Sunday, March 22, 2009

Jack on Jack: Across-the-board cuts, or borrowing Ruth Ann's axe

Jack Markell campaigning to become governor (when he knew the budget deficit was already $210 million and climbing rapidly):

In tough budget times, the typical response is to pull out the axe and implement across-the-board cuts. With this approach, agencies operating efficiently and with fewer resources may be harder hit than those that have accumulated inefficient programs and resources over time. The result is a disincentive for any program to operate efficiently as a buffer against across-the-board cuts. Yet the Minner-Carney Administration still uses across-the-board percentage cuts – the equivalent of using an axe when you should use a scalpel....

That’s why, as Governor, I will implement a statewide performance review to evaluate long funded projects for their true effectiveness. Resources associated with outdated and poorly performing programs will be re-directed to higher priorities. I will ask state employees to focus on areas where they know there is waste....

The performance review will identify specifically where inefficiencies exist and create meaningful, lasting savings by figuring out whether or not programs should continue to exist....

From my own extensive private sector experience with cutting costs, I know that the best answers come not from the top down, but rather from engaging the people actually doing the work. State employees know how the state can improve its service and cut unneeded costs – if only we ask them....

By involving public employees from the beginning, we can overcome the fear of change that so often stymies meaningful transformation....

Cobbling together across-the-board cuts to address the budget shortfall isn’t the right strategy. We need new ideas...


Jack Markell as Governor:

Almost 46% of our costs go to pay our state employees. Our teachers, our social workers, our State Police, our nurses … public servants of every stripe.

We have no choice but to ensure that government will be smaller by 2011. By keeping our hiring freeze in effect and by reducing the size of government through retirements and attrition, we will meet that goal and save several million dollars each year.

But that is not enough. To meet the challenge before us, we must reduce the total cost of our state workforce and we must do so now.

Businesses and other governments around the country are laying off thousands of employees each week and given our revenue shortfall, we, too, had to consider layoffs.

We recognized that the demand for state services was going up at the same time we had to consider letting people go. We recognized that laying people off could create additional financial obligations in the form of unemployment benefits.

But most importantly, we heard over and over from state employees that they would prefer a shared sacrifice where everyone gives up something instead of some giving up everything.

So we decided for now to focus on the area of shared sacrifice.

To that end, we are proposing a temporary 8% across the board cut in the salaries of all state employees, which will save us $91M in fiscal year 2010....

This decision, while difficult, keeps our public servants employed and our core commitments met without adding to our unemployment rolls.


Some notes:

1) The purpose of government is not to keep employees in their jobs; it is to deliver specific services as efficiently as possible.

2) No where has Governor Markell yet committed to a definition of temporary.

3) It's fascinating to note that Governor Markell clearly does not think unionized workers outside the State system should share the pain, since there is no freeze on any parts of the capital construction budget or move to eliminate the prevailing wage requirement on State contracts.

But you're probably tired of hearing all this.

After all, the announcement was made last week, the Final Four is coming up, and everybody knows Jack is a good guy.

6 comments:

Mark H said...

So another interesting question. For all of the State workers who participate in the Deferred Comp plan, the IRS regs don't allow for withdraw without something happening outside of my control. Guess this should qualify :). IF things pass the way they are, might be tapping that to pay the mortgage before we're all done.

Nancy Willing said...

Thanks for clearing up what I was wondering. From below:

"I remember, I think, Jack disclaiming Minner's across-the-board budget cut recommendations because of the clumsy way that hurts sections of government supported programming that should be spared."

No hat tip ?

Steve Newton said...

Nancy
Re: h/t; my fault; I just missed it.

Anonymous said...

But you're probably tired of hearing all this.

This is the first thing you've got right on the subject.

Steve Newton said...

Anonymous:

Then here's a suggestion: stop reading.

Shirley Vandever said...

In tough budget times, the typical response is to pull out the axe and implement across-the-board cuts. With this approach, agencies operating efficiently and with fewer resources may be harder hit than those that have accumulated inefficient programs and resources over time.

I distinctly remember Markell saying this during the campaign. It was on WDEL and I heard it on the way to work. I remember thinking, "That's smart". It was a big part of the reason I voted for him.

What the heck happened?