Posted tagged ‘John O’Leary’

5 Great Cost Saving Ideas

February 15, 2010

John O’Leary has an interesting article titled 5 Great Cost Saving Ideas. O’Leary is a research fellow at the Ash Institute of the Harvard Kennedy School and executive editor of the Ash Institute’s Better, Faster, Cheaper Web site. He is also a co-author of If We Can Put a Man on the Moon: Getting Big Things Done in Government, published by the Harvard Business School Press.

O’Leary starts off his article with the following observation:

In the good old days, economic slumps were followed by recoveries. To survive lean times, governments tightened their belts, maybe raised some taxes and waited until the economy bounced back.

Not this time. Crisis is the new normal.

Tax hikes simply won’t get governments through this one. Neither the economy or the electorate will allow for much in the way of tax increases, not after states collectively enacted $23 billion in tax hikes in 2009.

So what’s the answer? Transformation. A deep and abiding commitment to government that is better, faster and cheaper. This means rethinking mission; focusing on core functions; and embracing a set of tools, technologies and organizational approaches dedicated to delivering true public value efficiently.

Some folks, apparently, still haven’t gotten the memo. Here are five “innovations” that have a proven track record, but still aren’t being used everywhere. In 2010, there just isn’t any excuse for it.

O’Leary’s 5 great cost saving ideas are:

1) 311 Call Systems The art and practice of installing a centralized 311 call number to track requests for public services is well established. This not only boosts service quality, it also provides important data for public managers, helping them learn where they need to improve.

2) Plastic Cards For Benefit Delivery – Roughly 30 states now use plastic benefit cards to disburse unemployment insurance payments, saving on check printing, postage and staff costs.

3) Economic Development Clawbacks – You know the story. The big company promises to bring a bunch of jobs to the region in exchange for a whopping tax break. The tax break goes into effect, but the jobs never materialize. The idea of using tax abatements is questionable to begin with, since other taxpayers will have to pick up the slack. But here’s a no brainer: If you offer a company a tax break, they ought to keep their end of the bargain. A “clawback” provision or other guarantee that the promised jobs will actually appear should be standard practice.

4) Embracing Competitive Service Delivery – In the early 1990s, Massachusetts Governor Bill Weld took a page from theReinventing Government playbook and used outsourcing to reduce the cost of service delivery. Weld issued 36 contracts, saving taxpayers an estimated $273 million. Public employees objected, and in response the Legislature passed a law creating an onerous process such that since its adoption in 1993, only six contracts have been approved. Contracting out won’t always be the right answer, but it should be a tool in every public official’s toolbox. If there has ever been a time when government cannot afford to ignore competition as a spur to productivity, this is it.

5) Shedding Non-Essential Assets –California, the state with a $20 billion budget deficit, owns a lot of stuff, including golf courses, the Los Angeles Coliseum and an $11-million Malibu beach house once used to film an MTV series. It’s time for the Golden State to join the real world. Every state and municipality that owns a golf course, museum or abandoned property should consider these spaces an excellent site for a “for sale” sign.

While the above ideas are focused on the state level, similar steps can be taken at the local level as well. Taxpayers are looking for elected officials that have ideas besides raising taxes to address the cost of government. The five ideas above have worked elsewhere and are a good starting place for an elected official or community leader looking to make a difference.

What do you think of these cost saving ideas?