Half-a-Billion in Waste?

Plus: Making Commissions Useful, Counting Contracts, And More
August 5, 2010 AT 3:00 AM
Barrett and Greene
By Katherine Barrett & Richard Greene  |  Columnists
Government management experts. Their website is greenebarrett.com.

Predictions of the savings that will come from reducing government waste and inefficiency are often wildly overstated. But when we read in the New York Daily News that New York's new deputy mayor for operations, Stephen Goldsmith, "found at least $500 million worth of waste and inefficiency — from unused office space to uncollected debts," it caught our interest. We've known Goldsmith, a former mayor of Indianapolis (and a contributing writer to Governing's Better Faster Cheaper blog), for a while, and we think he's an exceptionally bright and capable guy. So when he says he can save the city $500 million a year by 2014, we get a little excited.

We're going to keep our readers posted about his progress on this front. Please don't disappoint us, Mr. Deputy Mayor. We've become extremely suspicious about claims of future savings from reduced waste and inefficiency, and we'd really love to be proven wrong.

The Mercatus Center at George Mason University has been working in an advisory capacity with a streamlining commission in Louisiana. Two professors — Maurice McTigue, director of the Mercatus Center's Government Accountability Project, and Daniel Rothschild, managing director of the center's State and Local Policy Project — were interviewed for a podcast about the lessons they learned about streamlining commissions based on this effort.

Some of their recommendations:

• Don't have too many commissioners. Ten to 15 is reasonable.

• You need buy-in from both the legislative and executive branches, but the commission should be most strongly influenced by the private sector.

• Don't make the scope of the commission's activity too broad, and make sure it is clearly defined before starting.

• Before starting, look at the work of previous streamlining commissions in your government to see if there are ideas to follow up on.

• Don't have unrealistic expectations for either the speed with which the commission does its work or for seeing recommendations put into action.

• After the report comes out, ask the commission to continue to comment on the actions taken in response to the recommendations.

One more note from Louisiana: In the streamlining work described in the last item, it was revealed that Louisiana had some 16,000 live contracts — far more than anyone would have imagined. Seems to us that it's bad enough when states don't manage contracts well, but they should at least have some idea how many they've got.

And while we're talking about contracts, here's some unfortunate news on that front, which we picked up on in an article in Milwaukee Magazine. Apparently, a so-called "Contract Sunshine Act," which requires all state agencies to provide robust online information about state contracts in excess of $10,000, was passed in Wisconsin in 2006. Sounds great. Had we heard about this in 2006, we would have written an item praising the legislation.

Bet you can guess the rest of the story. According to a July 7 audit by the state's excellent Legislative Audit Bureau, "Concerns have been raised that many state agencies are not complying with the Act's contract reporting provisions. Recent media reports indicated that the Government Accountability Board's Internet site contained contract information for only a small number of state agencies, and that information on some large state contracts was not included on the site. The Department of Administration subsequently indicated that state agencies have experienced problems when submitting information to the site, which was designed by a private firm under contract with the State."

Our favorite quote this month comes from Matt Ouimet, former president of Disneyland. We may be paraphrasing a bit here; when we heard him speak, we didn't have our notebooks out. But this is the gist of it: "Leadership is a matter of making people want to come to work in the morning and do more for you than they would for somebody else."

In the depths of the so-called Great Recession, a number of states transferred dollars from a variety of funds into the general fund in order to pay their bills. This seemed like a dubious practice at the time, but it was understandable in light of the extremely dire conditions in which states found themselves.

Now it turns out that some of the transfers may have been more than dubious — they may have been illegal. At least that's the news from Wisconsin, where the Supreme Court just ruled that transferring $200 million from a medical malpractice fund was illegal, and now the state has to transfer the money back — with interest. Other states that took similar actions should take note.

Who makes more: private- or public-sector employees? There's a lot mushy information out there about this topic. Studies have come out in total opposition to one another, and anyone who wants to prove a point about this topic can just find a study that buttresses it. With that in mind, we were happy to see some recent, sophisticated analysis based on work done by Rutgers professors William Rodgers (Heldrich Center for Workforce Development) and Jeffrey Keefe (School of Management and Labor Relations).

Looking at New Jersey specifically, they took the question a step further and included education levels when making comparisons. From the analysis, the New Jersey Policy Perspective concluded that, "Workers with only a high school education are compensated better in the public sector than in the private sector because most public sector jobs are not paid at minimum wage and include health insurance and pension benefits." On the other hand, "people with bachelors' degrees, those with professional degrees and those with master's degrees all earn significantly more when employed by the private sector rather than the public sector." About 57 percent of public sector workers have a college degree and only 44 percent of private-sector workers do.

Sigh. A couple years ago, Utah moved its employees to a four-day work week (with 10 hours a day). Subsequently, we've taken note of reports in the state that indicated that this had been a very successful strategy. But now, a legislative audit has been released — and picked up by a number of media outlets — that says Utah has been overstating how much money was saved. Apparently, the state went overboard in estimating how much money was saved in overtime and other costs. The savings may have been real, but only a portion of them could be legitimately attributed to the change in the work week.

There are factors other than cost-savings that might still make the four-day work week seem worthwhile. There seems to be a fair amount of anecdotal evidence that it's good for employee morale, for example.

The lesson for other governments is this: Before you pick up on a practice that seems to be working in another city or state, be careful. Or, to put it more bluntly: If you're going to copy off of someone else's paper, make sure they got the answer right.

Public Civility Corner: We want to make it clear up front that we don't have any opinions worth sharing that pertain to the legislation we're going to tell you about. We merely site it as a powerful indicator that there's something seriously wrong with the level of public discourse on matters of state. Apparently, the city council in Boulder, Colo., has put out a set of proposed rules that would "bar people from taking off their clothes, stomping their feet and shouting at council meetings," according to the Associated Press. What's more, the proposal would "prohibit people from addressing comments toward individual council members, jeering or otherwise disrupting a meeting."

It's sad, to us, that anyone would be pushed to believe that such legislation was necessary.

Especially the part about taking off clothes.

Responses to our question — which we posed a month or so ago — about whether new technologies left people tethered to their desks were instructive. While we weren't deluged by response e-mails, those we received were pretty much in consensus that folks have to be very careful not to become slaves to their cell phones or e-mail. As one person wrote, "I had a first generation Blackberry and it was also my city-issued cell phone as I was a member of the emergency operations committee. At first, I'd faithfully answer each time I got an incoming mail at lunch, at home, weekends. Then I realized that nothing I was addressing had sufficient importance to dominate my life. I was becoming a slave to the Blackberry trying to be efficient. It was no different than taking home a briefcase full of work each night.

"I smartened up, manipulated the ring tones and learned to ignore non-duty hour e-mails. Life normalized quickly."

Want to read a handful of additional responses? Click here.