Capitol Buzzing about Sustainable Spending

Is it really possible to improve state services, make the budget more sustainable, and reduce the need for more tax increases?

Yes, says the chief researcher for the Connecticut Institute for the 21^st Century, a leading think tank on public spending.  

And Brian Renstrom, who is also a partner at BlumShapiro, discussed how this week with a bipartisan group of lawmakers on the eve of deadlines for a new two-year state tax and spending package that has to fill a more than billion-dollar gap.

Renstrom outlined reforms that will help make state government more effective, efficient, and affordable—actions that help people, are the right thing to do, and have short- and long-term positive impacts in effect and savings.  

“It’s refreshing to hear a presentation with such candor,” said State Rep. Jonathan Steinberg (D-Westport), member of the Finance Committee.

He added that the current state budget “paradigm is not working for us,” and urged lawmakers to continue exploring budget reforms.

“It’s a beginning,” said Rep. Mary Mushinsky (D-Wallingford), also member of the Finance Committee, who organized the event.

“We will need legislators, the Governor, agencies, and OPM to be engaged to ensure accountability and that the state is running as efficiently as possible.”

Renstrom outlined several big-ticket areas of spending in the state budget that could benefit from reforms.

Long-term care

Connecticut’s aging population will mean a growing strain on the state’s healthcare system. Transitioning more people out of long-term institutional care and into home-based care can save on spending and give people the care they prefer.

According to Renstrom, transitioning 5,200 people could save the state an estimated $218 million per year.

Corrections

Moving nonviolent offenders out of prison, better prepare them for productive lives, and reduce their chances of going back is more effective and less costly than putting people behind bars.

Renstrom said the state should set a target of reducing the incarcerated population by 50% by 2020, which would save an annual $240 million.

Local governments

Working together on a regional basis to share more programs can save taxpayer local and state tax dollars and provide better services.

Creating regional centers of excellence to leverage currently available resources and better serve cities and towns could yield state savings of $200 million per year, says Renstrom.

Social services

Using more of Connecticut’s outstanding nonprofit providers—who exist to address numerous specific needs–to deliver social services can improve service quality and save tax dollars.

Renstrom says we should move away from the philosophy of having the state be the manager and provider of services. It makes more sense for nonprofit agencies do more of what they do best.

State Pensions/Overtime

Many changes could and should be made to eliminate fraud and abuse in the system, said Renstrom. For example, we need to do a better job of managing overtime.   

Overtime is a serious issue throughout state government, said Rep. Melissa Ziobron (R-East Haddam).

She said it is “shocking” that overtime is budgeted at about $250 million in total and $70 million in the Department of Corrections alone, in the 2015 budget.

Technology

Better and more coordinated information technology systems can increase the effectiveness and efficiency of state government.

Among other things, says Renstrom, we need to put state government in the cloud and use excellent third-party technology services for IT. This would allow the state to eliminate the State Data Center by 2020, and help government not have to be in the IT business.

Streamline state government

In addition to those specific areas of state spending, Connecticut can save millions more in general by using innovative Lean techniques to make state government as efficient and effective as possible.

Some state agencies—include DEEP, and the Department of Administrative Services—have shown great results by implementing Lean.

Connecticut businesses embrace Lean because they have to work as economically and as smart as possible to be able to compete in this high cost state.

Measure results

As well intentioned as all programs and services are, there still has to be a way to determine if they’re accomplishing their goals and doing so in an affordable way.

Renstrom suggested starting by creating ways to measure all programs of $1 million and more annually, starting with the biggest. And then we have to change or eliminate those that don’t work; and eliminate the use overtime wherever possible.

Rep. Diana Urban (D-North Stonington) said she has noticed “pushback” from state agencies on efforts to implement results based accountability and other efficiency measures.

More exposure

“The CT21 studies and comments from the legislators show that we just can’t be doing the same old things the same way,” says Pete Gioia, CBIA economist. “We have to try new ways of delivering services.”

Lawmakers agreed that these ideas need more exposure to legislators and administration.

Connecticut must rein in state spending to what taxpayers can afford, and ensure the delivery of the best quality services possible.

For more information, contact CBIA’s Louise DiCocco at 860 244.1169 or louise.dicocco@cbia.com; or Bonnie Stewart at 860.244.1925 | bonnie.stewart@cbia.com | @CBIAbonnie