gov cog playbook 2012

8/13/2019 GOV COG Playbook 2012

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1December 2011 | GOVERNING

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TO UG H T IM ES | A Gu ide fo r Public Offi cial s2

overning in Tough Times A GU I D E F OR P U BL I C OF F IC I A L S

State and local pension shortfalls. Soaring healthcare costs.

Unprecedented levels of public employee layoffs. Across-

the-board cuts, from law enforcement to infrastructure in-

vestment. Overlay on that a political atmosphere variously

described as poisonous and toxic, all of which is sitting

on a fragile foundation of unprecedented levels of citizen

distrust of, and disengagement from, government.

That, essentially, was the grim picture that was

sketched out by Paul Taylor, Governingseditor-at-large, as

he opened the GoverningCost of Government Summit in

September, bringing top state and local ofcials together to

work through issues and problems facing states and locali-

ties in the toughest times many of them have ever seen.

Taylors rst question for the group was simple

enough: Glass half empty or half full, and why do you

feel that way? Half full was the predominate response,

with some very pointed dissension, including participants

like Howard Schussler, assistant director for public works

in Lane County, Ore., who said, simply, I think people

have lost the will to work together. Linda Millsaps, chief

operating ofcer for the North Carolina Department of

Revenue, talked about the consequences of reduced staff:

I have staff who are now getting yelled at regularly by

citizens. With all our personnel cuts, we just cant provide

services at previous levels.

Joe Adler, director of human resources for Montgom-

ery County, Md., noted, Theres this huge antigovern-

ment, antipublic employee sentiment out there right now

that gets in the way of solving problems. On that score,

Louie Wright, president of the Kansas City, Mo., reght-

Introduction


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3

ers union, added what would become something of a theme

over the course of the summit: There are solutions, but too

many communities seem to want services for free.

But for plenty of participants, hard timeswhile daunt-

ing and challengingalso meant an environment of opportu-

nity, including wholesale re-evaluation of what government

does, how government is structured and how it has had to

adapt to the scal realities wrought by the Great Reces-

sion. I see the glass as half full, said Ben Duncan, deputy

director of administration at South Carolinas Department of

Insurance, We were running on a 1968 model of govern-

ment and this has given us the impetus to modernize.

Kelly Harder, director of community services for

Dakota County, Minn., has been busy using hard times to

push for smarter ways to operate in what is one of the most

expensive areas of government. This is a ripe environmentto move initiatives forward, she explained. Added Nancy

Style, a manager with New Jerseys Ofce of Management

and Budget, I am concerned about revenues versus costs;

were one bad thing away from disaster, but this has forced

us to look at what we have to do versus whats nice to do.

Participants spent the next day and a half exploring

that environment, and to coming up with ideas for how to

make progress in tough times. As with last years summit,

we at Governingare setting those ideas out in the form of

plays in this, our second annual 2011 Cost of Government

Playbook. What can governments do to stay in the game and

actually advance the cause of government when it seems like

the opposing forces are aligned and arrayed in a formation

too powerful to allow anyone to pick up yardage?


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TOU GH TI ME S | A Gu ide for Pub lic Off icials4

Put Civility Backin Civic DiscourseCapitol Hill has to change the tenor of their debates,

said Chris Hoene, director of the Center for Research &

Innovation with the National League of Cities, referring to

the almost endless rancor and gridlock were now seeing

in Congress. That tone is not only damaging Washingtonsability to function, he said, its also trickling down to states

and its hard to make tough decisions when government is

being characterized as the problem.

Invest in infrastructure,Education and ResearchIt may seem counterintuitive, but with interest rates at

record lows, its time to invest in infrastructure even if that

means borrowing money, argued John Thomasian, who

recently retired as head of the National Governors As-

sociations Center for Best Practices. Investing in things

like Internet access, rail, ports and other key facilities will

not only generate jobs, but also ensure that the U.S. is in a

globally competitive position as the country comes out the

recession.

But it needs to be done now. Besides slipping in job

growth and global competitiveness, putting off investing in

infrastructure will only mean higher costs down the road as

existing infrastructure continues to deterio-

rate, argued Hoene. Too few governments

have done the critical calculations involved in

delaying such investments.

Infrastructure isnt the only sector that has

seen underinvestment. Thomasian pointed out

that scrimping on investments that directly

impact our ability to compete effectively in

the global economy, will only put us in worse

economic shape down the road. Disinvesting

in education, he noted, is probably one of the

single most shortsighted actions that govern-

ment can take right now.

Take a Hard Look at Long-RangePension and Health Care CostsA regular theme throughout the conference was how to

deal with future scal liabilities due to public-sector pen-

sion obligations. Some at the conference suggested that

governments need to re-examine the promises they make

to retirees by way of pension levels. Others argued that thehealth of public-sector pensions simply hinge on states and

localities making their annual actuarially required contribu-

tions, which many havent been for years. Wright suggested

that instead of putting the blame for the pension crisis on

public employees, governments can lead the way by den-

ing what it means to have a decent and dignied retirement

and what the components of the benet are.

Health-care costs, both for current employees and

retirees are not only an acute problem, but also a chronic

one. Costs for insuring current employees are steadily

cranking upward; the cost of providing health-care services

to retirees is, to some, a huge ticking time bomb waiting

to go off. In many ways, the recommendations for how

to reduce usage and contain costs are the same for public

employees as they are for those on Medicaid and Medicare:

David Osborne, author of Reinventing Government, who

has been analyzing the U.S. health-care system argues for

global payments, whereby those practicing medicine in


The Plays


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the U.S. are paid not for doing procedures but for results,

said Osborne. His prime example: Blue Cross Blue Shield

of Massachusetts, which is now accepting a global per-

person payment for coverage, and then focusing on getting

and keeping clients healthy versus simply paying for ofce

or emergency room visits and tests. Other ideas included

more intense case management for heavy users of the

medical system, along with incentives for pursuing well-

ness (e.g., quitting smoking, losing weight, getting regular

exercise, etc.).

Focus on FutureTreasury Busters:Medicare and MedicaidAmong the more frightening features of the future scal

picture for the U.S. is the looming and crushing cost ofpaying for Medicare and Medicaid. Again, argued Os-

borne and others, the system must be refocused on keeping

people healthy in the rst place and not on running them

through every imaginable medical procedure after theyre

sick. Meanwhile, the federal government right now seems

especially interested in granting waivers to states that want

to try different ways of delivering Medicare and Medicaid,

and are also investing signicant amounts of money in

helping states and localities upgrade health-care IT systems.

Stay Disciplined and SmartToo often the pattern with government has been to expand

services (and size) during good times and then have to

retrench when the economy weakens. If any lesson ought

to be learned from the current crisis, said Sharon Erickson,

auditor for San Jose, Calif., it is that as states and localities

come out of the recession, they should maintain the tight

and disciplined scal practices they are now being forced

to adopt.

Way too many governments have responded to the

current crisis not by looking at better and smarter ways of

doing business, but by simply enacting blunt, across-the-

board cuts. This can have very perverse and unintended

although totally predictableconsequences, pointed out

several summit goers. Katherine Barrett, management

columnist for Governing, pointed out that in making its 2

percent across-the-board cuts, the state of Utah hit state-run

liquor stores, which are actually a net state revenue genera-

tor, revenues that decreased with store closings. Other

states and localities have done similar things, like cutting

staff in their taxation and revenue departments, or in de-


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TOU GH TI ME S | A Gu ide for Pub lic Off icials6

partments of motor vehicles, both high-prole services that

ultimately help bring revenue into state and local coffers.

Clearly in tough times theres a premium on operating

government in ways that focus on efciency and effec-

tiveness, and yet one of the rst cuts that governments

make are in the capacity to do both scal and performance

audits, noted Mark Funkhouser, formerly auditor and

mayor of Kansas City, Mo., and now director of the Gov-

erning Institute. Its the intelligence that those people

provide that allow you to make smart investment deci-

sions, Funkhouser said.

Government Restructuring:Take Down Silos, Then InvestNumerous summit attendees argued that this is the perfect

time to start doing things like shared or consolidatedservices or teaming up with other agencies who may do

work that affect the mission of your agency. Now is the

time to investigate working cooperatively with and among

agencies that have overlapping missions. We need more

cross pollination and cooperation, noted North Carolinas

Linda Millsaps.

If governments are serious about restructuring and im-

proving efciency than they may have to make the invest-

ment required to implement new ways of doing business.

For example, too many governments have put together

lofty and high-prole blue-ribbon commissions on efcient,

effective government and then invested nothing in trying

to effect the recommendations those commissions make.

Blue-ribbon commissions dont change how governments

operate; its those who follow up on a commissions recom-

mendations who do, noted Richard Greene, management

columnist for Governing.

Carefully Analyze Whats WorthOutsourcing and What IsntOften the knee-jerk response of government ofcials is

to think that outsourcing or privatization is an automatic

money saver; its not. A string of recent high-prole, high-

stakes outsourcing efforts, like New York Citys attempts

to upgrade its personnel management system, have proved

to be expensive disasters. On the other hand, Contra Costa,

Calif., recently saved signicant dollars by closing down

its own police department and contracting with the county

sheriffs department for law enforcement services.

Make Sure Youre GettingWhat You Pay For

If governments dont track data on performance and results

then theyll never be able to gure out whether certainprograms or policies are working, said Andrew Kleine,

budget director of Baltimore,. For example, we recently

cut a program mentoring kids of adults in prison and also

a job training program because the evidence was clear that

neither was helping.

Analyze Citizen WantsVersus Needs

When Colorado Springs started taking such stark measures

to budget cutting as not mowing median strips and shutting

off streetlamps, government ofcials actually discovered

some of what they were delivering wasnt actually popular

with residents. When we turned some of the street lights

back on, people actually said they like it better dark, said

Jan Martin, president pro tem of the Colorado Springs City

Council.

Support Your StaffIn rough budget times, and when public employees are be-

ing routinely attacked by certain media outlets, its vital to

try to keep your staffs morale up. Commit to your vision

and to your people, said Jim Payne, director of the Indiana

Department of Child Services, which is overhauling how it

serves children and families. Push for positive change, and

then back your people up.

Dont Just Cut,but Tax ResponsiblyStates and localities have been cutting personnel and ser-

vices at an unprecedented rate. Even the usually sacrosanct

area of public safety has been hit hard, with summit partici-



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pants talking about huge reductions even in police and re

services. As cuts in state and local government move from

fat to muscle to bone, many at the summit argued that it

was time to push back on the no new taxes rhetoric of the

far right. In Connecticut, says Assembly Rep. Diana Urban,

Gov. Dannel Malloy included a mix of cuts, caps and taxincreases to close the highest per capita budget decit of

any state in the U.S. It was clear to the governor and the

legislature that what we werent going to cut our way out

of this crisis. It was also clear to us that the threat that high-

income residents would leave the state if we taxed them at

a slightly higher rate than we had been was unfounded.

Help Citizens Tune inand Understand GovernmentThis may be the most important play, because the problem

of citizen disengagement is, in many ways, making the

current crisis all that more serious and intractable. Funk-

housers characterization of the problem is mind the gap.

Many of those at the summit viewed the current crisis as all

the more disturbing because citizens simultaneously seem

ignorant of what government actually does, while at the

same time blaming government for the current scal crisis,

thus the seemingly virulent anti-tax sentiment now gripping

the nation.

Im surprised at how uninterested citizens are in gov-

ernment, said former New York Lt. Gov. Richard Ravitch,

during the summits nal session on leadership. Part of

that, though, is due to the fact that government frequently

does a particularly bad job of communicating to citizens

what it does. Government is very opaque, added Ravitch.

Richard Greene noted that governments need to think about

the relative value of public hearings where the same 14

people show up because none of them has anything betterto do on Thursday night. Social media, cable television,

voter satisfaction surveys and focus groups are all ways to

think beyond old-school communication. We know that

people are willing to support tax and fee increases and

bond initiatives when they understand what the money will

being going toward, Greene said. This is why all state and

local governments ought to be following the Governmental

Accounting Standards Boards recommendation that each

produce a service efforts and accomplishments (SEA)

report, added Sharon Erickson. Such annual reports, noted

Erickson, allow governments to report directly to citizens

what theyre getting for their taxes and fees.


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S P O N S O R S

The Cost of Government Summit began on an optimistic

note: Attendees saw the glass as half full when it came to

viewing the current situation. However, that attitude was

tempered by pragmatic concerns about working in an envi-

ronment that has seen revenue and budgets plummet, and

where the public has an extremely negative view toward

government overall. For state and local public ofcials,

the double dose of negativity has made the public sector

extremely challenging.Yet much can be done to control and leverage the cost

of government through innovation, disciplined work and

savvy leadership. To start, view todays environment as an

opportunity rather than a time to retrench. With record low

borrowing rates, a growing chorus of experts believe now

is the time to invest in infrastructure, everything from rails

and ports to broadband networks. Investments in educa-

tion will also pay dividends down the road in establish-

ing an educated workforce that can compete in the global

economy.

Just as important, state and local leaders need to devote

time and energy into restructuring internal operations so

they can become more efcient, and to support a demoral-

ized workforce with positive feedback and reinforcement.

At the same time, government leaders need to be smart but

disciplined about controlling the costs of the big ticketshealth care and pensionswhile becoming more innovative

and aggressive when it comes to generating revenue.

Ultimately the payoff will be the ability to re-engage

citizens who have lost faith in government. Help them to

understand the purpose and value of what government does,

because government is not another cost that taxpayers have

to bear, but an invaluable service that helps us all.

Save the Date!GOVERNING Summit on the Cost of Government

September 18-19, 2012

Washington, DC

Registration is free for public sector attendees

Learn more and register now at

www.governing.com/events


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