GOVERNMENT RESTRUCTURING TASK FORCE FINAL REPORT 2010 The New Mexico Legislative Council Service 411 State Capitol Santa Fe, New Mexico 87501 (505) 986-4600 www.nmlegis.gov 202.183820 TABLE OF CONTENTS LETTER FROM THE CHAIRMAN EXECUTIVE SUMMARY AND OVERVIEW OF RECOMMENDATIONS ............................. 1 Fiscal Outlook ........................................................................................................................... 2 Work Plan ................................................................................................................................. 3 Process ...................................................................................................................................... 5 Core, Essential Services ............................................................................................................ 6 Short- and Long-Term Goals .................................................................................................... 7 Executive Reorganization ....................................................................................................... 10 Fiscal Impact ........................................................................................................................... 20 Further Study .......................................................................................................................... 21 CHAPTER 1 — HISTORICAL PERSPECTIVE ......................................................................... 25 Carruthers Report Findings and Recommendations ............................................................... 27 CHAPTER 2 — GUIDING PRINCIPLES ..................................................................................... 29 Efficiency ................................................................................................................................ 30 Effectiveness, Including Cost Savings .................................................................................... 32 Accountability and Transparency ........................................................................................... 32 CHAPTER 3 — INTERIM STUDIES ............................................................................................ 35 CHAPTER 4 — DEPARTMENT ORGANIZATIONAL CHARTS ........................................... 43 Commerce Department ........................................................................................................... 44 Department of Finance and Administration and General Services Department ..................... 45 Department of Public Safety ................................................................................................... 46 Energy, Minerals and Natural Resources Department ............................................................ 47 New Mexico State Government Departments ........................................................................ 48 CHAPTER 5 — BOARDS, COMMISSIONS AND SUNSETS .................................................... 49 CHAPTER 6 — PUBLIC EMPLOYEE AND GENERAL PUBLIC SURVEYS AND COMMENTS ............................................................................................................... 55 CHAPTER 7 — PUBLIC SCHOOL AND HIGHER EDUCATION .......................................... 59 Public Schools ......................................................................................................................... 59 Higher Education .................................................................................................................... 63 CHAPTER 8 — HEALTH CARE FINANCE AND ADMINSTRATION .................................. 67 CONCLUSIONS ............................................................................................................................... 71 Appendices APPENDIX A — Task Force Enabling Legislation Executive Reorganization Act APPENDIX B — Endorsed Legislation Chart Agency Sunset Table Boards and Commissions Spreadsheet Selected Section-by-Section Analyses APPENDIX C — Public School Funding Formula State Equalization Guarantee Distribution Calculation GRTF Staff Analyses of Carruthers Report Recommendations on K-12 Education Lottery Tuition Fund Sustainability Higher Education Funding Formula Medicaid Overview and Operational Structure APPENDIX D — State Government Efficiencies and Effectiveness Survey VOLUME 2 — Task Force Agendas and Minutes December 2010 On behalf of the government restructuring task force, I am pleased to transmit its final report to Governor Susana Martinez and the fiftieth legislature, first session. The report includes recommendations of the task force, including near- and longer-term ideas to improve state government by making it more efficient and cost-effective as well as more responsive and accountable to New Mexico citizens. Some recommendations have the potential to save millions of dollars while others will have less dramatic, but nonetheless important, changes by eliminating or streamlining government agencies and programs. The task force undertook its statutory charge to study the current resources of state agencies, programs, services, funding and policies and the public needs served by them, including recommendations of the 2009 governor's committee on government efficiency (the Carruthers committee); the need for consolidation of agencies and elimination or reduction of redundant, duplicative or overlapping programs and services; and current and projected revenue estimates for the next three to five years. New Mexico is in one of its toughest financial times since the great depression, and the legislature and executive must work together to ensure that state government is able to provide essential services to its citizens at the least cost to its taxpayers. To come to that will take more than one interim's work, and the task force acknowledges there is still work to be done if state government and state funding are to be right-sized for the next decade. This report includes issues and ideas that should be explored further, by this task force or some other legislative/executive process. The task force members stand ready to assist the new governor and the new legislature in this continued endeavor. The task force membership included public members who have experience in state government finances and administration, and their assistance proved invaluable to the work of the task force. Patrick Baca of the Pueblo of Sandia served as state secretary of labor under Governor Bruce King and as transportation director and chief of staff for the public regulation commission. John Gasparich served as state budget director under Governor Gary Johnson and was a member of last year's governor's committee on government efficiency. Michelle Lujan Grisham served as cabinet secretary for both the aging and long-term services department and the department of health. Jim O'Neill was the deputy secretary for tax policy at the taxation and revenue department for many years. David Ortiz was the long-time administrative services director of the general services department and retired from that department as deputy secretary; he currently serves on the Pojoaque school board. Dr. Dan Lopez served as secretary of finance and administration and is currently the president of the New Mexico institute of mining and technology. The department of finance and administration was represented first by Secretary Katherine Miller and then Secretary-Designate Dannette Burch. Ms. Burch is the former deputy director of the legislative finance committee and served dual roles as deputy secretary of finance and administration and state budget director before being named to replace Ms. Miller. The task force gratefully acknowledges its debt to these members for sharing their knowledge and insights of New Mexico state government. The task force thanks the many individuals who provided assistance, information and insight instrumental in the task force's work. In particular, the task force appreciates the time and attention paid by state employees and citizens who filled out the task force's online surveys and who commented in person at task force meetings or online at the task force's web site. The task force could not have completed its work without the able assistance of its staff from the legislative council service, legislative finance committee and legislative education study committee; and the secretary's office, state budget division and office of education accountability of the department of finance and administration. This report is the result of extensive work during the interim, most especially by staff led by Jonelle Maison of the legislative council service. They compiled and presented information, analyzed ideas, drafted bills, provided fiscal impacts, tracked our progress and tried to keep us on point and steer us around the numerous pitfalls that any task force faces. On behalf of the entire task force, we thank them for their hard work and service, not just to the task force, but to the legislature and the state. As chairman, I would like to thank all the members of the task force for their enduring commitment and tireless efforts toward meeting their charge to improve state government. In particular, I want to thank my vice chairwoman, Representative Patricia A. Lundstrom, for her assistance and leadership during the interim. This report and its appendices and legislative package are available online at www.nmlegis.gov. Sincerely, TIM EICHENBERG New Mexico State Senator (District