Florida Workforce and the Budget Crisis of 2009

posted by Will Wilson

The Florida Legislature is considering cutting every state worker's salary by 5%. Let's put that in some context. In the 2008 Grading the States, here's what Governing wrote about Florida:

Florida spends little on its workforce as a whole, ranking last in the nation in per capita spending on state personnel. State training dollars as a percentage of total salary also are among the lowest in the country — 0.89 percent.

I've got an article coming out in Governing soon that examines the upsides and downsides of various types of personnel expenditure reductions--furloughs, pay cuts, layoffs, etc. -- that state and local governments have been using to weather their budget crises. There's an argument to be made that each type of reduction fits best for particular situations.

Given Florida's already low personnel spending and the fact that the state has been particularly hard hit by the housing downturn, which is likely putting even greater demand on state services, I'm stumped about which type of cut Florida would be best advised to make, if they have to make a workforce expense reduction. Of course, many in the state are arguing that they shouldn't be making that cut in the first place.

So Much for Performance Management

posted by Alan Greenblatt

Nancy Killefer, Obama's pick to serve as the federal government's first chief performance officer, is withdrawing from the administration.

More to come on this, sounds like.

Update: It was a "nanny tax" problem -- Killefer failed to pay taxes on her household help.

Apparently it's okay not to pay your own taxes, but it's still a no-no not to pay taxes on the help.

Federal Performance Czar: Same song, different verse?

posted by Jonathan Walters

Ah, a performance czar for the feds. What a concept.

That Barack Obama has appointed Nancy Killefer, a former treasury official under President Clinton and now an executive with the venerable management consulting firm of McKinsey and Co., as the federal government's first chief performance officer follows a seemingly inexorable pattern when it comes to newly elected chief executives.

Virtually every new mayor, governor or president since 1950 (or maybe 1850) has swept into office promising to banish waste and inefficiency from government through some sort of top-to-bottom overhaul of the enterprise over which they've just taken charge. Under Ronald Reagan it was the Grace Commission. Clinton-Gore "reinvented" government, an idea ripped off from Texas, which had "reinvented" itself under Governor George Bush. California Governor Arnold Schwarzenegger got into the act with his "blow-up-the-boxes" plan, which went nowhere.

Encyclopedias could be written about the phenomenon. So here we go again. Don't get me wrong. I'm not completely against these efforts, but too often they seem to assume that the concept is somehow completely new when in fact quality initiatives -- by some name or other -- have been bumping around government in some way, shape or form as long as we've had government.

Killefer, a veteran of good management practice and the federal government, is no doubt aware of this. Here's hoping she builds on existing initiatives and ideas -- all the while supporting those brave souls in the federal trenches who day in and out already are trying to do things smarter, better and more efficiently. I wish her luck.

(Mostly though, I wish she would buy 50,000 copies of my book, Measuring Up 2.0, and pass those around Washington, D.C. I swear it would help.)

Insurance Wars

posted by Alan Greenblatt

When the insurer AIG failed, at a cost to taxpayers thus far of $150 billion, a few federal lawmakers felt they knew just whom to blame: state regulators. "Clearly, some insurers have become too complex and too interconnected worldwide for the limited resources of state regulators to handle," four members of Congress wrote in the Wall Street Journal.

That assertion signals a reprise of one of the longest-running lobbying battles in Washington — over whether to create a federal charter that would give insurance companies the choice between state or federal oversight. "We believe that this will be on the table again," concedes Roger Sevigny, New Hampshire's insurance commissioner, who is not glad to see it back.

Insurance regulation has long been the sole province of states. This fall, state regulators were quick to assure Congress — correctly — that their oversight of AIG's actual insurance business had been sound. AIG failed because of its misplaced bets as a quasi-investment bank in the great housing bubble sweepstakes. "AIG's problems came from its parent company and from its non-insurance operations, which are not regulated by New York or any other state," Eric Dinallo, New York's insurance superintendent, told a congressional committee.

But that argument may not carry much weight at a time when the idea of plugging just such regulatory holes has come into fashion. Congress is in the mood for tighter and more consolidated regulation of financial services, and insurance won't escape the debate. When it's over, there almost certainly will be a new role for the feds, either directly overseeing the broader financial machinations of insurance companies or providing firm guidance to state regulators when it comes to the insurance business proper.

The National Association of Insurance Commissioners — made up of state officials who prefer the current system — is getting ready. The organization is moving more of its operations to Washington — not to lobby, it says, but to make industry data more easily accessible to Congress and the Treasury Department. One of the proposals that has been floating around Capitol Hill would create an Office of Insurance Information within Treasury — a role NAIC feels it can essentially fill all by itself.

Providing more information to the feds will be a welcome gesture. But in the current climate, when Washington wants to bring its own financial regulatory bodies into greater harmony, it's unlikely that 50 versions of state insurance control will remain politically viable.

A Budget Fix That Isn't

posted by Penelope Lemov

Thinking ahead? Thinking of saving money by converting the state or local defined benefit pension plan into a defined contribution plan -- one that wouldn't be so dependent on pension investment earnings and beholden to actuarially determined liabilities?

Not so fast, says Beth Almedia,executive director of the National Institute ono Retirement Security. Almedia has authored a new paper that says, in effect, you'd lose money by switching.

Here's her key point:

"States have found that abandoning a DB pension for a DC plan can actually increase costs, contrary to expectations. Mostly, this is because accounting regulations require pension obligations to be paid off sooner when a plan is frozen. It has a similar effect of refinancing from a 30-year mortgage to a 15-year mortgage, which drives up your payments. Yes, you pay off the mortgage sooner. But just as most households don't see this as a solution to their problems right now, state and local governments facing budget pressures won't find it helpful to be accelerating pension payments unnecessarily."

Bill Bratton's Reading List

posted by Zach Patton

Here in Austin for the Managing Performance conference, LAPD chief Bill Bratton made some amazing points about his efforts to apply a data-driven mindset to reducing crime in L.A. and, earlier, in New York City.

But he also talked more broadly about being an agent of change, and where he gets some inspiration for making a difference.  He mentioned a few of the most important articles and books he's read on the subject. Here are his favorites:

-- Tipping Point Leadership, a piece in the Harvard Business Review by Chan Kim and Renee Mauborgne.
-- The Tipping Point, by Malcolm Gladwell
-- Good to Great, by Jim Collins

Bill Bratton is a guy you want to emulate. Reading these books sounds like a pretty good place to start.

You can read Bratton's own words about his approach to reducing crime in New York City in the 90s in his book, The Turnaround: How America's Top Cop Reversed the Crime Epidemic.

Bratton's Brass Tacks

posted by Zach Patton

I mentioned LAPD chief Bill Bratton's successes at reducing crime in New York City in the 1990s and Los Angeles today. His success in New York are pretty well known -- in just 27 months on the job, he reduced the city's epic crime rates, which had been climbing for decades, by dramatic percentages. Felony crime was down 39 percent. Homicides had fallen 50 percent.

More importantly, Bratton engineered a full-scale shift within the NYPD about how police officers view their role. For years, they'd been seen as responders to crime -- the causes of crime were seen as completely out of their control.  They thought of themselves, in Bratton's words, as report-takers.

But Bratton helped the cops come to understand their integral role in preventing crime as well. It's that fundamental paradigm shift that has allowed the crime reductions Bratton oversaw in the early 1990s to continue to this day.

But I was even more impressed by some of the stats Bratton shared from Los Angeles, where he's been police chief since 2002.

In the six year's since Bratton took office:

--homicide is down 44 percent
--rapes are down 35 percent
--robberies are down 23 percent
--overall violent crime is down 49 percent
--gang homicides are down 57 percent
--overall gang crime is down 25 percent

If that's not proof that Bratton's data-based approach to reducing crime is an effective tool, then I don't know what is.

Bratton: "Measure What Matters"

posted by Zach Patton

Being at a state and local government convention in the midst of a huge federal election season is kind of funny. For one thing, as I keep hearing what great things leaders are doing at the state and local level -- and the nonpartisan, data-driven ways their achieving real results -- I keep thinking, "Why aren't the federal guys talking about this?"

Also, I keep thinking, "If I were a new president taking office in January, I'd want this person on my team."

That's certainly what I was thinking while listening to Bill Bratton. He's the current chief of the Los Angeles Police Department, and he served as the chief of police of New York City during the 1990s, where he engineered an historic turnaround to New York's decades-long rise in crime. (He also was named a Governing Public Official of the Year last November.)

He did it -- and he's doing it again now in L.A. -- by measuring information. His revolutionary CompStat program used real, hard data to reduce crime in New York. He focused on identifying where crime was occurring and then targeting resources to find out why and to find out how to eliminate the crime.

But the key, Bratton told officials in the audience, is to measure the right stuff.

"In government, we had a tendency to measure everything and drive everyone crazy with data, rather than measuring what matters," he said.

Bratton painted a pretty dire picture of the current state of the country. It's the first time in our nation's history, he said, that we've faced a generational economic crisis while also fighting a war. Crime, too, is beginning to come back in many of our nation's cities. "There's never been a more distressed time in our nation's history. The importance of measuring what matters is going to be even more critical. We have the capability now to really make improvements, and the reason we have that capability is because we have a way of measuring our success."

Preparing for the Worst

posted by Zach Patton

The theme of this year's Managing Performance conference is "Performance Under Pressure." There's probably no city government more equipped to talk about that topic right now than Minneapolis.

The city has received stellar marks for the way it handled last summer's collapse of the I-35 bridge. Minneapolis officials reacted swiftly and efficiently, with an expertly coordinated response on everything from emergency search-and-rescue to family counseling to handling the hundreds of local, national and international media outlets that descended on the scene.

It was, by all accounts, a nearly perfect response to an emergency. (Watch the city's video about its experience.)

Turns out? It was the result of years of preparation and training.

R.T. Rybak was elected mayor of Minneapolis in the immediate wake of 9/11. (He quite literally won the mayoral primary on Sept. 11, 2001.)  So when he came in to office and established his leadership team, emergency preparedness was a huge concern, as it was for cities across the country.

But while cities everywhere were concerned about their disaster preparedness and first-response capabilities, Rybak and his folks actually did something. 

In March 2002, Rybak led 60 city employees (plus 10 county employees and 10 state workers) to the National Emergency Training Center in Mount Weather, Virginia, for a Minneapolis-specific course.

Then, in July 2002 the city launched a five-year, $60 million investment in improving its emergency response capabilities. About $20 million of that was used to build an interoperable communications system for first responders. Other new initiatives included an emergency operations center, security cameras located throughout the city and -- most importantly -- an action plan for how to handle a catastrophe.

The initiative was completed July 31, 2007 -- one month before the bridge collapse.

Rybak: Partner-Citizens and the "Seventh Generation"

posted by Zach Patton

As I mentioned earlier, Minneapolis Mayor R.T. Rybak spoke this morning at Governing's Managing Performance conference in Austin. He had a lot of very interesting things to say -- especially about last year's I-35 bridge collapse, which I'll post about a bit later today.

But he also spoke about good government management concepts in general, and two of the ideas he talked about were especially interesting because they're so contrary -- so antithetical -- to most of what you hear about in local government today.

First, Rybak took apart the idea that government should treat citizens as customers. In an era when the prevailing wisdom is to treat government like a business, this almost sounds like heresy. But as Rybak said, treating your citizens like your customers ultimately shortchanges everyone.

"Our constituents are our partners. They're not customers," he said. "The whole notion of government reinvention throughout the 1990s and the early years of this decade was 'customer-focused' government. I understand why, and I think that's a great impulse. But talking about your citizens as customers completely misses the potential power of the partnership that can exist between government and the people."

As an example, Rybak mentioned Minneapolis' efforts to improve environmental awareness among citizens and to help get the city moving in a green direction. The customer-focused way would have been to hire a city environmental coordinator who would try to get the word out about what citizens should be doing to help the environment. Indeed, that was Rybak's own first impulse.

But what the city ended up doing instead -- the partner-focused solution -- was to take the money it would have spent on the environmental coordinator, and giving it to citizen groups in the form of microgrants from $1,000 to $10,000.

"We got some amazingly innovative things we never would have come up with on our own," Rybak said. Those small grants were used to fund programs like one group that went door-to-door distributing clotheslines, to help families cut down on their energy use. Another neighborhood organization used the money to teach immigrant women how to ride bicycles.

Rybak's other point about good government management was equally unconventional -- always be thinking about the "seventh generation."