Since 2008, the NGA Center for Best Practices (NGA Center) has been reviewing state government redesign effort as states recover from the economic downturn. Some of these efforts have been described in other NGA publications, namely, The Big Reset: State Government After the Great Recession (February 2010) and again in State Government Redesign Efforts 2009 and 2010 (October 2010). This brief provides an overview on state redesign efforts occurring in 2011, building on those two earlier publications, occurring in several areas:
- Health: Governors are moving to control Medicaid cost growth and to change the way the health care system is governed. For example, Governor Martin O’Malley created the Maryland Health Quality and Cost Council to coordinate quality and cost initiatives among medical groups, insurers, health insurance exchanges, state and local entities, advocacy groups, and other stakeholders in the state.
- Corrections: Many states are enacting sentencing reforms for certain low-level offenses and improving community-based supervision of offenders—all with the ultimate goal of closing prisons. As an example, Kentucky enacted a law to reverse its rising prison population by diverting drug offenders into treatment rather than prison and reinvesting the savings in drug treatment costs.
- K-12 Education: Some states are reforming the governance of education, as well as improving performance and efficiency of K-12 schools by means such as consolidating school districts. States are also changing teacher compensation and tenure laws. Moreover, some states are moving to enhance the governors’ ability to manage K-12 policy. Oregon, for example, enacted a law that designates the governor as the education superintendent for the state.
- Higher Education: Some states are streamlining the higher education system, modernizing funding models, and improving accountability standards. As an example, Connecticut will consolidate the management of the state’s four public universities and 12 community colleges under a single entity next year, which will be responsible for developing a new formula to distribute funding to the institutions based on certain policy goals.
- Transportation and Infrastructure: Governors are finding innovative strategies to invest in transportation and infrastructure despite budget shortfalls, including public private partnerships. For example, Ohio now allows private funding to be used for public infrastructure under partnership with the state.
- State Workforce: States are continuing to downsize their government workforces and adjust public employees’ compensation to ensure greater sustainability. Some states, for example, are instituting layoffs and hiring freezes and reviewing the manager-to-employee ratios within state agencies. Some states are also cutting their state employees’ pay, including the pay of top officials and governors.
- Pensions and Benefits: A number of states are increasing state employees’ contributions to pensions, improving effectiveness in the pension system, and modifying health benefits for current state employees. Missouri, for example, is now asking employees to contribute to their retirement plans for the first time in the state’s history. States are also seeking to improve the effectiveness of their state pension systems by closing loopholes and correcting other inefficiencies.
- Downsizing and Streamlining: Where available, states are consolidating and eliminating state entities, selling assets, and streamlining rules and regulations. Tennessee, for example, has launched a top-to-bottom review of state government boards, commissions, and agencies for consolidation or elimination; also under review are all regulations, to be followed by a cost-benefit analysis of any that are identified as burdensome.
- Revenue Management and Collection: Finally, several states are acting to improve their revenue management and collection and to examine state tax expenditures to recoup forgone revenue. In the summer of 2011, many states launched temporary tax amnesty programs to enhance collection, for example. Oklahoma Governor Mary Fallin launched a review of all state tax expenditures, with the intention of keeping only those credits that are creating jobs.