Tom Barrett’s Plan for

Putting Madison on a Diet

www.BarrettForWisconsin.com Authorized and paid for by Barrett for Wisconsin, Catherine Shaw, Treasurer.

Overview
The road to fiscal responsibility and budgetary solvency starts with controlling and reducing state government spending – Putting Madison on a Diet. Over the past twenty-five years, Democrats and Republicans alike have raided funds, used budget gimmicks and relied on accounting tricks to balance Wisconsin’s budgets – all the while kicking responsibility for tough choices down the road. While he doesn’t have access to all of the details and projections of the state budget, Tom does have a specific plan for cutting waste, reducing bureaucracy, fighting fraud, and improving efficiency. In addition to identifying hundreds of millions of dollars in specific cuts, Tom will also implement a top-to-bottom performance review of all major state operations. As demonstrated in several other states, these efforts have yielded hundreds of millions in spending reductions. Tom’s plan to Put Madison on a Diet is projected to produce at least $1.127 billion in savings for the taxpayers of Wisconsin. And Tom’s plan includes significant reforms in the way Madison works – changes that will make state government more responsible, accountable, transparent and responsive to the people of Wisconsin. He has done it before. As mayor of Milwaukee, Tom: • • • • • • Cut $32 million in spending in the last year alone to balance an unexpected budget shortfall caused by the national economic crisis. Reduced the general City workforce by more than 400 during his time in office. Kept City of Milwaukee’s total expenditures 5.3% lower than the average of comparablysized U.S. cities. Introduced 286-CITY to give people a direct, immediate line to services and information. Reduced Department of Public Works Vehicle Fleet by more than 100 pieces of equipment. Budgeted responsibly, leading major financial analyst Fitch Ratings to report, ‘The city continues to demonstrate conservative financial management.’ Fitch also ‘praises city leaders for making budget cuts…’ (Milwaukee Magazine, ‘NewsBuzz,’ 6/4/10).

Tom believes we need a governor with real and specific solutions to the problems that face us, not gimmicks or meaningless bumper sticker slogans. The people of Wisconsin expect elected officials to offer honest plans and straight talk, and this is exactly the adult leadership Tom will provide as Governor. Tom has already proposed a comprehensive plan to create jobs and get Wisconsin working – now he has a plan to Put Madison on a Diet.

www.BarrettForWisconsin.com Authorized and paid for by Barrett for Wisconsin, Catherine Shaw, Treasurer.

2

TABLE OF CONTENTS
I. Cutting Waste .................................................................................................................. 4 II. Eliminating Unneeded Bureaucracy............................................................................... 9 III. Improving Efficiency .................................................................................................. 12 IV. Fighting Fraud ............................................................................................................ 15 V. Top-to-Bottom Performance Review of all State Government Operations................. 18 VI. Reforming the Budget Process ................................................................................... 20 VII. Making Madison Work ............................................................................................. 22

www.BarrettForWisconsin.com Authorized and paid for by Barrett for Wisconsin, Catherine Shaw, Treasurer.

3

I. CUTTING WASTE

“As Governor, Tom will streamline programs, impose targeted cuts, and institute cost-saving measures that will make our budget smarter and get us back on track.”

www.BarrettForWisconsin.com Authorized and paid for by Barrett for Wisconsin, Catherine Shaw, Treasurer.

4

As Governor, Tom will streamline programs, impose targeted cuts, and institute cost-saving measures that will make our budget smarter and get us back on track. Health Care Costs Rising health care costs hit state taxpayers hard because, as the employer of approximately 60,000 civil servants, the State of Wisconsin is the largest purchaser of health insurance in Wisconsin. State government’s second-biggest program, Medicaid, also has seen an unprecedented increase in the growth of the BadgerCare Plus program for low-income families. As Governor, Tom Barrett will control state government health care costs with by Working to Combine State and Local Government Employees’ Purchasing Power Statewide. The State Employee Health Plan does a good job of buying health insurance at a reasonable price in Dane County, where the state’s “purchasing pool” accounts for over 20% of all county residents not enrolled in BadgerCare Plus or Medicare, and where the state can therefore exert competitive pressure on the region’s HMOs. The State Employee Health Plan in Dane County has held down health insurance premiums far below the prices that Wisconsin pays for its employees in the state's other 71 counties, where it does not have large enough purchasing pools to push down costs. In 2009, Dane County state employees had annual HMO premiums that averaged nearly $1,200 less for individuals and nearly $3,000 less for families than those employees in the state's other counties. To control healthcare costs state-wide Tom will: o Combine the health insurance purchasing power of state government, vocational/technical districts, municipal governments, and county governments, and use that combined buying power to leverage HMOs and other insurance companies to lower their costs and improve their quality of care across the state. A purchasing pool this large would be too big for HMOs and other insurers to ignore. Require state employees to use their own money if they want to purchase more expensive plans – not to make them pay more, but to give incentives to the HMOs and other insurers to further lower their premiums.

o

State costs would go down because the Wisconsin State Employee Health Plan would have lower rates in all counties and municipalities. Estimated annual savings: $339

million.1

Giving BadgerCare Plus Enrollees an Incentive to Select Low-Cost Plans. Now most BadgerCare enrollees get to choose among competing HMOs, but have no incentive to select a lower-cost HMO. By giving BadgerCare enrollees a clear, strong economic incentive to enroll in lower-cost plans -- such as charging higher monthly premiums

for BadgerCare Plus enrollees to select a more costly plan and lower premiums for less costly ones – the state gives the HMOs a reason to lower their prices. Estimated annual savings: $200 million.2
www.BarrettForWisconsin.com Authorized and paid for by Barrett for Wisconsin, Catherine Shaw, Treasurer.

5

Reviewing state health insurance policies for overcharges. Some states have been able to reduce health care costs by between two percent and 10 percent by conducting an audit of enrollees and identifying ineligible dependents. Estimated annual savings: $6.9 million.3 Ensuring state employee health insurance covers only those eligible. Based on evidence from other states, Wisconsin may be providing health insurance for ineligible individuals who are inappropriately claimed as dependents. Estimated annual savings: $3.0 to $18.2 million.4 Including incentives/programs that result in lifestyle changes by patients that reduce costs, such as increasing patient co-pays related to the use of emergency rooms for nonemergency care. Estimated annual savings: $13.9 million.5 Designing plans to treat patients in the lowest-cost appropriate care environment. One example is “medical homes” in primary health care settings; this model engages the individual, family, and physician in an approach that goes beyond medical care alone and could include other services such as social services, drug and alcohol treatment, housing, or any other “human services” beyond health care. We should also expand federally qualified health clinics (FQHCs), primary care centers, and urgent care centers to give people smaller-scale, lower-cost, neighborhood-based options. Promoting home and community-based care to reduce long-term health care costs. It is well known that nearly all seniors and adults with disabilities want to remain in their homes as long as possible, and it’s vastly cheaper for states to provide the help – meals, bathing and dressing, and other home services – that allows them to do so rather than resort to institutionalization. A Connecticut study found that on average, Medicaid dollars can support more than two older people and adults with physical disabilities in a home and community-based setting for every person in an institutional setting.6 Reducing Medical Mistakes. States and the federal government are developing tracking and monitoring systems to identify avoidable mistakes, such as issuing the wrong medication, patients developing hospital infections, and performing the wrong surgery. These mistakes add significantly to the cost of health care. In fact, the Centers for Medicare and Medicaid – the federal agency that governs those programs – has stopped paying Medicare providers for preventable medical mistakes. Many states are following suit in their Medicaid programs and private insurers are also beginning to establish such rules. Another way to do this is to encourage providers to use e-prescribing, electronic medical records, and other information technologies. Emerging technologies can reduce the incidence of human errors, as well as duplication and inefficiencies, and increase convenience.

www.BarrettForWisconsin.com Authorized and paid for by Barrett for Wisconsin, Catherine Shaw, Treasurer.

6

Corrections Last year, Wisconsin spent 6.7% of its General Fund on Corrections. In comparison, Minnesota spent 2.7%.7 The Pew Center on the States found that in 1987, Wisconsin spent 20 cents on Corrections for every $1 spent on Higher Education. However, by 2007, that figure had grown so that Wisconsin was spending 73 cents on Corrections for each dollar spent on Higher Education. 8 State spending on corrections has gone from $130 million in the mid 1980’s to $1.1 billion in 2009.9 We need to get a handle on spiraling corrections costs while still keeping Wisconsin residents safe. Tom believes, very simply, that we shouldn’t be spending so much to house criminals when law-abiding families are having trouble paying to house themselves. As Governor, Tom will: • Cut Prison Health Care Costs. One way to cut costs is simply by reducing spending for inmate medical services, which are notoriously inefficient – not to mention outrageous. Taxpayers having trouble paying their own health insurance shouldn’t be paying for Cadillac coverage for criminals. We should eliminate elective procedures – such as sex-change operations – consolidate services, reduce the number of contracts, improve efficiency, and cut costs. Through better use of telemedicine, managed competition, preventive care, and maximizing federal reimbursements, we should be able to trim these costs by at least 10%. At a current total cost of approximately $95 million a year, this effort would produce estimated annual savings of $9.5 million. Use Community Corrections and Alternative Sentencing when safe and smart. Using proven risk-assessment methods and evidence-based supervision programs such as those that have proved effective in states like Texas and Arizona, Wisconsin can use tough penal strategies that cost far less than incarceration while ensuring public safety and decreasing crime and recidivism. Estimated annual savings: at least $58.2 million.10

Financial Administration It’s time to reform the state contracting process, and the first step Tom Barrett will take as Governor will be to control overpriced contracts. He will: • Authorize state agencies to increase the use of electronic payments and receipts to reduce costs and increase efficiency. Require all contract managers to attend accountability in state contracting training.

www.BarrettForWisconsin.com Authorized and paid for by Barrett for Wisconsin, Catherine Shaw, Treasurer.

7

Establish procedures for state agencies to ensure contract services are rendered in accordance with contract provisions prior to invoicing for payment. Require an analysis to ensure that non-competitive procurements are reflective of fair market value. Require that agreements with grantees of state and federally funded grants include clear statements of work and deliverables. Renegotiate price reductions in state contracts given the slow economy.11 Put details of state contracts online in a searchable database, including specifically whether the contract was awarded through a no-bid, sole source, or competitive process.   Invest in contract management and implement performance-based contracting, detailing specific deliverables, and assessing outcomes to ensure that the state gets what it’s paying for.12 Enforce Preferred Pricing Clauses in state contracts, which require vendors to provide the state with the lowest price for the goods and services throughout the life of the contract, regardless of initial contract price.13

• •

All told, these reforms will produce estimated annual savings of $76.8 million.14 Schools and Local Government If anyone in Wisconsin appreciates the importance of well-run schools and local governments, it is Tom. But he knows that better doesn’t necessarily mean more – with 10,000 units of local government, Wisconsin could use less. And better doesn’t necessarily mean more money – it means making the best use of the resources we have. That’s what Tom has done as mayor – and it’s what he will help our schools and local governments do as Governor, by: • Rewarding local governments that merge and cost-share services. Many local governments could consolidate some of the services they provide –from payroll and purchasing functions to maintenance and public works – to reduce duplication and overlap to save taxpayer money. Tom will reward those who do it with incentives. Reducing K-12 textbook costs – without limiting textbooks. Publishers are currently required to provide a hardcopy of proposed textbooks to teachers for their review, resulting in the printing and delivery of thousands of books each year. In Florida, for example, from the 1995-96 school year to the upcoming school year, the cost of textbooks has almost tripled – from $91 million to $267 million.15 By moving to digital samples, publishers may be willing to provide discounted textbooks. Additionally, publishers provide “free materials” to teachers when textbooks are adopted – but nothing is ever really free: the cost of these materials gets built into the textbook prices. To address these costs, Wisconsin will set up guidelines to restrict free samples and materials. Estimated annual savings: $9.7 million.16

www.BarrettForWisconsin.com Authorized and paid for by Barrett for Wisconsin, Catherine Shaw, Treasurer.

8

II. ELIMINATING UNNEEDED BUREAUCRACY

“Tom recognizes that the current economic crisis provides an ideal opportunity to stand back and reconsider how we can use our limited resources most effectively by keeping what’s essential, combining programs with duplicative functions, and cutting programs that are no longer necessary.”

www.BarrettForWisconsin.com Authorized and paid for by Barrett for Wisconsin, Catherine Shaw, Treasurer.

9

Tom recognizes that the current economic crisis provides an ideal opportunity to stand back and reconsider how we can use our limited resources most effectively by keeping what’s essential, combining programs with duplicative functions, and cutting programs that are no longer necessary. To create an on-going mechanism for such program evaluation, Tom will implement a comprehensive Sunset Review system, where all regulatory programs, commissions, and boards undergo full sunset review on a 10-year cycle. Sunset reviews provide the opportunity to evaluate whether the agency is still accomplishing the tasks it was created for and provides an effective accountability tool for making sure agencies are consistently responsible to taxpayers and policymakers. In fact, the Texas Sunset Review Commission realizes a $37 return for every dollar spent on the sunset review process.17 Meanwhile, the state’s organizational chart is a tangled, out-dated web with agencies and commissions having overlapping goals, missions, and client populations. Real efficiencies could be found by eliminating some of these agencies and commissions, as well as combining or delegating their functions. As Governor, Tom will: • Eliminate the offices of Secretary of State and State Treasurer. These two offices have outgrown their usefulness and can be combined, with some duties performed by the Lt. Governor or another state agency. Estimated annual savings: more than $1 million. Eliminate boards and commissions with no statutory duties. Many of the over 200 boards and commissions are outdated and perform duplicative duties and should be eliminated to save money and reduce bureaucracy. Appointments to these bodies may be “plums” for friends of politicians, but Wisconsin can no longer afford to do business the same old way. Consolidate environmental and consumer protection functions. Currently, elements of this function are spread among the Department of Agriculture, Trade, and Consumer Protection, the Department of Natural Resources and the Department of Commerce. We can add certainty and promote efficiency by housing each of these functions in its own location. Consolidate economic development activities. As Tom has highlighted in his comprehensive plan to create jobs and get Wisconsin working, economic development functions are scattered in various agencies like the Department of Commerce, Natural Resources, the Department of Agriculture, Trade, and Consumer Protection, and the Department of Tourism. This fractured effort doesn’t help create more jobs in Wisconsin and makes things difficult for companies that want to grow or relocate to Wisconsin. We can do better. Reorganize programs within the Department of Administration. Currently, the Department – which is supposed to help conduct the administrative business of government – also administers programs such as the Statewide Low Income Household Energy Program. These programs will function better and more efficiently in a different area of state government.

Finally, Tom will ‘right-size’ the state work force. We need to create a state employee workforce plan to mitigate the impact of a large number of retiring workers that we can expect
www.BarrettForWisconsin.com Authorized and paid for by Barrett for Wisconsin, Catherine Shaw, Treasurer.

10

over the next decade. The state already reviews positions as they become vacant and has been working to reduce staffing costs by “right sizing” and reducing middle management. However, a more proactive approach would include introducing technologies and revising processes to lessen the need for replacement employees, with an explicit requirement to limit the use of higher priced contractors. By increasing efficiency through improved use of technology and reengineering business processes, we can achieve a significant decrease in the rate at which the state replaces retiring employees. Estimated annual savings: $34 million.18

www.BarrettForWisconsin.com Authorized and paid for by Barrett for Wisconsin, Catherine Shaw, Treasurer.

11

III. IMPROVING EFFICIENCY

“Wisconsin state government could save millions of dollars simply by moving into the 21st Century – improving the state’s Information Technology (IT) systems management, adopting new technologies, and implementing new applications that not only save time but also reduce waste of energy, paper, and other resources. As Governor, Tom Barrett will modernize state government and make it more efficient.”

www.BarrettForWisconsin.com Authorized and paid for by Barrett for Wisconsin, Catherine Shaw, Treasurer.

12

Wisconsin state government could save millions of dollars simply by moving into the 21st Century – improving the state’s Information Technology (IT) systems management, adopting new technologies, and implementing new applications that not only save time but also reduce waste of energy, paper, and other resources. As Governor, Tom will modernize state government and make it more efficient by: • Consolidating IT service and maintenance agreements. By consolidating “extended warranties,” the state can save money because covering all equipment under one agreement allows service providers to reduce prices due to economies of scale. Estimated annual savings: $61.6 million. Investing in Voice over Internet Protocol (VoIP). This low-cost technology allows users to make telephone calls via a broadband Internet connection instead of a regular (or analog) phone line. Estimated annual savings: $28.3 million.19 Moving to Thin Client technology. Michigan recently changed 27,000 state employees over to Thin Client Technology – which replaces normal PCs with cheaper devices relying on remote processing capacity – and is saving between $3 million and $5 million within its first year of operation. For a state Wisconsin’s size, that would provide estimated annual savings of $2.1 million. Increasing e-payments and e-receipts. The state issues payments for a myriad of things: payroll and retirement benefits, unemployment compensation payments, child support payments collected on behalf of custodial parents, and payments to vendors for goods and services. Issuing electronic payments is less expensive than cutting paper checks because it saves the state the cost of check printing, check stock, and postage. Estimated annual savings: $14 million.20 Likewise, processing electronic payments to the state is much more cost effective than processing paper checks. However, Wisconsin often charges users more to make electronic payments. We need to charge less for electronic payments to the state in order to encourage more people to pay on-line. Estimated annual savings: $1 million. 21 Utilizing a web-based, statewide, integrated payroll time management system. According to industry experts, in most instances, overtime can be reduced by at least two or three percent through the use of an advanced, integrated scheduling system. Such a system will also reduce costly payroll errors. Estimated annual savings: $1.4 million.22 Providing incentives for e-filing state tax returns. Processing paper tax returns is more costly to the state than processing those filed electronically – and it wastes paper, too! To offset the cost of processing paper returns and encourage more e-filing, Tom will provide incentives to file tax returns electronically. Estimated annual savings: $4.8 million to $9.7 million.23 Expanding the state’s electronic government programs, including government-tobusiness systems such as online professional licensing, online competitive bid processing, e-procurement expansion to benefit small business and access multiple departments involved in procurement, environmental regulation of business; and interactive employer/employee job posting and recruitment.

www.BarrettForWisconsin.com Authorized and paid for by Barrett for Wisconsin, Catherine Shaw, Treasurer.

13

Reducing paper use and going “paperless.” There’s a reason state employees are sometimes referred to as paper pushers – government sometimes seems to run on the stuff. However, in our increasingly electronic world, more information is shared through email and file sharing, research is conducted and records kept electronically, information is provided to consumers on-line, and transactions are processed there as well. As Governor, Tom will require all agencies to examine their processes to look for ways to “go paperless” – or at least move to “paper on demand.” As a result, there should be less of a need for paper and the equipment that generates and processes it, such as printers, faxes, and scanners. Specific savings can be found reducing copier and printer lease expenditures, paper and ink purchasing, and mailing and printing costs. Cost can further be reduced by consolidating and/or outsourcing mailrooms and print facilities. Estimated annual savings: $2.8 million. Cutting down on energy consumption and waste. Alabama is reducing state building energy usage by 10% and saving roughly $5 million per year in doing so. We could be doing the same in Wisconsin and boost Wisconsin business at the same time. For instance, by setting energy efficiency goals, state facilities managers will purchase energy efficient equipment, weatherization materials, and other services – all of which can be produced from in-state companies. We’ll be improving our environment, reducing the cost of government, and producing Wisconsin jobs. Estimated annual savings: $44 million. Reducing computer energy use. Another way Wisconsin can save energy is by targeting personal computers. The state uses many, many personal computers, and therefore runs the risk on energy waste when computers are left on unnecessarily. Power management solutions have been implemented in many states that allow for automatic computer shut off of either individual computers or network-wide. Estimated annual savings: $1.9 million.24 Preparing cost/benefit analysis of four day work weeks in select agencies. By providing non-essential state services four days a week (10 hours a day), instead of five days a week (eight hours a day), state offices would be closed Fridays, reducing heating and cooling costs, electrical and janitorial costs, and commuter traffic, with estimated annual savings: $16.2 million.25 Promoting other green initiatives. As Governor, Tom will institute these additional initiatives to protect our natural environment and save the state money, including: o Retrofitting existing state buildings with high efficiency lighting equipment, high efficiency cooling and heating equipment, and new more efficient windows and requiring them to meet stringent energy efficiency standards. o Buying only the most fuel efficient vehicles for the state fleet and purchasing home grown fuels whenever possible. o Encouraging the redevelopment of Brownfields sites for re-use as office parks when they are located in areas that are already connected to water, electricity and roads. o Co-locating state and local services in downtown areas that are well served by mass transit and bus lines. o Better coordinating the state’s own planning across agency lines, so all state government agencies are implementing these ideas at the same time.
www.BarrettForWisconsin.com Authorized and paid for by Barrett for Wisconsin, Catherine Shaw, Treasurer.

14

IV. FIGHTING FRAUD

“As Governor, Tom Barrett will trim state spending by cracking down on individuals and instances that abuse taxpayer dollars.”

www.BarrettForWisconsin.com Authorized and paid for by Barrett for Wisconsin, Catherine Shaw, Treasurer.

15

As Governor, Tom Barrett will trim state spending by cracking down on individuals and instances that abuse taxpayer dollars by: • Reducing Medicaid billing fraud. Nationwide estimates of Medicaid fraud are around 10% of all spending. A Colorado audit found that the state overpaid $90 million in welfare payments and as much as $48 million were for improper Medicaid payments alone. New York estimates it is wasting as much as 40% of their Medicaid funds on fraud and abuse. A conservative estimate would be that Medicaid fraud in Wisconsin comes to $180 million a year. If we reduced that by just 20%, it would produce estimated annual savings of $35.9 million. Tom will do this by: o Creating a Medicaid Fraud Inspector General to crack down on fraud. o Expanding the number of Medicaid anti-fraud staff. The typical anti26 Medicaid-fraud worker recovers, on average, $200,000 per year. o Hiring specialists to detect fraud, waste, and abuse in Medicaid. Advanced analytic tools designed to uncover fraud, waste, and abuse in Medicaid are programmed to learn normal billing patterns, identify aberrant billing activities, and spot collusion between provider networks. o Banning payments for prescriptions by doctors who have been barred from Medicaid for fraud and abuse. o Expanding corporate-level fraud detection. Medicaid fraud is not limited to unscrupulous doctor’s offices and ineligible clients. We should expand our efforts to monitor for potentially abusive or fraudulent corporate practices.27 o Toughening Qualifications for Medicaid Vendors. Illinois has cracked down on Medicaid service providers by requiring background checks. California requires all new vendors to be on probation for up to 18 months and inspectors make onsite visits to providers in fraud-prone services, to keep sham companies out of the program. Barrett will make sure Wisconsin does the same. o Sending all Medicaid recipients an alert of all billing activity on their account, so they can report overbilling to the state to help us catch fraudulent providers. o Increasing penalties for overbilling. Cracking down on tax deadbeats. The majority of Wisconsin citizens pay their taxes responsibly. Unfortunately, too many don’t. According to the Institute for Wisconsin’s Future, the gap between the amount of money that taxpayers should pay and the amount that is actually paid is $1.2 billion, equal to 10% of state tax collections.28 Some of the tax gap is due to deliberate tax evasion, but some is also due to inadvertent mistakes or misunderstandings about what’s taxable or what’s deductible. It’s impossible to close the tax gap completely. However, reducing it by 20% would generate an additional $240 million that is already owed the
www.BarrettForWisconsin.com Authorized and paid for by Barrett for Wisconsin, Catherine Shaw, Treasurer.

16

state. To make a significant difference in catching tax scofflaws, Tom will ramp up efforts to make sure that everyone pays their fair share so that hardworking Wisconsin families and businesses who play by the rules can pay less. To accomplish this Tom will: o Offer a last-chance tax amnesty program for delinquent and unpaid taxes – and then clamp down on deadbeats. We need to go further than the voluntary disclosure program to get those who owe delinquent taxes to pay up. In 2009, the state offered a tax amnesty window for businesses that owed sales taxes. As Governor, Tom will offer a short-term, last-chance tax amnesty program to provide all those who owe back income taxes the opportunity to pay their liabilities and avoid criminal prosecution, penalties, and some of the interest owed. For those who don’t, he’ll increase audit rates, prosecutions and interest rates immediately after the amnesty, which ought to provide additional motivation to pay up – and if it doesn’t, those tax deadbeats can expect to pay a whole lot more. Estimated annual savings: $30.9 million.29 o Use our licensing and registration system to detect tax deadbeats. Rhode Island estimated it could increase tax collections by $6 million simply by matching tax records with license and registration renewal databases to block individuals owing back taxes from obtaining vehicle or professional licenses or renewing registrations.30 In Wisconsin, this would equate to an estimated annual savings: $30 million.

www.BarrettForWisconsin.com Authorized and paid for by Barrett for Wisconsin, Catherine Shaw, Treasurer.

17

V. TOP-TO-BOTTOM PERFORMANCE REVIEW OF ALL STATE GOVERNMENT OPERATIONS

“In addition to the specific unnecessary spending Tom has identified and will reduce as Governor, Tom knows we can cut much more. He will launch an exhaustive top-to-bottom performance review of all state government operations.”

www.BarrettForWisconsin.com Authorized and paid for by Barrett for Wisconsin, Catherine Shaw, Treasurer.

18

In addition to the specific unnecessary spending Tom has identified and will reduce as Governor, Tom knows we can cut much more. He will launch an exhaustive top-to-bottom performance review of all state government operations. Such efforts have proved successful in other states: • Michigan’s Legislative Commission on Government Efficiency identified 45 recommendations that included approximately $1.5 billion in potential annual savings.32 Iowa’s Efficiency Review in December 2009 identified potential savings of $344 million – or as much as seven percent of the state budget – and the legislature has enacted, or the Governor has ordered through executive order, $270 million of those efficiencies, amounting to more than 5% of the state’s general fund budget. The California Performance Review identified savings accounting for 6% of that state’s budget. After completing a statewide performance review in the State of Texas, auditors identified 195 separate issues and produced about 1,000 separate recommendations. The review found roughly $4 billion in savings plus another $1 billion in potential increases in federal aid, in a two-year budget of about $60 billion. This represents a 7% savings – not including the additional $1 billion in federal aid.

To ensure compliance with his top-to-bottom performance review, Tom will require all Cabinet Secretaries, Department Directors, appointees and all other high-level officials to sign performance contracts with specific goals and measures tailored to their department or agency. These “executive contracts” will provide a clear and measurable way to communicate priorities to agency secretaries and department heads. And Tom will personally evaluate progress on each contract, holding every major Secretary and Department Director accountable for meeting specific goals and objectives. The specific spending cuts detailed Tom’s plan to Put Madison on a Diet, combined with the reductions that will be found through the exhaustive performance review, will deliver to Wisconsin taxpayers more than $1.1 billion a year in annual savings and efficiency improvements in state government. Tom’s plan also includes significant reforms in the way Madison works – changes that will make state government more responsible, accountable, transparent and responsive to the people of Wisconsin.

www.BarrettForWisconsin.com Authorized and paid for by Barrett for Wisconsin, Catherine Shaw, Treasurer.

19

VI. REFORMING THE BUDGET PROCESS

“When Barrett is Governor, he will demand adherence to sound budgeting rules and policies that will ensure smarter, long-term planning and sustainable budgets that are results based.”

www.BarrettForWisconsin.com Authorized and paid for by Barrett for Wisconsin, Catherine Shaw, Treasurer.

20

The Governor works closely with the Department of Administration to forge the state budget. As Governor, Tom will demand adherence to sound budgeting rules and policies that will ensure smarter, long-term planning and sustainable budgets that are results based, such as: • Proposing honest budgets. As Governor, Tom will only submit and sign budgets that are truly balanced, as defined by standards established by the Legislative Fiscal Bureau. Eliminating pork in the budget: Too often, special interest pork projects unrelated to Wisconsin’s revenues and expenditures have been tucked into the state budget. Tom will end this practice. Establishing revenue estimates before considering spending plans. If revenue estimates rise during the legislative process, we should allocate all excess revenues to the reserve fund. If revenue estimates decline during budget deliberations, we must complete a balanced budget with the new, lower estimates. Following the budget development principles and best practices outlined by the Government Finance Officers Association (GFOA): 33 o Requiring that each program and department establish broad goals to guide their decision making, using public and employee input; o Developing strategies and approaches to achieve goals - programmatic, operational, and budgetary; o Developing budgets that are based on working toward goals and include measureable outcomes the programs will work toward; and o Evaluating each agency’s performance toward meeting its goals and adjusting programs and funding, as needed. Making Sure Wisconsin Gets Its Fair Share. On a per capita basis, Wisconsin ranks 44th among the states in federal spending.34 This low ranking puts added stress on the state budget. By maximizing Wisconsin’s share of federal funding we can offset costs to the state budget and ease the burden on state taxpayers. Tom’s actions will include: o Creating a state grants office. In 2004, Maryland established a Governor’s Grants Office with a full time staff devoted to identifying federal grant opportunities and training state agency personnel on how best to access available funding. During federal fiscal year 2005, Maryland state agencies received $6.5 Billion in federal funds. In federal fiscal year 2006, this number climbed to $7.0 Billion. The National Governor’s Association has recognized the Maryland Grants Office as one of its featured “Best Practices” ideas for other states. As Governor, Tom will create a state grant clearinghouse to be involved in preparing every agency’s indirect cost plan and reports and making sure the plans are filed in a timely manner. o Instituting a statewide federal revenue maximization program. The federal government provides hundreds of millions of dollars in reimbursements that states can receive or recover. Wisconsin should be able to identify at least another $100 million in federal funds we should be receiving each year to ease the burden on the state budget.

www.BarrettForWisconsin.com Authorized and paid for by Barrett for Wisconsin, Catherine Shaw, Treasurer.

21

VII. MAKING MADISON WORK

“As Governor, Tom Barrett will change the culture in the state capitol and make it work better for the people.”

www.BarrettForWisconsin.com Authorized and paid for by Barrett for Wisconsin, Catherine Shaw, Treasurer.

22

Finally, there is plenty that needs to be done just to make Madison work right. Some of these things will save money right away – others will save money indirectly by making state government more open and transparent, responsive to the people of our state, and less dependent on special interests and the same old ways of doing business. As Governor, Tom Barrett will change the culture in the state capitol and make it work better for the people, by: • Putting the special interests under the microscope by mandating online reporting of lobbyist meetings with elected officials within 48 hours. The public has a right to know which lobbyists are meeting with our public servants, how often, and on which topics. Online reports filed with the GAB within 48 hours of a meeting can provide much needed transparency about meetings and topics between lobbyists and legislators. Ending the revolving door between the legislature and lobbyists. Currently, legislators can retire and immediately lobby their former colleagues. It order to protect the integrity of the legislative process, former legislators – and top staff and high level executive appointments – should be restricted from lobbying for one year after they leave their post. Eliminating the pension enhancer for all elected officials, political appointments, and top executive branch officials. Currently, these officials receive additional sweetener pension benefits that are not offered to any other public employee. Public employees should be treated fairly and equitably, regardless of the level at which they serve, and this provision should be repealed.35 Managing the state workforce to ensure that managers are accountable for the most efficient and effective use of employee time. Keeping compensation and sick/leave accrual for state employees in line with the private sector, including wages, health care, pension, retirement age, job security, and overtime pay. No one has done a careful study in Wisconsin to determine if total compensation of public employees is higher or lower than comparable private sector jobs. We should compare state government and market total compensation levels for specific job categories, and then negotiate with employee unions to bring total compensation inline with the private sector. Bringing State Government to taxpayers in all corners of Wisconsin, not just Madison, to ensure everyone in the state has direct access to their government.

By making Madison work, Tom Barrett will be the Governor who improves accountability and ensures state government is responsive, effective, and efficient to the people of Wisconsin.

www.BarrettForWisconsin.com Authorized and paid for by Barrett for Wisconsin, Catherine Shaw, Treasurer.

23

References
According to the Bluebook for 2009-2010, p. 685, in 2008 there were 103,600 state government employees, 287,200 local government employees. If all government employees, spouses, partners, and dependent children were in a single health insurance purchasing pool, they would constitute roughly 15% of the statewide workforce (3,084,100) and would probably exceed 20% of the population not covered via Medicaid or Medicare. This very large purchasing pool, if managed in the same way as the Wisconsin State Employee Health Plan (allowing participants to choose among competing HMOs and a fee-for-service alternative, but required to pay out-of-pocket for a more costly Tier 2 or Tier 3 plan) is likely to do exactly what the Wisconsin State Employee Health Plan has done in Dane County, where the state alone is nearly 25% of the non-Medicaid/non-Medicare population: drive down costs. The reduction for the State Plan in Dane as opposed to other counties is nearly $1200/year for single coverage and nearly $3000/year for family coverage. If the impact of the proposed combined government employee purchasing pool is to save a much smaller amount of $1000/year per employee, whether single or family coverage, for (a) the 50% of state government employees outside Dane County ((103,600 x 50%) x $1000) and (b) all local government employees (287,200 x $1000), the savings would be $339,000. 2 According to the Kaiser Family Foundation "State Health Facts" website (http://www.statehealthfacts.org/profileind.jsp?cmprgn=1&cat=4&rgn=51&ind=186&sub=48), in State Fiscal Year 2008 total WI spending on Medicaid (including BadgerCare Plus) was $4,877 million. Looking at the Fiscal Bureau's "Informational Paper #44," Table 22 p. 96, it’s $5,047 million. Thus, savings of $200 million in 2008 would have been 4.1% using the Kaiser number and 4.0% using the LFB number. We're nearly into State Fiscal Year 2011– three years later; BadgerCare Plus enrollment has increased substantially; and costs/enrollee have also increased. For the last few biennia, according to LFB, Medicaid costs have risen about $200 million/year. I suspect the total program's cost is at least $5,600 million today. Thus, a $200 million cut would be 3.6%. 3 State health insurance costs totaled $345 million in 2009. This, then, represents a conservative 2% savings. 4 Florida estimated that a dependency audit could generate $5 to $30 million dollars in on-going savings for the state. Florida TaxWatch, Report and Recommendations of the Florida TaxWatch Government Cost Savings Task Force to Save More Than $3 Billion, March 2010, pp. 82-83. 5 Michigan estimated it could save the state $20 million annually by implementing these types of programs. Michigan’s Legislative Commission on Government Efficiency, Charting A Way Forward: A Path Towards Fiscal Stability For the State of Michigan, November 2009, p. 21; http://council.legislature.mi.gov/files/lcge/lcge_final_report.pdf. 6 U of CT Health Care Center's Center on Aging, Long Term Care Needs Assessment Legislative Briefing Follow-up .to Questions Asked, Jan 16, 2008, Question 2. 7 Pew Center on the States, One in 100: Behind Bars in America 2008, February 2008, p. 30; http://www.pewcenteronthestates.org/uploadedFiles/8015PCTS_Prison08_FINAL_2-1-1_FORWEB.pdf . 8 Pew Center on the States, One in 100:Behind Bars in America 2008, February 2008, p. 31; http://www.pewcenteronthestates.org/uploadedFiles/8015PCTS_Prison08_FINAL_2-1-1_FORWEB.pdf . 9 National Association of State Budget Officers, Expenditure Reports, Wisconsin Annual Corrections Expenditures. 10 A National Council on Crime and Delinquency (NCCD) report looked at potential cost savings in four states if 80% of their "non-serious" offenders (non-serious offenses are those that are not violent, not sexual, and don’t involve significant property loss) were directed to alternatives other than prison, such as electronic monitoring, reporting programs, drug treatment, and drug courts. The report estimated that the states would save an average of 77 percent on their costs for the offenders diverted into these programs. If Wisconsin diverted just 3,503 inmates into these programs (50 percent of the estimated number of nonserious offenders), and it costs our state $43,543 per year to house an offender, the potential savings would equal $117.4 million annually. Linh Vuong, Christopher Hartney, Barry Krisberg, Susan Marchionna, The Extravagance of Imprisonment Revisited, National Council on Crime and Delinquency, Jan 2010, http://nccd-crc.issuelab.org/research/listing/extravagance_of_imprisonment_revisited.
1

www.BarrettForWisconsin.com Authorized and paid for by Barrett for Wisconsin, Catherine Shaw, Treasurer.

24

Last year, excluding highway and construction, the State spent approximately $1.2 billion on contracts. Dept of Admin, Div of Enterprise Operations, Bureau of Procurement. Even a 1% price reduction would save $12 million. Florida TaxWatch, Report and Recommendations of the Florida TaxWatch Government Cost Savings Task Force to Save More Than $3 Billion, March 2010, p. 10. 12 Texas estimated it would save 0.05 percent, or $70 million annually in procurement costs for all types of goods and services through professionalizing contract management. See California Performance Review, SO73, Create a Statewide Contract Management Policy, p. 4; http://cpr.ca.gov/report/cprrpt/issrec/stops/proc/so73.htm. 13 Florida estimated that if it enforced PPCs more strictly and reduced short term contract prices by just one percent, it would save $8 million annually. Florida TaxWatch, Report and Recommendations of the Florida TaxWatch Government Cost Savings Task Force to Save More Than $3 Billion, March 2010, p. 5. 14 Subtotals from this section: Renegotiate contracts: $12 m, Contract management: $60 m, Enforce PPC: $4.8 m. Total = $76.8 m 15 Florida estimated it could achieve savings of $65 million annually by moving to digital samples. Florida TaxWatch, Report and Recommendations of the Florida TaxWatch Government Cost Savings Task Force to Save More Than $3 Billion, March 2010, pp. 100-102. South Carolina limited free supplemental items to one copy each of the student edition, teacher edition, and teacher CD-ROM, plus an overview program or brochure; districts can receive one of each item per school, plus one set for the district. The result was a 20 percent savings in textbook costs. Florida TaxWatch, Report and Recommendations of the Florida TaxWatch Government Cost Savings Task Force to Save More Than $3 Billion, March 2010, pp.100-102. 16 Florida estimated it could achieve a 24% savings annually in textbook costs by moving to digital samples. South Carolina limited free supplemental to schools and districts and realized savings of 20% of textbook costs. Florida TaxWatch, Report and Recommendations of the Florida TaxWatch Government Cost Savings Task Force to Save More Than $3 Billion, March 2010, pp. 100-102. In FY 2008-09, school districts in Wisconsin spent $39.9 million on textbooks. WI Department of Public Administration, School Finance Data Warehouse. 17 Texas Sunset Review Commission, General Information (FAQs), http://www.sunset.state.tx.us/faq.htm. 18 The California Performance Review estimated that an effective workforce plan could result in savings of $240 million in Fiscal Year 2004-2005, increasing annually thereafter through at least FY 2009-2010, at which time the cumulative savings could total $4.3 billion. 19 The estimated annual savings for the State of West Virginia to move to VoIP were $7.5 million. Public Works, West Virginia Performance Review, Phase I Issue Docket, June 2006, pp. 136-138; http://www.public-works.org/docs/WVPR.Phase_1_Report_Final.pdf. 20 Florida estimated that such a change would save it $23.1 million per year. Florida TaxWatch, Report and Recommendations of the Florida TaxWatch Government Cost Savings Task Force to Save More Than $3 Billion, March 2010, pp. 15-16. 21 Florida estimated that if it could convert half of it paper payments to e-payments, it could save $1 to $1.5 million annually. Florida TaxWatch, Report and Recommendations of the Florida TaxWatch Government Cost Savings Task Force to Save More Than $3 Billion, March 2010, p. 16. 22 Florida estimated that adopting such a system would save the state approximately $2.3 million annually. Florida TaxWatch, Report and Recommendations of the Florida TaxWatch Government Cost Savings Task Force to Save More Than $3 Billion, March 2010, pp. 18-19; estimated savings does not factor in implementation costs. 23 Florida estimated that such a surcharge would bring in an additional $8 to $16 million the first year. Florida TaxWatch, Report and Recommendations of the Florida TaxWatch Government Cost Savings Task Force to Save More Than $3 Billion, March 2010, pp. 62-63. 24 Florida estimated that it could reduce energy costs by $3.1 million annually by reducing computer energy use. Florida TaxWatch, Report and Recommendations of the Florida TaxWatch Government Cost Savings Task Force to Save More Than $3 Billion, March 2010, pp. 16-17. 25 Nevada SAGE Commission on Spending and Government Efficiency, Final Report, January 2010, Recommendation 11, p. 21. The state of Utah was the first state to pilot this type of change last year – and it realized energy savings of $500,000, plus another $200,000 in decreased janitorial costs. Employee morale went up, as did public opinion as people were happy to be able to access state services after work
www.BarrettForWisconsin.com Authorized and paid for by Barrett for Wisconsin, Catherine Shaw, Treasurer.

11

25

Monday through Thursday. Even more noteworthy is the estimated reductions in sick leave and overtime, and a reduction of 3 million miles traveled for the state fleet, totaling an additional $4.8 million savings. Robert Gehrke, Utah Sticks With Four-Day Workweek, The Salt Lake Tribune, December 2, 2009; http://www.sltrib.com/news/ci_13908621. 26 Steven Malanga, How to Fight Medicaid Fraud, City Journal, Manhattan Institute, Spring 2006, http://www.city-journal.org/html/16_2_medicaid_fraud.html. 27 Florida TaxWatch, Report and Recommendations of the Florida TaxWatch Government Cost Savings Task Force to Save More Than $3 Billion, March 2010, p. 83. 28 Institute for Wisconsin’s Future, Wisconsin’s Billion-Dollar Tax Gap; How Uncollected Taxes Can Help Fill the State’s Budget Hole, April 2010, p. 1. 29 Wisconsin’s 1998 tax amnesty brought in $30.9 million in additional revenue. See http://www.cga.ct.gov/2008/rpt/2008-R-0595.htm. Even though unemployment is up and the economy is down today, on the whole there has been population and employment growth over the past 12 years. Thus, the take from a new tax amnesty could be expected to be at least as large as the over a decade ago. 30 Rhode Island Department of Administration, Fiscal Fitness Initiatives, http://www.fiscalfitness.ri.gov/initiatives/#tax. Comparative data on state revenue is from State Rankings 2006, Morgan Quitno Press, Table 338. 32 Charting a Way Forward: A Path Towards Fiscal Stability For the State of Michigan, Legislative Commission on Government Efficiency, November 2009, p. 63; http://council.legislature.mi.gov/files/lcge/lcge_final_report.pdf. 33 Best Practices in Public Budgeting, The Government Finance Officers Association, 2000; http://www.gfoa.org/services/nacslb/. 34 Andrew D. Reamer, Counting for Dollars: The Role of the Decennial Census in the Geographic Distribution of Federal Funds, The Metropolitan Policy Program at the Brookings Institute, March 2010, Table 1;http://www.brookings.edu/reports/2010/0309_Census_dollars.aspx 35 The savings here would be nominal. Total GPR payments for pension in 2009 were $209 million. WRS elected official participation is about 0.55% (see LFB informational paper on WRS). So, roughly $1 million to $2 million GPR annually is an estimate of the total contribution annually for elected and appointeds. Removing the pension enhancer would represent a small fraction of that, not even registering in the Barrett savings total. But it would be an important step toward for equity in government

www.BarrettForWisconsin.com Authorized and paid for by Barrett for Wisconsin, Catherine Shaw, Treasurer.

26

Sign up to vote on this title
UsefulNot useful