Friday, February 6, 2009

What I Would Tell Governor Carcieri

In previous posts I've been quite harsh on Rhode Island's governor. I met the man and he is really personable. He seems to be a quite, likable guy with a corporate raider mentality. I just learned yesterday that he was not one of the nineteen Republican governors that signed the letter in support of the President's stimulus plan. In fact, he wrote a letter opposing the approach used in the plan. How unfortunate for Rhode Island. Instead of support, he continues to espouse the old Reaganomics's trickle-down philosophy as the only way to deal with the crisis. He may be nice, but he's wrong.

Instead of continually throwing bricks, I've decided to outline what I think should be done in this state. Before doing so, I want everyone to know that I know a lot about cutting the costs in government. When first appointed to my leadership role, my agency had 65 full time employees (FTE). When I departed 20 years later the agency had 29 FTE. Four years later, the agency has less than 20 FTE. Downsizing was appropriate in 1986, but not today.

What follows is my 8 point plan to help turn the state around and this is what I would offer to the governor.

1. Rightsize state government. Downsizing continually is not the answer, rightsizing is. Government can do many things better than the private sector at a huge savings. A case in point; a construction project that hires an engineering firm to watch over the contractors. In a case that I'm aware of, a very small project paid out close to $45,000 for one person to watch over the project. He may have shown up on site a dozen times. If the state filled their old positions, this one employee could watch over a dozen projects at tremendous savings. Contractors watching over contractors is simply a bad policy.

2. Decentralize purchasing with controls. If purchasing were somehow decentralized with the appropriate checks and balances, almost every purchase off of the state's master price agreements could be made for less money. Better deals can almost always be found. As an example, I'm aware of a project to put a new roof on a very small building. The price off of the master price agreement I'm told is $10,000. The actual cost if I contracted the job privately would be in the range of $5,000 (more on this in a future post).

3. I would limit government borrowing. I would seek a 5 year plan that would restrict the borrowing power of the state. I would cap any borrowing at 80% of the level of bonds that retired in that period. So, if the state had retired $100 million in spending during the period, the state could only move forward with $80 million in new borrowing. Any exception would require the vote of the people. This would be a short term program to slow down the growing government debt. Rhode Island should not be building a new state police barracks at this time.

4. Establish a commission or commissions to oversee and monitor contracts. Performance on state contracts or lack thereof is costing taxpayers millions. I would look to private citizens to assist the state with this, not public employees or legislators (more on contracting issues in a future post).

5. The Office of Personnel Management must develop a minimum staffing level plan. The personnel office should develop this plan to assist with rightsizing efforts in government. The plan could establish a base line so government can ensure that jobs get done. There is Federal money out there at risk that citizens know nothing about. While past plans have been done, a new approach here is needed. Under no circumstances should the plan be prepared by consultants. We pay state employees, they can develop a plan.

6. Strengthen the public employee pension system. I would recommend working with the unions and ask for some sacrifice without demeaning the workforce. As an example, I would allow options for the employees. I would ask all new hires upon entering the workforce to increase their contribution level to 10.5% if they want the 3% COLA upon retirement. I would ask state employees, who already pay the highest contribution levels in the country to increase contributions from 8.75% to 9%. I would keep teachers at their current contribution levels. I would establish by law that the state must always match contribution levels dollar for dollar capped at 9.5%. I'm aware that state contribution levels today far exceed the 9.5% cap because of the past practice of stealing from the fund to pay for budget balancing. I would seek additional ways to deal with unfunded liability (more on this in a future post).

7. I would make sure that state money goes to state infrastructure. No taxpayer money should be used to build, or maintain any private business. A revolving loan fund is fine, but it needs to be a loan. I would never use taxpayer dollars to fix the Civic Center (this should be a going concern with appropriate resources derived from events - How many times do we have to fix this?), no more building of Westin Hotels and shopping malls. These are all fine things but this is not the responsibility of taxpayers. I know this requires a change in the culture in this state, but enough is enough.

8. I would repeal the tax relief for those making over $250,000 that the governor signed into law at the beginning of his administration. I would give strong consideration to establishing personal property taxes on the large boats around Narragansett Bay. I would lower the sales tax to 5% and broaden its base. I would oppose 5% sales tax on car repairs and home repairs.

I'm sure that the governor would laugh at some of these ideas as well as many of our Democratic legislators, so this is not a Democratic or Republican thing. I just feel that there are many other ways to deal with our problems in this state. As Barack Obama has said: "They just have it wrong". Trickle-down Reaganomics has gotten us into this mess, it will not get us out of it.

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1 comment:

  1. I agree with this --state and municipal workers should not be demonized as the problem! Also, I believe we are all in this together and I am willing to sacrifice a little for the common good. What is wrong with the very wealthiest not getting huge tax cuts/breaks when the average person does not!!!!!