bill 601 is Exhibit A. While the Legislature grudges state programs every penny these days, it has refused to let me reduce a fee that is too high. It's a tiny amount – 10 cents on every auto insurance policy – but it's money the Department of Insurance doesn't need right now, and I thought it was good policy to ask for the reduction. But the Legislature insists that motorists be overcharged.

The specifics aren't that important, but they're worth knowing. Insurers are assessed a 30-cent fee on each auto insurance policy, which is passed on to policyholders. This fee was initially established to help the Department of Insurance reduce a backlog of auto insurance fraud cases that had built up over the years. We did our job and reduced the backlog. The fund this fee goes into has been building up a surplus for a couple of years, and under current law I can't spend it for any other purpose.

When I first came to the department, I did what I had promised during my campaign – I applied some common-sense rules from the business world to government. I ordered a complete review of all our operations, services, priorities and budget.

This is how we found the surplus accruing in this particular account, and it made sense for me to ask the Legislature to change the law. But the Legislature refused my request – and is making me continue charging California policyholders 10 cents more than I need or can use. Lawmakers have offered me no explanation, and simply eliminated the fee decrease and passed the rest of the bill, which extends the full fee for five more years.

It's reasonable to conclude that the Legislature wants me to continue building up that surplus so it can "borrow" from it to help pay down the general fund deficit. This kind of unofficial borrowing from Peter to pay Paul is something the state does regularly. But the fact that legislative leadership will not own up to this petty tactic shines a spotlight on the dishonesty that I think underlies the voters' utter frustration with government.

Honest budgeting can be done if you try. It took us a year to look at my department's budget, and we turned up $13.5 million in savings – 10 percent of our operating budget – without laying off a single employee or cutting back on any of the services we provide. This 10 percent reduction is permanent, not one-time, like so many cuts we see offered. And we haven't stopped there. We run a tight ship at the Department of Insurance and are on track to exceed the $13.5 million figure by at least another $4 million. In fact, we are approaching 15 percent in savings.

This is millions of dollars that was being spent without returning value. In addition to the 10 cent auto-fraud fee, which is $2.8 million a year, I found cable TV subscriptions that we had been paying for, but that no one was using (one subscription was for an employee who didn't even have a TV), positions that were on the books but had been unfilled for years, and a cornucopia of other, individually minor examples of taxpayer dollars that no one was keeping very good track of. People living in Los Angeles know what I'm talking about. The L.A. Times reported on its front page about the 8,000 phones the county pays $1.5 million a year for, but which no one ever answers. And the figures could be double that. This is only because no one was looking.

The Legislature can never focus that finely. Only the people in charge of each agency or department can. But that is never demanded of them until the Legislature faces a political crisis, and then its gives people weeks, or months at best. This is one of the primary ways that government differs from responsible businesses; though, to be fair, we are all too familiar with some very large businesses that have not, themselves, been this responsible with their finances – and have paid the price.

I do not want to overpromise here. The political pressures on the Legislature are enormous, and there is an urgent need for experienced leaders who have the confidence and bravery to be honest with voters. Gimmicks and tricks like the one they have imposed on AB 601 continue to hide some real and very flawed budget practices.

I do not want to be enlisted in collecting money for legislators to "borrow" and particularly not when it is coming directly out of the pockets of insurance policyholders. It's only 10 cents per policy – but along with so many other ruses, it adds up to billions of dollars in damage to our credibility.

Steve Poizner is California's insurance commissioner