Editor’s note: This op-ed is by John Zenie, a member of the Colchester School Board and a Vermont State Representative who is not running for re-election.
Business owners know that in order for their business to be successful for the long term they must plan strategically across their product and service offerings and operational costs. These plans include preparing for both good and bad economic times and are based on a vision and mission of their business. The resulting goals are based on guiding principles that act as rules for how the business is to be successful. One of those principles is being responsive to the private or public stockholders with the bottom line to make profits. This results in having a successful business that operates in a pragmatic and predictable manner.
Business owners’ plans include prioritizing their work so that they know how to grow and slow the business based on an ever changing business climate that includes the national and world economic fluctuations. When times are good they save some money for the bad times and make investments for the future. When times are bad they trim those operations that are not meeting the company’s prioritized goals.
Finding efficiencies and improving outcomes is an ongoing process in a successful business. The most common way to analyze existing operations is by looking for redundant or non-effective tasks and eliminating them as appropriate. Once these tasks are identified the savings are booked when the task ends or is modified.
The state government also must plan to be successful for the long term and elected officials need to be responsive to every citizen because every citizen is a stockholder. State officials must run the state based on the laws of the state, of course the laws change and there are different interpretations of the laws that result in controversy. So state officials have the huge challenge of trying to please everyone based on their own interpretations which will be different than the interpretations of others. This does not dismiss the responsibility of state government to enact and implement laws that are consistent and responsive to Vermonters.
The Challenges intention to increase efficiencies and improve outcomes is not a new concept. The new concept in Challenges is the method of implementation by way of cutting the money and later figuring out the implications to government services.
During the 2010 legislative session a group of bills called the Challenges for Change were passed. These bills were to address the issue of reducing the budget because the state revenues are lower due to current economic times. In February of 2010 the first part of C4C which was passed by lawmakers, eliminating a net $38 million from the General Fund for Fiscal Year 2011 which started on July 1. Then the state agencies and departments were told that they had four weeks to identify how they would save the money that is no longer there.
In May, Challenges part 2 was passed. This Act locked in the budget reductions without identifying where they would all come from. We are now over the 1st quarter into the FY11 budget year and the Challenges are about $10 million short of meeting the $38 million removed from the budget. The administration recently announced that department heads have been told to cut their budgets by 6 percent. This is being done to meet the unmet budget cuts and is in contradiction to the Challenges initiative of reducing the budget through efficiencies.
So instead of analyzing the business and identifying efficiencies and then booking the savings, like business owners do, the state booked the savings — and are still searching for the efficiencies. To compound the problem, the Challenges are set to continue into next year by looking for a net $34 million savings for FY12. Yes, that is $34 million additionally over the $38 million they had to save for FY11.
The Challenges intention to increase efficiencies and improve outcomes is not a new concept. The new concept in Challenges is the method of implementation by way of cutting the money and later figuring out the implications to government services. The government restructuring plan also includes a cut of $23.2 million for the FY12 school year budget that school boards are now scrambling to figure where they can save that much money. More on the education section of the Challenges in my next article.
The Challenges effort has good intentions and the next legislature will have the opportunity to fix the implementation flaws. Right sizing state government needs to be done but let us do it the correct way – the way that successful businesses have been doing it for years.
