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Other Budget Issues

Last Updated: 5/17/2015
Budget Issue: Changes to the state's hiring process
Program: Civil Service System
Finding or Recommendation: Needed improvements to the civil service system warrant thorough consideration.
Further Detail


Civil Service Based on Merit Principle. California’s current system of state civil service employment dates back to the November 1934 election, when voters approved Proposition 7, adding what is now Article VII to the State Constitution.  The Constitution requires that all appointments and promotions within the civil service be made under a general system based on merit determined by competitive examination. All state employees are in the civil service unless specifically exempted by the Constitution. As a result, practically all of the state’s non-higher education executive branch employees—outside of the very top ranks of management (such as department directors and deputy directors)—are in the civil service. In the more than 80 years since the voters first established the civil service, a variety of statutes, decisions, rules, practices, and case law have built upon the constitutional framework of a merit-based civil service system. Collectively, these civil service rules establish the state’s policies for hiring, promoting, disciplining, and terminating state civil service employees.

Civil Service System Has Many Problems. In 1995, our office issued a report, Reinventing the State Civil Service, in which we identified a number of issues that we think indicate that the civil service system does not operate in an optimal manner for either the state, its employees, or the public. In the two decades since we issued that report, we have observed efforts by past administrations to improve the civil service—most recently, the HR-MOD project established by the prior administration. Most of these past efforts have resulted in minor improvements. Although we have not conducted a comprehensive review of the state’s civil service system since our 1995 report, we think that many of the concerns we raised in 1995—including merit salary adjustments lacking merit, layoffs being determined by seniority status, and the overall system often impeding efficient and effective conduct of state programs—appear to still be valid concerns. Accordingly, we think our recommendation in 1995 that the Legislature should fundamentally rethink the state civil service system is still valid.


As part of the May Revision, the Governor has proposed a number of changes to the state’s civil service system. Specifically, he has proposed statutory changes that would provide hiring state managers the opportunity to select from a larger pool of applicants than is currently allowed by civil service rules. These changes include (1) expanding the pool of candidates eligible to be considered for a promotional position, including a career executive appointment and (2)  eliminating three requirements that impose restrictions on hiring managers. The three requirements the Governor proposes to eliminate are:

  • The Rule of Three Names. When considering candidates on a promotional hiring list, hiring managers generally may only consider the three individuals whose names are on the top of the list.

  • The Rule of Three Ranks. State job applicants must complete an examination to assess whether they are qualified to work in a particular classification. Candidates for managerial positions are organized into six ranks depending on the scores they receive on the classification’s exam. Because each rank is determined by the candidates’ absolute scores—for example, Rank One includes any candidate who received a score of 95 percent or higher—each rank may have any number of applicants. When considering candidates for a managerial position, hiring managers generally may only consider applicants whose examination scores result in them being in one of the top three ranks.

  • The Rule of One Rank. When considering candidates for a supervisorial position, hiring managers generally may only consider the individuals whose names are in the first rank.

LAO Comment

In general, we agree with the Governor’s goal of improving the state’s hiring process and giving hiring managers greater flexibility. That being said, any effort to significantly improve the state’s civil service system warrants thorough consideration by the Legislature. The Legislature reasonably could conclude that it does not have sufficient time in the weeks remaining before it must approve the budget to adequately review and understand the full implications of adopting such significant policy changes to the state’s civil service system.

LAO Contact: Nick Schroeder.