Downsizing Bureaucracy

by Jeremy Alford

Lt. Gov. Mitch Landrieu has launched a management program to cut red tape, kill duplications and streamline operations. Is state government really ready for this?

In the post-hurricane political climate, it's practically impossible to find anyone who doesn't support a more responsive and less bureaucratic government. But to make it all happen, to eclipse antiquated systems and bury the notorious good-ol'-boy network, a process must be undertaken that is easier preached than carried out.

Just ask Lt. Gov. Mitch Landrieu, who is slated to announce his candidacy for mayor of New Orleans after the special session. When Landrieu left the House of Representatives in 2004 to take over the state's No. 2 post, he wanted change ' not quick and hurried change, but a complete and total transformation of state government.

No longer would time be spent on across-the-board cuts. Funds would be shifted around to what each division of culture, recreation and tourism in Landrieu's office deemed as top priorities. Division heads would have to make "offers" and "counter-offers" for their budgets and programs, competing against other division heads for funding.

It's a back-and-forth bartering process that has been used in some form or fashion by big business for decades, and it's a procedure that Landrieu wants implemented statewide.

The lieutenant governor says he can still hear his staff sighing, and see their eyes rolling, when he first dropped the bombshell. They thought he was crazy and overly ambitious and eager for an accomplishment. After all, they were accustomed to management dribble ' every administration seems to come in spouting something or another.

"There was tremendous resistance when we first got there and implemented this," Landrieu says. "Change often comes very hard, and people are suspicious of change early on."

But the tide is finally turning and Landrieu has been touring the state announcing the dramatic overhaul. The "budgeting for outcomes" process will be presented to the Legislature ' for good or ill ' later this spring and the body could kill the program if they so choose.

The new budget was compiled before, during and after last year's hurricanes ' and in the midst of severe cuts. During every step of the process, it was clear that a major change was needed, says Angèle Davis, secretary of the Department of Culture, Recreation and Tourism, and the point person overseeing the plan.

"When you talk about a state department whose general fund has been cut by 25 percent, you can't keep doing things that have always been done," she says.

Three parks have lost funding under the new budget, as have three welcome centers. A program that provides new books to state libraries was also axed.

On the other hand, parks with low costs per visitor, no matter their attendance rate, were funded. A "Louisiana Marketplace" is being created to sell local products online and an international marketing program is being pursued.

"We're becoming more entrepreneurial, customer-focused, making programs work for the taxpayers and looking for the biggest return on our investments," she says. "Offers from our divisions had to be efficient to stay alive, and many of the more creative offers focused on economic recovery."

But the operational overhaul is much more than budgeting. A new management plan has also been put in place that strives to boost accountability, establish result-oriented performance and change the overall culture of the department.

Early on in the planning process, the department picked a few areas that needed immediate improvement. The steps are referred to as "quick wins." While the changes that transpired were somewhat simple, Davis says they set the tone for how future goals might be approached.

"[State] workers are not used to having the freedom to make recommendations to improve processes," she says. "But once they are empowered to ask why they do certain things, or why something operates a certain way, they do so. It's an analytical approach."

For example, it used to take 27 days for parks, welcome centers and trade shows to request and receive informational material from the department. By examining the process, the staff cut out a few middlemen, converted to an e-mail system and sent requests directly to the distribution center. Not only did the changes cut the turnaround time down to just a few days, but it also saved the department $43,000 annually.

The new budgeting process and management plan came as a result of a study the department conducted with David Osborne of the Minnesota-based Public Strategies Group. Osborne, who has written five books on reinventing government, is a guru of sorts when it comes to this kind of work.

"Bureaucracy is the excretion of a thousand rules and a thousand steps," he says. "They build up over time. The reasons they are not routinely weeded out is because there is no competition. Private companies have to do this stuff or die."

Making government run more like a business is a mantra that has been around for decades. The end results, however, have been varied and Landrieu's team is hoping not to repeat history.

Former Vice President Al Gore, who Osborne once consulted for, took up the reinventing government fad in the early '90s. Robert McNamara implemented statistical budgeting guidelines in Washington, based on a formula used by Ford Motor, and former President Jimmy Carter was a champion of zero-based budgeting. None of these attempts ever took hold in a real way.

More recently, former Gov. Gary Locke of Washington ' who Landrieu and Osborne cite as a success ' implemented a priority-based budgeting system in 2002, only to find himself with a $1 billion deficit two years later and a massive tax proposal to fix the problem.

Landrieu says Washington's fiscal woes cannot solely be blamed on the budgeting system or Locke's efforts to reinvent government. It's like comparing apples to oranges, he adds. Louisiana is facing an uncertain future due to the hurricanes and a governmental revolution must be pushed forward.

"This is not just about saving money," Landrieu says. "This is about transforming government."

While it might not be just about saving money, the program isn't cheap. Osborne says he was paid an initial, one-time $50,000 consulting fee when the process began two years ago, which didn't require a bidding process. Then, based on bids submitted for the plan he helped create, Osborne's firm was awarded a competitive $700,000 two-year contract, which is in its final term and includes an option to renew beginning in 2007 if needed.

Based on several cost-cutting measures by Landrieu and his staff, the savings ' in excess of $150,000 right now ' do not yet outweigh the costs, and the program has been an additional burden on the departmental budget, as any new program would.

When asked for a cost-benefit analysis of the expenses related to the program, Landrieu attempted a forward-looking assessment: If the program proves to be successful for his department, and other areas of state government pick it up, then the resulting savings would significantly outstrip the price tag.

"That's the whole idea here," Landrieu says. "The idea is to use the department as an example of how every other department can be run more efficiently."

But before any of this can happen, Landrieu and company must first get by the Legislature, which includes members with pet projects that have been cut by the priority-based budgeting system. Lawmakers will also have to find ways to deal with the impacted constituencies and other departments will have to show some willingness to adopt the program.

"We have turned the old process upside down," Davis says. "If people don't understand what we're doing or don't support the process, they could make trouble for us. But the process we use makes sense. We're making state government more competitive."