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The State Budget and Structural Reform, Part 4

Aug 18, 2015
Editor’s Note: Throughout this year’s debate on the FY 2016 - FY 2017 biennial budget, the MetroHartford Alliance advocated for structural reforms that would establish a fiscal foundation supporting private sector job retention and growth as well as capital investment. In communications to policymakers and public forums on the budget, the Alliance continually stressed the need to adopt lasting, real reforms to bring sustainability to our state’s budget, such as those developed by the Connecticut Institute for the 21st Century. The Institute was formed in 1997 when public and private leaders in Connecticut came together to exchange ideas about increasing the state’s economic growth and competitiveness. The group focuses on informing policymakers on key issues that hold the most potential for the state’s future. 

We are encouraged that the budget implementer includes language that directs the Secretary of the Office of Policy and Management to review the reports of the Institute and submit recommendations to the Governor and the Legislature’s Appropriations and Finance, Revenue and Bonding Committees.

In the interest of providing more details on the structural reforms for which the Alliance has advocated – both those of the Institute and others – we are sharing regular updates with our Investors.

Improving the Delivery of Public Services in Connecticut

Connecticut has a public service delivery system characterized by a proliferation of structures that lack coordination and consistency. These structures were developed over time to meet immediate policy concerns that do not reflect 21st-century reality.  While no single system is correct for all service delivery – e.g., child nutrition programs are different from workforce assistance or economic development services – Connecticut has an ineffective myriad of state, local and education structures that are excessive, overlapped, non-aligned and competing for the same precious dollars.

Why should we reform the delivery of public services?

Public spending is outstripping economic growth. Over the past several years, state and local expenditures have grown faster than both gross state product and median personal income.  Efficient and effective delivery of public services is a factor when businesses decide where to invest. Business owners and leaders look for value: a factor of price and performance. They look for a business environment that is stable and for consistent public leaders and policies. Price, performance and predictability are a trifecta for states that wish to compete for investment and skilled workers.

What needs to be done?

Connecticut’s leaders must recognize that the short-term fixes used over the past decade (e.g., budget shifting and service and payment deferment) have reached their limits.  Additionally, policymakers should increase taxes and other revenues only after the State has achieved efficiencies by creating a more effective system to manage public resources. 

Our State needs a more systemic approach, based on best practices identified from other jurisdictions and from programs and localities right here in Connecticut. By changing how local governments and education districts operate and how the State interacts with these jurisdictions, scarce resources can be freed to meet Connecticut’s pressing priorities, saving taxpayer dollars and getting better results. 

Change is difficult, but we must achieve change within the unique historical and cultural context of Connecticut.  Creating a rational system of service delivery that uses benchmarks and constant measurement – at the state, regional and local levels - will result in greater effectiveness and improved performance.  

Some specific recommendations include:

• Efficient purchasing in the public sector. Best practice research shows that other states are better aligning spending on goods and services with strategic plans, using strategic sourcing and directing supply managers to plan, manage and develop the supply base in line with strategic objectives. While regional cooperative purchasing now covers some of Connecticut’s towns and cities, and some statewide purchasing opportunities exist, much more remains to be done.

• Shared services to reduce overhead and provide direct benefit. Our State should create a shared-services strategy to support state and local government and preK-12 public education. Advances in information technology allow more flexibility in deciding how to manage service delivery. High-speed broadband and sophisticated management software can help state and local governments do more with less, from disaster recovery to education to finances. Harnessing this newfound capacity within a shared services enterprise and extending it enterprise-wide may enhance both performance and public value.

• Education reform and accountability. A streamlined, more accountable education system would help make Connecticut more competitive. We could achieve considerable efficiencies and greater effectiveness by looking at the scale of delivery of educational programs. CT21 particularly endorses greater regional cooperation and delivery of services through existing or new regional structures.

• Continue to implement a uniform chart of accounts and provide transparency in, and access to, public data. Connecticut does not have a history of using data effectively to support public policy change or public service improvements.  Our State also has struggled with data that is not presented in a common format with common definitions and that cannot be utilized across agencies – even when serving the same clients.  By continuing to implement a Uniform Chart of Accounts (UCOA) for local governments and preK-12 school districts, Connecticut could analyze service delivery costs and create benchmarks. Government accountability and transparency would be enhanced by allowing all stakeholders to better understand and evaluate service delivery.  Data, information and measurement are critical to the successful realization of strategic goals, whether at an organizational, town, regional or state level. 

• Redefine regional structures and enhance incentives for cooperative approaches to service delivery. While Connecticut has a well-known fascination with home rule for towns, our State should encourage and incentivize regional cooperation. Regional structures should be strategic, consistent in structure and governance for delivering services, and governed by elected officials that represent the constituencies being served. 

• Connecticut must provide resources to enable change and break down state agency silos. Government is organized in silos, but people live across silos. It is easy to comment on but very hard to reconcile these two realities. Connecticut must break up program silos and align and maximize state investments.  State funding is seldom targeted toward a unified goal or outcome – be it cultivating regional business clusters, revitalizing neighborhoods or helping low-income families – but rather addresses one or another small component of these desired outcomes. Our State cannot expect to improve its metropolitan regions and its prosperity without intentional, aligned, cross-agency efforts that target unified community outcomes. 

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