The Vermont legislative leadership and the Douglas administration came together last week to endorse a package of government reforms that could save the state $38 million in general funds.
The initiatives represent about 25 percent of savings needed in fiscal year 2011 and $12 million in reduced property tax “pressures.”
In fiscal year 2012, full implementation of the changes could reduce General Fund spending by $72 million and ease property tax “pressures” by $26 million, according to the plan.
The reforms are conceptual at this point, but the notion that the state needs to rethink the way it functions is a given, according to Republican and Democratic leaders.
As Sen. Diane Snelling, a Republican from Chittenden County, put it last week: “This is a package of ideas that has consensus and agreement between legislators and the administration. The numbers are agreed on by the offices of Budget and Management and Joint Fiscal. That’s a significant step forward.”
Republicans Gov. James Douglas and Lt. Gov. Brian Dubie, along with Democrats Speaker of the House Shap Smith and Senate Pro Tem Peter Shumlin, agree that in light of the many cuts that have already been made to services and employees and the $150 million deficit the state faces this year and $250 million next year, they have no choice but to restructure state government.
To that end, the Legislature paid $100,000 to the Public Strategies Group, a consulting firm from St. Paul, Minn., which has helped restructure federal entities and the state governments of Iowa and Washington state. The firm was charged with suggesting changes to Vermont’s government services.
Last week, Public Strategies presented eight “challenges,” to the Joint Legislative Government Accountability Committee, in a 42-page report developed by the consulting firm and a steering team consisting of Snelling, Jim Reardon, the commissioner of the Department of Budget and Management, Neale Lunderville, the Secretary of the Administration, Rep. Donna Sweaney, D-Windsor, and Rep. Michael Obuchowski, chairman of the House Ways and Means Committee.
The report, “Challenges for Change: Results for Vermonters,” cites areas in contracting, human services, education, economic development, corrections and environmental permit regulation that could be re-evaluated and significantly reorganized.
Babak Armajani and Cynthia Eisenhauer, representatives from the consulting firm, explained to the Joint Legislative Government Accountability Committee that the “challenges” are vehicles for enabling lawmakers to question their assumptions about the status quo.
“These are not proposals,” Armajani said in his opening remarks to the committee. “The necessary work has not been done, and that’s for a very deliberate reason. Most such programs are developed by professionals in Vermont state government who work day to day with these issues and have the most expertise.
“Our experience is, when consultants bring in fully hatched proposals, they’re not as powerful or well accepted as they are if the people who are actually responsible for implementing them are involved in developing it.”
Armajani said legislators and the executive branch will have to flesh out the details of the reforms.
Armajani refers to the “challenges” as “excellent opportunities” for spending less money and getting better results at the same time. The money has to be cut, he said; the question is, “will all that cutting hurt Vermonters, or are there some ways in which this can occur and actually benefit Vermonters with specific results for services?”
His colleague, Eisenhauer, told lawmakers that “very few states are actually looking at ways of reforming services.” And, she said, Vermont is the only state that has worked across party lines and branches of government to come up with a consensus package of reforms.
In each of the eight “challenges,” divisions, departments and agencies would become “charter units.” Each unit would be asked to give up a percentage of their budget and “in return they will have more flexibility as part of the results,” Eisenhauer said. The units would receive one-time investment funding to be used as “seed capital” for improving technology, services models and efficiencies.
Nearly half of all of the savings achieved through the “challenges” would come from an intensive restructuring of human services — $16.8 million in fiscal year 2011 and $33.4 million in fiscal year 2012. The report outlines four main reforms to these programs: 1. Creating a “client-centric approach to services with a single “doorway” or intake system for clients; 2. Changing eligibility criteria and funding systems for the long-term care of aging Vermonters; 3. Creating a “credible outcome measurement infrastructure” for the Agency of Human Services; and 4. Using “competitive incentives and enhanced collaboration” to motivate Designated Agencies, which provide regionalized developmental and mental health services to Vermonters, to “create better results for the money.”
The “Focus on Learning” section calls for a $40 million reduction in school administrative spending in fiscal year 2012; the savings would be used to reduce property taxes and the General Fund budget. Another suggestion high on the list is to “make all Vermont schools charter schools.” These changes would lead to General Fund savings of $3.97 million and $7.37 million in property taxes in fiscal year 2011, and $10.5 million in General Funds and $19.5 million in property taxes the following year.
State aid for special education funding for cases that cost $50,000 or more would be reduced to 90 percent under the plan. A dollar limit would be set for out-of-state special education treatment, and such placements would be managed at the state level. These changes, according to the plan, would save $2.1 million in General Funds and $3.9 million property taxes in fiscal year 2011. The following year, the state would save $3.68 million in General Fund expenditures and $6.83 million property taxes, the consultants estimate.
The report suggests that regulatory reform be redesigned to include “compliers” (those who are regulated) in the rule-making process, to make compliance easier and to give people feedback on their level of compliance. Streamlining bureaucratic processes could provide faster licensing without compromising standards, according to the report. Total savings: $360,000 in fiscal year 2011, and $510,000 in fiscal year 2012.
The Joint Legislative Government Accountability Committee passed the bill last week. The House Human Services Committee takes up the report this week.
PSG gives overview of eight “challenges“
PSG: Client-centric human services would save money and provide better results
PSG: State could rebalance corrections, create charter school system
PSG: State could consider negotiating better health care contracts
