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Des Moines, Iowa Loma Bumside Ferrychapin Countysupervisor South Central IA Fed

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Des Moines, Iowa Loma Bumside Ferrychapin Countysupervisor South Central IA Fed I- GOVERNOR'S COMMITTEE , ON GOVERNMENT SPENDING REFORM December 1991 TABLE OF CONTEhTS SECTION I[ EXECUTIVESUbMARY Chapter 1: Process and Achowledgements 1 Chapter 2: Key Findings 10 Chapter 3: Implementation Wenge 16 SECTION WI BACKGROUND Chapter 1: Economic Environment 25 Chapter 2: Current Budget Oveniew 33 Chapter 3: Specific Objectives 36 -.- irc SECTION I11 RECOMMENDATIONS Chapter I: Top Opportunities 38 Chapter 2: Other Recommendations 106 Chapter 3: Near Term Guidelines 153 Chapter 4: Long Term Vision 155 SE-CTION IV APPENDICES Chapter 1: Citizen Input 158 Chapter 2: Opportunities to be Quantified 161 Chapter 3: Task Force Members 164 12 LL: Section I Chapter 1 Process and Acknowledgements . Structural Deficit Requires Fundamental Changes Iowa State government is facing a structural defiat of about $150 million for the 1993 fiscal year. When considering future Generally Accepted Accounting Prinaples (Gelstandards, the State's defiat is approhtely $300 million. Governor Creates Committee on Spending Reform In Jdy 1991, Iowa Governor Terry E Branstad formed the Governor's Committee on Government Spending Reform, a Statewide committee to study and recommend permanent reforms in State government spending. Rather than increasing taxes, Iowa is working to put a stop to spending that exceeds revenues. The committee's mission was to develop and implement short and long-term strategies to reshape the future role and practices of Iowa governments with a focus on spending reductions. LY The Governor's Comnuttee on Government Spending Reform is made up of 22 Iowans from the public and private sectors, including large and small business leaders, the State treasurer, county supervisors, mayors, legislators, and representatives from labor and agriculture organizations. Exhibit 1-1-1 provides the names and titles/companies of the committee members. Exhibit 1-1-1 GOVERNOR'S COMMITTEE on GOVERNMENT SPENDING REFORM David Fisher, Chair onthank co. Des Moines, Iowa Loma Bumside Ferrychapin CountySupervisor South Central IA Fed. of Labor, AFLQO Storm Lake, Iowa Des Moines, Iowa Jim Cownie' Arlene Dayhoff New Heritage Associates HumanServicesCoundchair Des Moines, Iowa Cedar Rapids, Iowa Charles Edwards Michael Fitzgerald Des Mohes Register State Treasurer Des Moines, Iowa Des Moines, Iowa Tom Gould Joan Hest& I Younkers State Representative Des Moines, Iowa Honey Creek, Iowa +I &3 Jeanine Hettinga EmilHusak Hetbga Equipment, Inc. State Senator Clive, Iowa Toledo, Iowa Lee Liu' bpet LE.S. Industries Inc. Lopez & Heishman, Inc. Cedar Rapids, Iowa Iowa City, Iowa Anita Mandelbaum MikeMcCanille Coopers & Lybrand Mayor Des Moines, Iowa Fort Dodge, Iowa Delores Mertz Merlin Plagge' State Representative Farm Bureau o#osen, Iowa West Des Mobes, Iowa Joan Poe AlRenken Standard Distributing Co. ALCOA Waterloo, Iowa Davenport, Iowa Harry Slife Betty Snyder' State htor h4ayor Cedar Falls, Iowa Clinton, Iowa Charex Yanney Guarantee Roofing & Siding Co. Sioux City, Iowa 'ExecutiDe Committee Member -2- The Committe met for the first time on July 23 and met monthly throughout the 20- week process. Shortly after the Committee's first meeting, an executive committee, consisting of the chair and five other mmmittee members, was established by the chair. The executive committee was responsible for directing and reviewing the work of task forces between the full Committee meetings. Each task force met approximately seven times between late August and mid-November when final task force reports were issued. Exhibit 1-14 GOVERNORS COMMITEE ON GOVERNMENT SPENDING REFORM SCHEDULE DATE i.:. I --T--------- I -T----- Several coordinators and analysts from various State departments also assisted the Governor's Committee on Spending Refom in this effort. Exhibit 1-14 provides the names and departments of the coordinators and analysts. Exhibit 1-14 PROJECT STAFF Steve MasIikowski Paul Carkon Project Manager Director of Analysis Department of Management Department of Management COORDINATORS ANALYSTS David Ancell -Collections Ron &nosson -Public Finance Dept of Elder Affairs Dept. OfManagement Dave blender -Technology David Ancell - Collections Enhancements Dept. of Elder Affairs Dept. of cultural Affairs, IPT Janet Galloway - Primtization Mary Jensen - PPiDatization Dept of commerce Dept of Transportation ---- Rich Jacobs - Public Finance Kathy Mabie - Executive Branch Mew Dept. of Revenue and Finance Dept. of Management Mike Lipsman - Executiue Brunch Lisa Oakley - Intergmmmtal Rtmku Relations Dept. of Revenue and Finance Dept. of Employment services Jo Page - Staiewide MceDelivoy rim Overland - Stattmi.de !%mice Dept. of Commerce, Insurance Division-7 Delivery Daniel Winegarden - Technology Enhan Dept Human services of Dept. of Commerce, Insurqce Division -.-I_...---- David Plazak - Public Finance Christine Van Meter - Public Finance/ Dept of Economic Development lntergmmental Relations Dept. of Management 1Q3rn.1 C/DL -6- We also sought the help of outside consultants, Booz.AUen and Wton,to Serve a few key roles in helping the committee and the task forces in achieving OWobjective. The Booz*AU.en personnel assisted in the process by providing task force mrdination, issue management, meeting fadlitation, quantification of opportunities, and integration of final recommendations. Exhibit 1-14 I BOOZ*ALLENTEAM GaryNeilson John McCarter Jay Marshall Eric small .. Mark Thut -7- I' Exhibit 1-1-7 provides the overall project team structure including the Governor's Committee, Executive Committee, Task Forces, coordinators, analySts and Booz.Men. * Exhibit 1-1-7 ROLES AND REUTKWlSnlPS mi--- In addition, we received hundreds of letters and ideas from people in State and local goverment and other State am. We gratefully acknowledge all those who have partiapated in the process, and we invite you and others to continue to be a part of the changes that are yet to come as a result of this groundwork. What Went Into the Process of Making Recommendations We approached this effort aggresively, given the relatively brief time frame in which we had to work and the scope of our task. The task forces were given a framework of developing recommendations and identifying opportunities based on three alternative scenarios: 10 percent, 20 percent and 40 percent reductions. This framework helped to ensure that the task forces broke through conventional paradigms to think about fundamental changes. We tried to generate a free flow of ideas, first considering ideas objectively, then looking at benefits and costs and finally implementation issues. In this process, the nature of the approach is as important as the steps taken. The Governor set the tone by giving us our charge and stating, 'There are no sacred cows." The spending reform process was done in a spirit of openness, involving as many people as possible. Our objectives were to: -8- find the best ideas; communicate the importance of this effort; get ppleto buy into the process of change; reduce the number of surprises; instill a fact-based, hypothesis-driven orientation. We looked at opportunities in two ways: the near-term, action oriented, and the long- term vision of how govemment could be operated differently in Iowa. In this way we tried to establish a pattern of continuous improvement in the process of change. This effort does not end when we make our recommendations to the Governor on Ikcember 18,1991. This process will continue immediately as short-term recommendations are implemented, and will go on as further spending reforms are developed and longer- term action is taken to redefine government in Iowa. Recommendations Include Continuous Improvement We applied the prinaples of continuous quality improvement used for many years in Japan and, more recently, in American business, to OUT recommendations, apedally those reflecting long-term vision. The total quality prinaples first advocated by Dr. Edwards Deming, a native of Sioux City, Iowa, emphasize the importance of this ongoing, innmental process. Iowa is breaking new ground by applying prinaples of total quality management to the public sector. Outcome of the Committee's Recommendations Our recommendations provide options for bringing government in line with the demographics and the finanaal realities of the State. We established guiding prinaples and criteria for government spending reform. Thew will assist state and local government in making the restructuring transition. If implemented, our recommendations will enable State govenunent to adequately fund ehitlements and standing appropriations; meet the fundamental needs of Iowans; allow for effective administration of State government; and maintain the State's top priorities in education and knomic development so progress can continue toward preparing Iowa's young people for quality jobs in Iowa's future. The remainder of Section I-Executive Summary provides an overview of our findings and a plan for implementation. Section II provides an overview of the State's finanad position. section III provides detailed explanations of our recommendations and Section N provides a summary of input from athas, other opportunities for spending reform that have not yet been analyzed, and a list of the members of the seven task forces. -9- Section I Chapter 2 Key Findings i. Economic Environment and Current Budget Iowa is not alone in facing fiscal difficulties. In the last two fiscal years, a majority of states have faced significant fiscal problems. According to the National Assodation of State Budget Officers, in fiscal year 1992,29
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