Former Louisiana budget director asks: $4 million for what?

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.

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14 thoughts on “Former Louisiana budget director asks: $4 million for what?

  1. Stephen Winham is a very intelligent gentleman who served this state very well for many years. He has always had the state’s, and its citizens, best interests at heart while doing a most excellent job. Perhaps his note will inspire or coerce our leaders into action to do something about this travesty.

  2. It’s a standard tactic: if you want to do something controversial, get an outside consultant to pretend to come up with the idea. Do you have any ideas about what Alvarez and Marsal have been told to recommend? Process of elimination suggests it will not include any tax increases, any reduction of handouts to businesses, etc. What’s left?

  3. We have had an Alvarez & Marsal representative at EA Conway (University Health) in Monroe since September, probably many more at LSU Shreveport. I’m wondering how much that has cost the state.

    • THE EXISTENCEOF THE A&M CONTRACT WAS DELIBERATELY REVEALED LAST FRIDAY. AS THE PERSON FROM E.A.CONWAY HOSPITAL ABOVE SAID, AND THIS COMMENTER SAID YESTERDAY, THE CONSULTANTS HAVE BEEN “VISITING” ALL STATE AGENCIES SINCE LAST SEPTEMBER.

      Staff in my agency have been working for months to provide the detailed financial and performance data the A&M consultants have been requesting. I myself met with a specific content area consultant several weeks ago.

      The big question to ask is WHY the Jindalistas just revealed the existence of a contract that has been in place and operational for several months, What is really going on? This is not news to people in agency management.

  4. The office I worked for always used committees made up of expertise of what the issue was, as well as agency staff. We never had money for contracts. These Jindal people have done so much damage to the operations of La. State government. I agreed with the previous post, Mr. Windham served the State very well as Budget Director for many years. I hope he continues to write articles and comment on other articles. He speaks the truth, and that is what the citizens of La. need to hear.

  5. 4 million to find ways to streamline the state’s spending? That’s like spending 4 millions to find out what killed JFK.

    Any chance the Alvarez and Marsal we are trying to pay 4 million dollars is connected to the Alvarez and Marsal PAC? Check out the “contribution sources”.

    http://us-campaign-committees.findthedata.org/l/9863/Alvarez-And-Marsal-Holdings-Llc-Pac

    Seems a little fishy to me. I’m no political insider though. Of course, I’m not a veterinarian either-but I know horse crap when I smell it.

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