In essence what we have proposed, rather than centralized information, is to centralize information about information by means of an information index that would operate just like a card catalog in a library.

We see these two items operating together with the organizations as a federation; this is the title we have given our proposal, figure 13. We propose that the system operate as a federation in which the elements of the federation are the computer centers which presently exist or are being implemented-those of counties, districts, cities, and others, as well as the individual organizational electronic data processing installations being implemented by such State organizations as correction, finance, and the like. All of these units would be tied together by a communication network, and operated under the direction of the master index which tells each one where to obtain the needed information.

Finally, we have indicated on our chart one more word "compatibility." The price of operating as a federation is acceptance of a number of basic rules. These rules have to be flexible enough, however, to provide the basis for local autonomy, local operation.

Let me cite an example from the business world. The railroad system of the United States is composed of independent railroads which operate together as a total transportation system. They do this by having adopted certain basic standards such as coupling mechanisms,

maximum size of rolling stock, braking systems-and yet they operate independently. They can make their own rules as far as their profit and loss statements are concerned, but they remain a total system.

This is the basis of our proposal for a federated information system for California.

Senator NELSON. How long would the development of such a system take?

Mr. LAULER. Our development plan is a program of action, and I won't go through it in detail, but I will identify four milestones for you, figure 14.

The end of the first 3 years will mark the completion of a pilot operation in which will be established in a smaller way the basic parameters of the whole system. This pilot program will perhaps involve a county and a State department.

In 5 years the system could begin to become operational, and the State could start tying together, by means of an information index and the communication system, departmental organizations of the State with agencies of several counties until an approximate full operation status is reached in 10 years. At this point the entire system would be operated on a statewide basis.

The costs are illustrated on this chart, figure 15, which gives development cost and operating cost. This averages out roughly to $10 million a year. We see the operating costs of the system stabilizing at approximately $13 million per year at the end of the initial decade.

What can we expect to get out of such a system? What are the benefits of a system of this type? And again we have categorized these benefits into four general classifications on this chart, figure 16.

No. 1, of course, is a big cost reduction. As an example we show here the idea of automatic reporting. It will allow direct discussions between computers, thus avoiding the necessity of going from paper to key punch operator, back to paper into the machines, and so on. The elimination of the various chains of media is an important one and will materially contribute to cost reduction.

We see the possibility for better program evaluation in public assistance with the idea of being able to build files on a family rather than an individual basis. This could be one of the determining factors in the success of a particular welfare program in a given locality. We foresee service improvements in which the public will directly benefit by the fact that fewer organizations will require collection of the same type information. Thus we reduce the overlap.

We also see an area of new capabilities in which a total system of this type could accumulate, say, within a given geographical community, information on dropouts from the education level, on public assistance from welfare, on unemployment payments from the departments of employment, and on crime statistics from law-enforcement agencies.

These when put together would add up to a significant picture, which might reveal a critical level before it could be perceived by manually examining the statistics.

To return to the idea of the cost reductions, let's examine the possibilities in California government, figure 17. The California population, as Governor Brown indicated this morning, is growing rapidly and will reach approximately 30 million people by 1980. Government services on a per capita basis show expenditures of $150 per person within the State. By 1980 the general per capita expenditure will reach almost $250 per person. So we have both an expanding population and expanding government services for each citizen.

Similarly the State civil service is growing to keep up with this problem. By 1980 we expect 219,000 in the State civil service work force, whereas roughly it is now 100,000. The same picture is true in county and local governments where the workforce is increasing rapidly.

What does this mean in terms of civil service workforce? We asked what portion of their activities were directly concerned with information handling-typing, filing, and all other jobs involved in information handling. We investigated on an organization basis, on a job-cost basis, by job-code basis, and when you put all of this together it showed that 50 percent of the time of the average civil service person is actually spent in information handling. This means that approximately half of the $1 billion payroll for civil service is dedicated to information handling, and if you extrapolate this information to 1980 you find the cost has risen to $1.8 billion, figure 18.

Senator NELSON. That is what?

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