By Stephen Winham
It recently came to light that the Jindal administration is in the process of spending $4 million on a contract with the New York management firm of Alvarez and Marsal to identify cost savings in Louisiana government. Some of us who have been around awhile thought, “This has to be a joke!”
When I was state budget director, I did research on the many blue ribbon commissions created over the decades to do exactly what this $4 million is supposed to buy. I found evidence of such efforts going all the way back to the Earl Long administration.
Every study I found had included input from the private sector. In the early stages of the Roemer administration (actually beginning before Gov. Roemer took office) a team of private sector CPAs and management specialists spent many months poring over the practices of every executive department and making recommendations for changes.
Most recently, in 2009, the Commission on Streamlining government made 238 solid recommendations to make state government more effective and efficient – and most of these were implemented.
This commission was made up of legislators, executive branch officials and representatives from the private sector. Its report is a reflection of the very thorough job the commission did and its report may be easily found at: http://senate.legis.state.la.us/streamline/default.asp
The executive administration program of the Governor’s Division of Administration has some 700 employees and a budget of over $75 million. Among its most important functions is ensuring the efficient and effective operation of state government. The Louisiana Legislature has a Legislative Fiscal Office and each house has its own fiscal staff focused on state spending. Each executive department has an undersecretary whose role is to advise the governor directly on these matters. Every employee in state government has some insight into how things might be better managed.
So, with all these resources right here and right now and all the proof that state operations have been studied and re-studied inside and out, are we to believe a New York firm is going to come in and save us? As Buddy Roemer often said, “Give me a break!”
In a February 22, 2013, AP wire story, Commissioner of Administration Kristy Nichols defended the use of patchwork funding in the governor’s budget proposal on the grounds that presenting a budget based on the official revenue forecast would result in “needless reductions of critical services.” Clearly she was saying that, given Gov. Jindal is committed to not raising taxes on anything or anybody, we can either pretend we have a balanced budget or we can cut spending.
Are Alvarez and Marsal going to find some magical ways to reduce spending that aren’t going to hurt anybody? Most certainly not. Are they going to be scapegoats for the cuts that have to be made? Perhaps. And, if so, think of what this says about the courage of our leaders when it comes to making hard decisions.
Finally, IF any money is to be saved by any means, shouldn’t it be directed toward resolving our $19 billion in retirement system unfunded liabilities? Our $12 billion in highway needs? Our $6 billion in general obligation debt? Our $1.7 billion in higher education deferred maintenance?
I have one word for this $4 million expense – STUPID.
Mr. Winham, former Louisiana State Budget Director, lives in St. Francisville, Louisiana. He presently does volunteer work for several non-profit corporations in West Feliciana parish, most prominently Arts for All where he is secretary and Vice-Chair of a committee responsible for mounting a large annual literary symposium.