As the nation stands poised to elect one of the largest classes of new governors, the National Governors Association Center for Best Practices (NGA Center) has conducted an analysis, State Government Redesign Efforts 2009 and 2010, of state actions to streamline and downsize government to meet the new economic reality facing states. The study cites Vermont several times, especially in regards to savings in corrections and state worker compensation.
"States such as Colorado, Virginia, Vermont and Washington have introduced graduated sentencing policies to help shrink the population of nonviolent offenders. For example, Vermont enacted legislation in 2010 that creates a home confinement alternative for certain nonviolent offenders who would otherwise have been sentenced to prison."
"Vermont’s government redesign initiative, Challenges for Change, recommended additional corrections reforms that could save the state as much as $7 million, including alternative sentencing options, such as home incarceration (24/7 at home) and home confinement. These sentencing policies allow offenders to participate in employment, treatment, and community service programs that could help return productive citizens to society."
"Vermont reached accord between the legislature, the state treasurer, and the state’s largest public employee union that will result in most teachers’ working additional years and making greater contributions to their pension fund but receiving a larger pension check on retirement. The state will initially save $15 million a year, or about 10 percent of Vermont’s current budget shortfall."
"Given the rising costs of benefits, states are moving to address future state retiree costs. Thirteen states made cuts to state employee benefits in 2009 and 2010, and at least 18 reformed some aspect of their pension systems, including reducing benefits for future employees.97 States such as Arizona, Colorado, Iowa, Minnesota, Mississippi, Montana, New York, Pennsylvania, Vermont, and Wyoming increased contribution rates to the state retirement system for all or some current employees."
"Arizona, Illinois, Missouri, New York, and Pennsylvania have raised the requirements for current employees to retire. In Illinois and Missouri the retirement age is now 67. Vermont raised its retirement age from 62 to 65; employees may also retire if their age and their years of experience total 90."
Said John Thomasian, director of the NGA Center, ‘State budgets have not yet recovered from the Great Recession. In fact, total state revenues probably will not return to pre-recession levels until sometime around 2013. As a result, governors have had to pursue long-term structural solutions, rather than just short-term strategies, to cut costs and make state governments more efficient.’
‘The problem isn’t over. Governors coming into office following the November elections will face continued challenges and will need to devote a large share of their agenda to additional redesigning and streamlining efforts,’ continued Thomasian. ‘It will take extraordinary leadership on the part of new governors to take the necessary ‘ and often difficult ‘ steps to create a smaller, leaner government, but much can be learned from the actions governors already have taken over the last two years, many of which are highlighted in this brief.’
The redesign efforts highlighted in the brief fall into seven broad categories: corrections; K-12 education; higher education; employee costs; shared services and agency consolidation; privatization and asset sales; and tax expenditures:
· Corrections ‘ Many states have found that the best opportunity for savings in this area is to stop building or even close prisons. To do so, states have moved forward with efforts to safely reduce prison populations of non-violent offenders through sentencing reform, improved re-entry programs, and enhanced community parole and probation oversight.
· K- 12 Education ‘ Governors have tried not to reduce funding for K-12 education, and worked instead to urge greater efficiency with existing resources. Recent efforts include policies to encourage district consolidation, changes that increase class size, and cuts to non-core programs.
· Higher Education ‘ States are making funding cuts while urging their university systems to become more efficient and improve the percentage of student graduates. Many states are beginning to employ the use of performance funding that rewards institutions for degree attainment instead of just enrollment and requiring colleges to produce more measures on degree completion and value to the student.
· Employee Costs ‘ States have put in place furloughs, layoffs, and other adjustments, but also realize that long-term solutions are necessary. At least 18 states reformed some aspect of their pension systems to reduce future costs during 2009-2010, including reducing benefits for future employees.
· Shared Services and Agency Consolidation ‘ States are consolidating agencies and sharing services across departments and, in some cases, eliminating programs and entities that are non-essential.
· Privatization and Asset Sales ‘ States are increasingly looking toward privatization and asset sales to raise cash and keep unnecessary, ongoing expenses off state books for good. Recent actions taken or considered include privatizing state-run liquor stores and selling unneeded state property.
· Tax Expenditures ‘ Many states have looked at ways to recover revenues foregone by eliminating tax expenditures that do not produce jobs or improve the state’s economy.
For more information on the fiscal conditions of states and state redesign efforts, visit the NGA State Fiscal Information page or the NGA Redesigning State Government page. An update to the fiscal information will be released in December.
Source: NGA. 10.18.2010. Founded in 1908, the National Governors Association (NGA) is the collective voice of the nation’s governors and one of Washington, D.C.’s most respected public policy organizations. Its members are the governors of the 50 states, three territories and two commonwealths. NGA provides governors and their senior staff members with services that range from representing states on Capitol Hill and before the Administration on key federal issues to developing and implementing innovative solutions to public policy challenges through the NGA Center for Best Practices. For more information, visit www.nga.org.