Rightsize:Government Budgets in the 21st

Century

Council of State GovernmentsJanuary 20, 2012

The Government People Want

• Functional• Streamlined• Constantly improved• Lower- and-lower priced• Personalizeable• Not just left or right

Outline of Presentation

• Waste is a Terrible Thing to Mind• A New Twist• An Ounce of Prevention• Talkin’ ’bout de-Regulation• Providing Some Backbone• The Life Raft

Waste is a Terrible Thing to Mind

Comprehensive Efficiency Reviews

• Texas – first in the nation– $4 Billion the 1st year

• National Performance Review Clinton/Gore)– $108 billion 1st year

• Our experience:Consistently 5%

The Basic Approach

The Basic Approach

Savings Examples

• Employ technology to fight Medicaid fraud

• Implement Reverse Auctions

• Calibrate salt spreaders to reduce road costs

• Eliminate most free postage for prisoners

• Consolidate agency mail service

• Combine duplicative commissions

• Consolidate highway pipe types

• Require doubled-sided printing

• Eliminate blankreport pages

A New Twist on Human Services

• 19th Century Model• “Discovery of the Asylum”

– Insane Asylums– Poor Houses– Orphanages– Penitentiary

• Year in the State Penvs.

Year at Penn State

Corrections

• Divert non-violent offenders– Pretrial detention– Misdemeanor reform– Habitual-offender laws (“3 strikes”)

• Alternatives to incarceration• Re-entry services• Drug treatment

• Prevention• Smaller facilities• Promote home- and

community-based care• Individually-targeted• Aftercare• Evidence-based

More EffectiveLess Expensive

• Intervention arises due to crisis

• Overemphasis on incarceration

• Especially: Large facility

• One-size-fits-all• Inattention to

community/family connections

Less EffectiveMore Expensive

Similar Issues: MHMR, Juvenile Services, Long-Term Care…

Up Next: Education

• Distance Learning Technologies– Improve outcomes– Especially for current lower-performers– Will transform role of schools, need for and

use of facilities, nature of debate (e.g., vouchers, home-schooling)

– Lower cost

An Ounce of Prevention

• Government intervention usually post-hoc– Ideology– False economy

• We know better– Policing– Health care

Proactive = Cheaper

• Fall prevention• Dental checks for expecting mothers• Investment in chronic disease research

We Need More Research

• Early Childhood Ed reduces downstream costs

• What would reduce the costs of Early Childhood Ed?– Parenting Instruction?– Book Rx?– Get Parents a GED?– What’s the chicken/What’s the egg?

Talkin’ ’bout de-Regulation

• False dichotomy:– More regulation– Less regulation

• Best example (as usual):Policing

One Regulatory Taxonomy

15% Hostile compliers

30% Hesitant compliers

30% Clueless (‘inhabitants of the

parallel universe’)

15% Spontaneous compliers

10% Industry leaders

Cheaper Regulatory Strategies

• Performance Tier

• Compliance (instead of enforcement)

• Target bad actors

• Netherlands

• British Commonwealth

• WA State

• IRS• Wisconsin

Providing Some Backbone

Providing Some Backbone

“A few of the things we use the most are the ones we love the least, like Facebok, which according to ForeSee Results holds an approval rating close to that of the IRS.” BusinessWeek 8/16/10

Government as Backbone

• Post Office– Public Apps: Package services– Private Apps: Ad/coupon packages

• Public Employee Health Care Plans– Private apps on public background:

• FEHBP• Connecticut municipal pool• Health exchanges?

• A Counter-Intuitive: Public Pensions?

The Life Raft

• Cut services or raise taxes?

• Grandparents or grandchildren?

• Public vs. Private?• ROI

Questions?

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