Welcome to government efficiency.
On Nov. 11, officials from Gov. Bill Richardson’s office released a revised estimate of New Mexico’s budget shortfall. Previously thought to be approximately $260 million, Richardson’s staff now puts the number at $452 million, sending most of the state into a frenzy of worry.
For former Republican New Mexico Gov. Garrey Carruthers, though, it’s familiar territory. Carruthers, who is also the dean of New Mexico State University’s College of Business, has been working on proposals to streamline state government since last December, when Richardson appointed him chairman of a Committee on Government Efficiency. In January, the committee released a report outlining ways to save approximately $129 million through government reduction and restructuring.
Gov.-elect Susana Martinez also tapped Carruthers as chairman of her own Government Efficiency Task Force, which Carruthers says aims to have a report out next month.
Brian Moore, the former Republican candidate for lieutenant governor recently named as Martinez’ deputy chief of staff, tells SFR that the incoming administration has far from made up its mind on where to implement cost savings.
“Whatever I said would be a lie because we just haven’t really come to any kind of consensus,” Moore tells SFR. “It’s still pretty early for us.”
But restructuring has been on legislators’ radar since April, when the interim Government Restructuring Task Force began meeting. It, too, is due to release a comprehensive report this month.
State Rep. Luciano “Lucky” Varela, D-Santa Fe, says the task force’s proposals to merge cabinet departments and abolish defunct agencies is about more than saving money.
“Hopefully, [people] will be able to get as good or better services when we streamline government,” Varela tells SFR. “That’s our main purpose.”
Even Carruthers’ January report, which included sweeping reforms to the traditionally sacrosanct budgets of education and Medicaid, yielded only $129 million in savings—hardly enough to close the gap.
“Many of the restructuring items are not really big-ticket items, but they’re good management items,” he says.
Take, for instance, the creation of a new Department of Commerce. According to Carruthers’ report, creating a new agency that combines the functions of the departments of Economic Development, Workforce Solutions and Tourism (as well as the state’s Workers’ Compensation Administration, Border Authority and Spaceport Authority) would save the state approximately $4.2 million—a relative drop in the bucket. But New Mexico’s ability to attract economic development also depends on the relative ease of doing business here. Consolidation would help, Carruthers says.
“Under a Department of Commerce, you’d put many of those functions in one place,” he says. “You become much more customer friendly and much more supportive of the business sector than you would if you make them go to five different places to solve their problems.“
Task force member and state Sen. John Arthur Smith, D-Hidalgo, also points out the benefits of the “intangible savings” to be gained by better efficiency. Even so, Smith says, there’s resistance to nearly every suggestion of change.
“There is a steady drumbeat from different advocacy groups: ‘Don’t change me; change somebody else,’” Smith says. “We wanted the departments to step up and show us how we can generate more efficiency and savings for the state,” he adds. “To my way of thinking, that hasn’t happened.”
At its Nov. 18 meeting, the task force circulated a flier outlining objections from those departments potentially on the chopping block. (Both Varela and Smith caution that none of their proposals are set in stone; much will be determined in the 2011 legislative session, which begins in January, and by the new administration.)
The Tourism Department warns that consolidation could lead to higher administrative costs. The Department of Game and Fish, the flier reads, worries that a merger with the state’s Energy, Minerals and Natural Resources Department could jeopardize federal funds. The Public Defender Department cautions that including its budget within that of the Corrections Department could give the latter undue control over public defenders—who often litigate against Corrections.
But sooner or later, the truth will become clear, Smith says: “We just can’t fund government the way it’s always been.”
This week, SFR breaks down the specific proposals.
Out with the Old, In with the New
The state Legislature can’t abolish the scandal-plagued Public Regulation Commission on its own—the only way to get rid of it is via a constitutional amendment approved by New Mexico voters—but one of the task force’s recurring ideas involves passing a Senate joint resolution to get that amendment proposal on the ballot. Another draft bill then recommends the creation of a legislative committee to examine how the PRC’s responsibilities—such as vetting utility rate increases—could be transferred to the executive branch. The proposed Department of Commerce—a one-stop shop for businesses operating in New Mexico—would employ approximately 1,200 full-time employees and save the state $2.6 million in personnel costs for exempt employees.
Mergers and Acquisitions
If cabinet positions—of which there are 24—are any indication of government growth, then eliminating them is a natural (and symbolic) way to trim. Several different legislative proposals call for stripping cabinet-level status from several departments—Game and Fish, Homeland Security and Emergency Management, Aging and Long-Term Services, and the General Services Department—and transferring their powers and duties to larger, more comprehensive departments (Finance, Health, Public Safety). Transferring the administration of Medicaid programs from ALTSD to the Human Services Department, which already handles the bulk of New Mexico’s Medicaid services, would save approximately $1.5 million, according to Carruthers’ January report—more than half of which comes from eliminating “exempt staff with duplicate responsibilities.”
Into the Sunset
If you can’t move it, maybe it’s time to kill it. A draft for a sweeping “Sunset Act” calls for the elimination of more than 175 boards, committees, commissions and task forces, ranging in importance from the Environmental Improvement Board, which has made headlines recently for its proposal to cap greenhouse gas emissions statewide, to the Crime Stoppers Advisory Council, a body that has, according to legislative analysis “very little function” but whose members nonetheless receive per diem and mileage reimbursements.
“For every one of those, there was someone at the time who was championing their existence,” Carruthers says. “That’s not uncommon in government, to have
champions and advocates who put these together—and, when I was governor myself, I probably signed a few of these.”
“There are only four places where there’s money: education, Medicaid, higher education and the prisons,” Carruthers says. Campaign promises aside, the legislative task force is considering delaying employer contributions to the Education Retirement Account—which, according to the task force’s analysis, would have minimal long-term effect while saving the state $18.3 million in the short term. Another proposal changes the way higher education funding is calculated.