A Window of Opportunity for New State Leaders

States are more agile than the federal government in their ability to experiment with new solutions and to overcome partisan hurdles.
November 26, 2006 AT 3:00 AM
Bill Eggers
By William D. Eggers  |  Contributor
Executive director of Deloitte's Center for Government Insights

With attention focused on the Democrat takeover of the House and Senate, the other big story of '06 has been all but ignored. The elections saw enormous changes at the state level. The largest class of new governors in years -- seven Democrats and four Republicans -- were voted into office, 11 state legislatures switched party control, and a host of new initiatives, covering everything from infrastructure funding to eminent domain protection, were passed by an electorate impatient for change.

What makes this large influx of fresh blood in statehouses so important is that if sleeves are going to get rolled up and serious change is going to happen in American government, it's most likely to happen at the state level. States are more agile than the federal government in their ability to experiment with new solutions and to overcome partisan hurdles. They are the incubators for both the great ideas and future leaders of America -- at a time when citizens are seeking both but are increasingly skeptical about whether government institutions can deliver either.

Today's new and returning governors and state legislators are well positioned to close this credibility gap.

After all, the rising economic tides of recent years have given a welcome lift to most state treasuries, providing today's governors and state legislatures some flexibility to drive a change agenda. This fiscal breathing room affords state leaders a window of opportunity that hasn't existed for at least a decade: to strategically address vexing long-term and structural issues -- from runaway Medicaid costs to poor educational performance to crumbling infrastructure -- while also positioning their states to address the daunting new challenges of the 21st century, including the challenges of global competition and serving the aging citizenry.

How can state policymakers take advantage of this window of opportunity and create a meaningful legacy?

Take bold action now. Tackle the toughest issues that are most important to your state. Solve the underfunded public pension crisis. Close the $1.6 trillion infrastructure deficit facing states. Reform an education system being overtaken by competitors abroad and imperiling America 's traditional leadership in scientific innovation. Find a solution to spiraling Medicaid costs -- while also improving services to the 53 million Americans who depend on it for their health care needs.

Solutions to these problems demand more than a band-aid approach; they require bold changes and skilled execution.

Don't reform. Transform. State governments are shackled by old ways of governing: hierarchical organizational structures that use a narrow, silo-ed approach to attack complex problems; personnel practices and pension systems designed for an age when lifetime employment was the rule, not the exception; service models driven by government bureaucracy, instead of citizen needs and preferences; budgets that measure results based on how much is spent, not what is achieved; and tax systems and trade policies designed around manufacturing, physical goods, and localized markets -- rather than services, information, and a seamless global economy.

Given the huge gap between past practices and current and future needs, incremental change simply is not enough. Obsolete, century-old approaches need to be replaced with new models that better speak to the needs of the 21st century.

Meet globalization head-on. The business world has shifted rapidly to a global playing field, where talent and production are sourced to wherever companies derive the greatest competitive advantage. Yet states have only recently begun to react to this sea change, and the opportunities to move their economies forward in the new century demand attention. Knowledge-focused businesses are drawn to talent. Will your state's workforce and educational system attract the world's most successful, growing companies?

Use emerging federal flexibility to promote innovation. A variety of waiver processes are available to relax the requirements of federally mandated programs, allowing states to experiment with ways of delivering health care, human services and other programs. Use these waivers to develop innovative new ways of funding, operating, and delivering state programs.

Finally, focus on a few goals and stick with them. Avoid the temptation to take on too many issues at once. Identify a handful of goals, state them clearly, and see them through. Your success hinges on your ability to articulate these goals in a way that prompts others to share your vision.

State leaders face an awesome responsibility, and yet also have a tremendous opportunity. State programs directly impact huge segments of society -- and in many cases state innovations help shape national policies.

Implementing meaningful changes carries significant risk, and it demands courage. Be confident. Think big. Put problem solving over partisanship. Now this opportunity is yours.