VACostCutting

Financial Times: "Time to tackle the real evil: too much debt"

2009-07-14T08:48:00.002-04:00

A good look by Nassim Nicholas Taleb and Mark Spitznagel for Financial Times at getting our economy back on track by addressing the problem of too much debt.

The core of the problem, the unavoidable truth, is that our economic system is laden with debt, about triple the amount relative to gross domestic product that
we had in the 1980s. This does not sit well with globalisation. Our view is that government policies worldwide are causing more instability rather than curing the trouble in the system. The only solution is the immediate, forcible and systematic conversion of debt to equity. There is no other option.

And while some in Congress have simply tried to "fix" things with various government "stimulus" packages, the authors argue that this is simply making the problem worse.

Invoking the pre-internet Great Depression as guidance for current events is rresponsible: errors in fiscal policy will be magnified by this kind of thinking.
...
The only solution is to transform debt into equity across all sectors, in an organised and systematic way. Instead of sending hate mail to near-insolvent homeowners, banks should reach out to borrowers and offer lower interest payments in exchange for equity. Instead of debt becoming “binary” – in default or not – it could take smoothly-varying prices and banks would not need to wait for foreclosures to take action. Banks would turn from “hopers”, hiding risks from themselves, into agents more engaged in economic activity. Hidden risks become visible; hopers become doers.
It is sad to see that those who failed to spot the problem (or helped to cause it) are now in charge of the remedy. Just as the impending crisis was obvious to those of us who specialise in complexity and extreme deviations, the solution is plain to see. We need an aggressive, systematic debt-for-equity conversion. We cannot afford to wait a day.

For the full article, visit the Financial Times online.

Congressman Cantor: "Health Care Shakeup Will Make Things Worse"

2009-07-13T09:23:00.002-04:00

Virginia Congressman Eric Cantor had a guest commentary run in this weekend's Richmond Times Dispatch, titled "Health Care Shakeup Will Make Things Worse," and it is definitely worth a read.

Mr. Cantor makes many good points about the different health care reform plans that have been proposed. And he concludes:

Health care reform is too complex and important to the American people to be rushed through Congress. We must be thoughtful, deliberate, and act in a bipartisan fashion so that we get this right once and for all. But turning to government instead of empowering doctors and patients is not the way to accomplish our goals.

And he is absolutely right. Health care reform is important but it is also very complex, and rushing through a plan that hasn't been well-thought out and one where the consequences have not been fully examined is dangerous and not good policy. And Americans deserve better.

Read the full article from the Times Dispatch here.

In more positive news....

2009-07-10T14:52:00.003-04:00

Perhaps the federal government needs to take a look at how we do things here in Virginia to learn how to increase transparency for a lower cost... (okay, that's not the only lesson they could learn from Virginia- the #1 best managed state, but that's another post entirely...)

The Heartland Institute reports...

Virginia taxpayers scored a big win in the 2009 General Assembly session ... [with] a bill putting more of the state’s budget and expenditures online in a user-friendly format easily accessible to the general public.

Now that's great news in and of itself. Making it even better? The pricetag.

Early in the legislative session the bill faced serious opposition from all parties when the Department of Planning and Budget hung a $3 million price tag on it. However, Cuccinelli worked closely with Virginia’s auditor of public accounts, Walter Kucharski, to eliminate any financial impact or additional burden on taxpayers.

Government spending transparency? No added costs to taxpayers? Priceless.

And this is health care "reform"???

2009-07-10T09:00:00.003-04:00

They "say" that they are trying to "reform" health care and insure more Americans. So why are their billions of dollars being spent on pork projects?

Sweeping healthcare legislation working its way through Congress is more than an effort to provide insurance to millions of Americans without coverage. Tucked within is a provision that could provide billions of dollars for walking paths, streetlights, jungle gyms, and even farmers’ markets.

And while we are fully in support of encouraging individuals to take more responsibility for their own health through healthy lifestyle choices, we think that there are other ways to do this- rather than the federal government spending BILLIONS on new playgrounds and streetlights, as Senator Mike Enzi has been trying to tell Congress.

Enzi has said that instead of paying for pathways, it would be more effective to encourage lower insurance premiums for individuals who can prove they have taken steps to improve their health. He said that construction grants belong in other bills.

Exactly.

But then again, what did we expect when government gets involved? They aren't exactly known for their efficiency and cost-effectiveness.

Government Efficiency

2009-07-09T14:09:00.003-04:00

"$18M Being Spent to Redesign Recovery.gov Web Site"

Seriously!? $18 million to redesign a website? While we are all for transparency, $18 million seems a bit pricey for a new website. We must be in the wrong line of work...

That's government efficiency for you, folks!

FREE Money... scary

2009-07-09T10:20:00.000-04:00

Watch this: A look at health care reform

2009-07-08T16:05:00.002-04:00

"Improving Virginia’s Transportation without Raising Taxes: It Can Be Done"

2009-07-02T10:52:00.002-04:00

Transportation. An on-going issue in Virginia.

In the latest Bacon's Rebellion, John Palatiello takes a look and makes suggestions for addressing Virginia's transportation needs without raising taxes.

We think that is something that's worth a look!

During the last decade, state government spending in Virginia has grown by about 70 percent, while incomes have increased by only five percent. The rate of growth in the Commonwealth’s government exceeds the growth in population and the
cost of living over the same period.
Why then, does Virginia still have a transportation problem?
The answer is clear. Transportation is not a high priority for many of Virginia’s political leaders. This will certainly be an issue in this year’s elections.
In its editorial endorsing State Senator Creigh Deeds for the Democrat Party’s nomination for Governor, the Washington Post said “Mr. Deeds has made clear that he would make transportation his first priority.” Curiously, however, a look at the candidate’s campaign website fails to reveal a plan, position or even make mention of transportation. The Post editorial cites Deeds’ past support for a gas tax increase and the unconstitutional Kaine transportation plan, and Deeds himself touts his role in passing the Mark Warner tax increase in 2004 (none of which went to transportation).
This begs the question: can Virginia tackle its transportation needs without raising taxes?
The answer is a resounding yes. Here are three ways.

Continue reading online.

News Virginian: "VDOT needs outside look"

2009-06-26T09:33:00.003-04:00

It this doesn't paint a picture of government waste, I don't know what does. The Waynesboro News Virginian makes the case for an external audit of VDOT- not as a cure-all - but as an important additional tool to helping control costs and increase efficiency.

Government wastes like a fat man breathes, heavier and more frequently with each step. Few agencies are fatter than state departments of transportation, whose waste may be anything but voluntary. Feeding perpetually on taxpayer money, state DOTs are a traditional repository of raw gluttony, with parasitic legions swarming to nibble and sometimes chomp at bounties of billions of dollars. A query that percolates in the commonwealth: Is VDOT different?

"Shining a Spotlight on Transparency"

2009-06-19T10:39:00.000-04:00

Check out the latest on one of our favorite topics: Transparency, from Bacon's Rebellion,

The legitimacy of government is based on the consent of the governed. As owners of our state government, every citizen of Virginia is entitled to full and complete information about how their government acts and what their Representatives do. If we cannot keep ourselves informed on the workings of our government, we cannot retain control over our government.

Read on...

Diligence and Creativity Needed

2009-06-17T08:53:00.001-04:00

Virginia's budget gap continues to widen- and while this will present challenges, it should also provide legislators the opportunity to continue to examine commonsense, cost-saving measures to help protect core services while also reducing the overall costs of government.

Maybe it's time to again bring out those Operational Review Reports and continue to look for new ways government can do better for less!

In Case You Missed them: Operational Reviews

2009-06-01T09:30:00.003-04:00

We wanted to once again post the Operational Review Reports- since some folks had contacted us with questions. This time we figured we'd just post all the links in one post, so that they are a big more easily accessible.

Stay tuned for more news and updates from the Cost Cutting Caucuse!

----------------------------------------------------

Virginia's Experience with Operational Reviews

Energy Operational Review Report

Accounts Receivable Operational Review Report

Printer, Copier, and Paper Operational Review

Mail Operational Review Report

State Travel Operational Review Report

Fleet Operational Review Report

"McDonnell: Hold down tuition by cutting costs"

2009-05-15T16:11:00.000-04:00

Cost savings in higher education, from the Times Dispatch.

Bob McDonnell, the presumptive Republican nominee for governor, says Virginia's tax-supported colleges and universities can hold down tuition by cutting expenses.

"Roanoke Schools Embrace Privatization to Cut Costs, Focus on Education"

2009-04-20T14:13:00.000-04:00

Tough economic times do encourage governments to think outside the box, and often that means taxpayers save.

States and municipalities are not alone in facing tremendous fiscal pressures these days. School districts nationwide are being forced to cut costs to respond to the challenges of budget shortfalls and declining tax revenues.

In this context the Roanoke school board’s recent decision to contract out school transportation services is a notable development that other Virginia school districts should watch closely, as it offers a timely reminder that privatization can be a powerful tool to help “right-size” school districts and keep them focused on their core mission of educating children.

Last week, the Roanoke city school board voted to contract with a Pennsylvania-based bus company to provide transportation services; the board estimates this will save the school district approximately $250,000 annually. In addition, the company will purchase the district’s fleet of roughly 150 buses and will acquire 15 new buses every year to replace the aging stock over time. The district’s current drivers who meet minimum standards will be offered positions with the company.

Read on from Bacon's Rebellion....

High costs

2009-01-30T12:32:00.002-05:00

Okay, so our name is VA Cost Cutting, and yes, normally we talk about cost-savings measures (or at least measures to increase transparency and accountability). But today, we want to mix things up a bit, and talk about some things that cost Commonwealth (and Virginia taxpayers) lots of money.

Namely, what is the cost of high school dropouts?

Educational attainment has become a hot topic for many reasons, but one thing that is often overlooked is the fiscal impact of students not completing high school.

The researchers at the Friedman Foundation have looked into this impact in several states. And, to be true to our cost-cutting theme, they also look at how much state's could save by implementing school choice and increasing their graduation rates!

The High Cost of Maryland’s Dropout Rate

We examine how Maryland’s decreasing graduation rates are materially affecting the state’s finances through reduced tax revenues, increased Medicaid costs and higher incarceration rates. This study examines how increased competition from private schools could raise public school graduation rates and save Maryland taxpayers millions of dollars each year.

The High Cost of Low Graduation Rates in North Carolina

It finds that each dropout costs the state $4,437 per year in lost tax revenue and increased Medicaid and incarceration costs, every year for the rest of his or her life. Each year’s class of dropouts costs the state $169 million every year. A modest school choice program, increasing private school enrollment by 4 percentage points, would improve public school graduation rates, reducing dropouts by up to 5,483 students per year, saving North Carolinians up to $24 million in tax revenue, Medicaid costs and incarceration costs every year.

The High Cost of South Carolina's Low Graduation Rate

It finds that each dropout costs the state $3,228 per year in lost tax revenue and increased Medicaid and incarceration costs, every year for the rest of his or her life. Each year’s class of dropouts costs the state $98 million every year. A modest school choice program, increasing private school enrollment by 6 percentage points, would improve public school graduation rates, reducing dropouts by up to 1,549 to 3,137 students per year, saving South Carolinians between $5 million and $10 million in tax revenue, Medicaid costs and incarceration costs every year.

Cost Cutting Virginia's Budget

2009-01-29T10:40:00.002-05:00

We've already mentioned some of the 2009 bills up in the General Assembly aimed at saving the Commonwealth money or increasing transparency and accountability in state government operations. Now, how about a look at the budget?

To view proposed amendments to the budget on the House side, click here.

To see Senate budget requests, click here.

(For information on the Governor's recommendations, click here.)

We'd love to hear your thoughts on any of the proposed amendments, or let us know how you'd cut the budget!

Updated: Some more 2009 bills

2009-01-28T14:18:00.003-05:00

HB 1674 Workers' Compensation; pharmacist filling a prescription to dispense therapeutically equivalent (Delegate Harry Purkey)

This legislation should reduce the cost of prescriptions paid by the State Employees Workers’ Compensation Services. (Fiscal Impact statement)

SB 893 Submission of executive budget; personnel costs for state agencies. (Senator Ryan McDougle)
Requires the total amount appropriated for personnel costs for each agency to be included in the Budget Bill for each agency. The bill also provides that the amount appropriated to each agency for personnel costs shall only be used for personnel costs and that any appropriation set aside for personnel costs that remains undistributed at the end of any fiscal year shall revert to the general fund of the state treasury.
SB 1542 Alcoholic beverage control; privatization of ABC stores. (Senator Mark Obenshain)
Provides for the auction of "package store" licenses to authorize the retail sale of alcoholic beverages for off-premises consumption. The bill also requires the ABC Board to sell or transfer all interest in real property utilized in the wholesale and retail sale of alcoholic beverages. The bill requires the ABC Board to set a fixed number of licenses for all localities, which shall be at a minimum one license for each locality of the Commonwealth and shall not exceed one license per 10,000 residents of the locality. The initial issuance of license by the Board would be through regional auctions beginning July 1, 2010, which may also be conducted through the Department's publicly accessible website. The annual state license tax on package store licenses would be the initial purchase price at auction plus an annual inflation adjustment based on the Consumer Price Index. The tax levied on spirits sold in package stores would be 25 percent of the price charged.

HB 2356 Budget Bill; requires 2010-12 biennium and future bills to be prepared using zero-based principles. (Delegate Todd Gilbert)
Requires the Budget Bill for the 2010-12 biennium and future Budget Bills to be prepared and formulated utilizing zero-based budgeting principles.

HB 2037 Debt Collection Recovery Fund (Delegate Sal Iaquinto)
Establishes the Debt Collection Recovery Fund. The bill also provides that the Division of Debt Collection shall (i) deposit to the Fund all revenues generated by it, less any cost of recovery, from receivables collected on behalf of state agencies and (ii) transfer the remaining funds to the appropriate state agencies on a periodic basis. In addition, the bill provides that final orders of final agency case decisions may be recorded, enforced, and satisfied as orders or decrees of a circuit court upon certification of such orders by the agency head or his designee. Furthermore, each state agency and institution may charge attorney's fees and collection fees on all past due accounts
receivable.

HJ 724 Constitutional amendment; limits appropriations in fiscal year to preceding year's (Delegate Todd Gilbert)
Limits total appropriations in any fiscal year to the preceding year's total appropriations plus a percentage increase equal to the past two years' average increase in the rate of inflation plus the average percentage increase in population. The amendment provides that any revenues collected in excess of the limitation shall be distributed: 75 percent to be refunded to individual income taxpayers and 25 percent to the Revenue Stabilization Trust Fund. "Total appropriations" is defined to exclude moneys appropriated that are received from the federal government or an agency or unit thereof. If the amount in excess of the limitation is less than or equal to one percent of the limitation, the total excess shall be deposited to the Revenue Stabilization Fund if that Fund has not reached its constitutional limit, or if that Fund has reached its limit, the excess shall be appropriated to the general fund.

In Case You Missed It: Virginia Needs to Ditch Unwieldy Two-Year Budget Process

2009-01-27T16:35:00.002-05:00

One thing we are definitely in favor here at the Cost Cutting Caucus is accountability. And we know that one key to accountability is transparency.

Delegates Albert Pollard and Chris Saxman have introduced legislation (HB2092) that would help bring more accountability to Virginia's budget process by shifting to an annual budget cycle, as opposed to the current 2-year budget cycle.

We mentioned their bill here the other week- and the two delegates shared also their views on this proposal in this editorial that ran in the Richmond Times Dispatch.

The write:

As members of opposite parties in the House of Delegates, we realize that revenue shortfalls know no partisan bounds.
While no one could predict Wall Street's meltdown, we believe that a concrete step to bring greater budget discipline to Virginia is the enactment of annual budgets. For that reason, we are co-sponsoring legislation to change Virginia's traditional two-year budget to a one-year document.
...
The argument for an annual budget can be summed up in two words: accountability and discipline.
The two-year budget creates a muddy picture of the state's true finances. For instance, when a headline screams about a billion-dollar shortfall, is it a billion dollar annual shortfall, or is that spread over two years? When a leader talks about a $500 million cut, is it an annual cut or a biennial?

Read their full Op/Ed piece online here.

It it worth repeating, school choice SAVES money

2009-01-23T10:01:00.002-05:00

With this year's budget challenges before the General Assembly, we think it is worth re-iterating yesterday's post about school choice SAVING money.

Yesterday we wrote about the study by the Florida Office of Program Policy Analysis and Government Accountability (OPPAGA) found that "taxpayers saved $1.49 in state education funding for every dollar loss in corporate income tax revenue due to credits for scholarship contributions."

Okay, so you're asking, but what does this mean for Virginia, right?

Well, thankfully for us, the folks at the Thomas Jefferson Institute for Public Policy have already crunched the numbers for us.

No issue is more challenging for the Virginia General Assembly this year than the budget. But while opponents of parental choice argue that a tax credit for corporations offering scholarships for children to attend the public or private school of their choice would drain the state treasury, nothing could be further than the truth. This fiscal analysis -- using the latest Department of Education statistics -- demonstrates how wrong that assertion is. In fact, such a tuition tax credit would have a positive fiscal impact.

Positive fiscal impact?? That sounds like a pretty good thing to us!

Still not convinced? Check out the full report and analysis online.

Still don't believe us that school choice saves money??

2009-01-22T10:08:00.002-05:00

We have said it again and again and again, school choice saves money- something our friends over at School Choice Virginia will agree with.

Florida, a state that has been a national leader for educational reforms and greater parental school choice, has recently taken a look at the fiscal impact of their corporate tax credit scholarship program.

A study, conducted by the Florida Office of Program Policy Analysis and Government Accountability (OPPAGA), released in December 2008, concludes that "The Corporate Income Tax Credit Scholarship Program Saves State Dollars."

The OPPAGA "is a special staff unit of the Legislature created by state law under the oversight of the Joint Legislative Auditing Committee. OPPAGA examines agencies and programs to improve services and cut costs when directed by state law, the presiding officers, or the Joint Legislative Auditing Committee."

From the report summary:

The corporate income tax credit scholarship program produces a net savings to the state. We estimate that in Fiscal Year 2007-08, taxpayers saved $1.49 in state education funding for every dollar loss in corporate income tax revenue due to credits for scholarship contributions. Expanding the cap on tax credits would produce additional savings if there is sufficient demand for the scholarships. The Legislature may wish to consider expanding the program when the level of tax credits awarded approaches the cap and there is a sufficient waiting list of students who could use the scholarships.
Including insurance premium tax credits in the scholarship program would broaden its funding base and increase the probability that the tax credit cap is reached. Currently, not all insurance companies in the state have an incentive to participate in the program.

School choice saves money, and helps kids. Sounds like a smart investment to us!

Shortfalls?

2009-01-20T14:57:00.003-05:00

From a few months back, this is still worth the read. Leonard Gilroy, Director of Government Performance at Reason Foundation, discusses "Closing the Budget Shortfall," over at Bacon's Rebellion.

Virginia must develop more effective tools to systematically evaluate competition and efficiency opportunities across state government.
One logical place to start is with the Commonwealth Competition Council (CCC). An independent advisory body in state government since 1995, the CCC is a bipartisan council charged with providing long-term strategic direction for privatization and competition initiatives. Over the last dozen years the CCC has done excellent work on privatization, identifying and researching a plethora of opportunities to achieve cost savings, service quality improvements, and higher
customer satisfaction.

Show me the money!!

2009-01-20T09:26:00.003-05:00

Movie buffs everywhere will immediately think "Jerry Maguire," but for those of us here at the Cost Cutting Caucus, "show me the money" makes our minds go right to state spending.

It's something we've been hammering on for years (and just as enthusiastically as Tom Cruise and Cuba Gooding, Jr. in their memorable scene). For some thoughts on transparency, see here, here, here, here, and here, just to name a few.

We're definitely all for greater transparency, which helps taxpayers hold government accountable for the tax dollars that they spend. Once again this year, several Virginia lawmakers are pushing for legislation to create more transparency in state spending.

From the NVDaily:

When it comes to taxpayer dollars, government should be completely transparent, according to one local legislator.
Legislation working its way through the General Assembly aims to make sure that happens.
Senate Bill 936, patroned by Sen. Jill Holtzman Vogel, R-Upperville, Sen. Ken Cuccinelli, R-Fairfax, and others would require the state to build a searchable database of all spending in a "format designed to encourage the greatest amount of use by the general public."

Say it with us... "Show me the money!"

The state and retail business

2009-01-19T12:12:00.003-05:00

The Wilder Commission recommended it back in 2002.

The folks here at the VA Cost Cutting blog have talked about it over the years as well (see here and here).

And again this year, Senator Mark Obenshain is introducing legislation that calls for it.

What is it, you ask?

We're talking about getting Virginia out of the retail business of selling alcohol, of course.

Now even the folks over at the News Leader in Staunton are voicing their support.

In their editorial they write:

It's time for Virginia to get out of the booze business.
State Sen. Mark Obenschain, R-Harrisonburg, says the state could make more than $1 billion — including about $700 million in new revenue — by privatizing the business now operated through Alcohol Beverage Control.
It's an idea that makes sense. The stores, the overhead, the payroll, the inventory - all of that would go away under a proposal by Obenschain, turning all but the regulatory part of liquor sales over to private companies.
With the penny-pinching we already see going on across the board, this proposal actually brings money in.

2009 Bills

2009-01-16T12:06:00.004-05:00

As we noted, the 2009 session is underway. Please continue to share your cost savings suggestions and ideas with the Cost Cutting Caucus!

A few bills worth taking a look at for the 2009 session :

HB 1848 Transportation; Auditor of Public Accounts to administer operational performance audit. (Delegate Lingamfelter)

Provides for the Auditor of Public Accounts to administer an operational and programmatic performance audit focusing on the agencies within the Transportation Secretariat. The audit will be conducted by a private management consulting firm with a final report to be completed by December 31, 2009. The goal of the audit is to determine an objective and independent cost savings assessment of the Commonwealth's organizational structure and efficiency of the Commonwealth's transportation programs to provide information to the Governor and the General Assembly on ways to reduce duplication of effort and implement cost savings measures and programmatic efficiencies in the operation of state transportation programs.

HB 1641 Efficiency in Government Advisory Councils; established. (Delegate Bob Marshall)

Establishes an Efficiency in Government Advisory Council for each secretariat of state government to review the operations of the agencies within the assigned secretariat for the purposes of identifying efficiencies and determining specific operational areas where savings may be realized. Under the bill, all recommendations that result in identifiable monetary savings among agencies within the assigned secretariat shall be presented to the Governor and General Assembly no later than November 30 of each year.

HB 2285 Searchable Database Website of Revenue, Budget Item, & Expenditure; Sec. of Technology; created. (Delegate Cline)

Provides for the Virginia Enterprise Applications Program (VEAP) within the Office of the Secretary of Technology to create and maintain a searchable database website containing information on state revenues, appropriations, and expenditures.

HB 2174 Retention of energy savings by state agencies; established. (Delegate Hogan)
The program is required to identify specific measures that the state agency may implement in order to reduce energy expenditures. The Department shall track
the energy expenditures for each state agency and calculate its energy savings,
which shall be reported to the Department of Planning and Budget, the House Appropriations Committee, and the Senate Finance Committee.

HB 2463 Government Efficiency Review Commission; established. (Delegate O'Bannon)
Establishes the Government Efficiency Review Commission to review agencies on an eight-year cycle and advise the General Assembly on the elimination of waste, duplication, and inefficiency on the part of such agencies.

HB 2092 Budget, State; changes from biennial to covering single fiscal year beginning July 1, 2012. (Delegates Pollard & Saxman)
Changes the Commonwealth's budget from a biennial budget to a budget covering a single fiscal year beginning with the budget for the period July 1, 2012, through June 30, 2013.

HB 1965 Public/Private Education Investment Tax Credit; created for business entities making contributions. (Delegate Saxman)

Please note that this list is not intended to be an endorsement of these measures by the Cost Cutting Caucus at this time.

Let the fun begin! (Let us know your cost-cutting ideas for Virginia)

2009-01-14T13:13:00.003-05:00

The 2009 Virginia General Assembly has begun! Legislators get to work in Richmond for the 45-day sprint of a session.

We here at the Cost Cutting Caucus will do our best to keep you in-the-know on everything happening in Richmond, but this year you can watch some of the fun yourself in both the Senate AND the House. (Session generally begins at noon daily)

As things get underway in Richmond, let us know your thoughts about this year's session and your cost-cutting ideas to help cover the budget shortfall.

Universal Preschool?

2008-11-17T12:07:00.000-05:00

Universal preschool: Education Reform or waste of taxpayer dollars?

It is a debate that is taking place across the country, including here in Virginia. The folks at Reason TV take a closer look at the issues in this episode.

"Kevorkian Economics"

2008-10-30T16:40:00.000-04:00

Found this interesting blog post, "Kevorkian Economics," over at RegularFolksUnited.com.

Let's state the obvious simply because no one else will. Investors, small and large, are afraid of Democrat control. Enacting their policies on a sick economy would be like asking Jack Kevorkian to perform your grandmother’s triple bypass. Enacting McCain’s plan is the equivalent of sending grandma to world renowned Johns Hopkins Hospital in Baltimore. You don’t know how long it will take for grandma to get well, but you do know that she will be getting the very best care for a speedy recovery.

Nothing like getting right to the point!

Tax policy affects a million small decisions every day. Recently Miami Dolphins owner H. Wayne Huizenga said the election is affecting his decision on whether to sell his share of the team. Citing Obama’s tax plan he said, "He wants to double the capital gains tax, or almost double it," Huizenga said. "I'd rather give it to charity than to him."
Average citizens are now discussing whether they should take their money out of their 401Ks before Democrats take control of the accounts. Small business owners are bracing for cutbacks. And yes, even Joe the Plumber is wondering whether it is worth it to buy a business. Multiplied, these decisions will continue the economy on a downward spiral.

Tax policy does matter-especially when we want to get our country's economy back on track.

In case you missed it: "Socialism in disguise"

2008-10-29T10:48:00.000-04:00

DE SILVA: Socialism in disguise
Obama's Third-World radicalism
Ian de Silva
Washington Times
Tuesday, October 28, 2008

Intoxicated by the mantra of change, those who support Sen. Barack Obama appear to be gleeful about the new era that would come if he won. But is America
such a fundamentally flawed country that it needs the kind of change that Mr. Obama promises? If you answer yes, then you have no idea how good a country this is compared to the rest of the world.

As a naturalized American who grew up in the Third World and experienced firsthand the economic misery and impenetrable corruption under socialism, I know socialism when I see it - and I see socialism in Mr. Obama's plans. He has skillfully disguised his socialist agenda by an oratorical cloak of populism. So, just as it takes an alert eye to spot the proverbial wolf in sheep's clothing, it takes an experienced eye to spot the incipient but insurgent socialism inside Mr. Obama's agenda.

Why do rich liberals support "spreading the wealth?"

2008-10-27T16:01:00.000-04:00

Maybe because they aren't the ones who end up really footing the bill.

In this great editorial by Richard Rahn in last Friday's Washington Times, "You lose, Soros wins," Mr. Rahn gives us some insight as to why billionaires, like George Soros, support guys who say they will "tax the rich."

Have you ever wondered why billionaires like George Soros financially support politicians who say they will "increase taxes on the rich"?

The answer quite simply is that the tax increases are most often put on people trying to become rich, not those already rich. Hence, the rich, big government advocates can gain far more by "buying" the politicians. The "bought" politicians then provide them with confidential information about administrative decisions, which these donors then use to place big bets in the market, making themselves much richer. If you have deep financial pockets and inside information, you can make huge amounts of money when markets drop.

Surely this can't be happening, right? Mr. Rahn continues, discussing the recent failures of Fannie Mae and Freddie Mac.

As recently as this past spring, House Financial Services Committee chairman Barney Frank, Massachusetts Democrat, and Senate Banking, Housing, and Urban Affairs Committee chairman Chris Dodd, Connecticut Democrat, were claiming both Fannie Mae and Freddie Mac (for which they had oversight responsibility) were fiscally sound and needed no additional regulation. At the same time, many independent financial experts were sounding the alarm about these two government-sponsored behemoths.

It would be in the public interest to know which members of the Democratic leadership, members of Congress, and their financial contributors were selling shares of (or shorting) Fannie Mae and Freddie Mac this year, and of other financial institutions overseen by the congressional Democrats. (Note: In the private sector, if someone with insider knowledge - as Mr. Frank and Mr. Dodd had access to - makes misrepresentations about the health of a company, that person is subject to criminal penalties.) The press should demand full disclosure before Election Day, given the hundreds of billions of dollars the misrepresentations by Messrs. Frank, Dodd, etc. are costing taxpayers.

Full disclosure should be demanded. But we aren't holding our breath for the press to push for that one any time soon.

Regrets? "Not at all"

2008-10-24T14:10:00.000-04:00

Yesterday we shared with you a Wall Street Journal examining the dangerous "spend and tax" policies being proposed by some Democrats in Washington, and on Wednesday we looked at the dangers of Barack Obama's economic policies and a "European-type social democracy."

Again, Obama reaffirms his position on "spreading the wealth around" as a good idea. We disagree.

Spend and Tax

2008-10-23T14:14:00.000-04:00

In another interesting editorial from the Wall Street Journal, we get a glimpse of "Obamanomics," a scary policy of spend then tax, that is pretty well summed up by this headline quote from Barney Frank.

"I think at this point there needs to be a focus on an immediate increase in spending and I think this is a time when deficit fear has to take a second seat . . . I believe later on there should be tax increases. Speaking personally, I think there are a lot of very rich people out there whom we can tax at a point down the road and recover some of the money." -- Barney Frank, October 20, 2008

Scary, right?

Federal budget deficits are not something we obsess about, but eventually this new spending has to be paid for, and Barney Frank's comments only underscore that big tax increases are coming. The prospect of these tax increases is now hanging over the economy like a pall, as investors and businesses wonder where and how heavily an Obama Administration and Congress would strike. The pall is likely to continue well into 2009, as millions of Americans delay their investment decisions until they know how much their after-tax returns are likely to fall.

The Danger of "Fairness"

2008-10-22T09:11:00.000-04:00

In today's Wall Street Journal, Mr. Lerrick a professor of economics at Carnegie Mellon University and a visiting scholar at the American Enterprise Institute, takes a detailed look at how dangerous Barack Obama's tax plan is for America in "Obama and the Tax Tipping Point."

The sequence is always the same. High-tax, big-spending policies force the economy to lose momentum. Then growth in government spending outstrips revenues. Fiscal and trade deficits soar. Public debt, excessive taxation and unemployment follow. The central bank tries to solve the problem by printing money. International competitiveness is lost and the currency depreciates. The system stagnates. And then a frightened electorate returns conservatives to power.
The economic tides will not stand still while Washington experiments with European-type social democracy, even though the dollar's role as the global reserve currency will buy some time. Our trademark competitive advantage will be lost, and once lost, it will be hard to regain. There are too many emerging economies focused on prosperity and not redistribution for the U.S. to easily recapture its role of global economic leader.
Tomorrow's children may come to question why their parents sold their birthright for a mess of "fairness" -- whatever that will signify when jobs are scarce and American opportunity is no longer the envy of the world.

Community Reinvestment Act: The Risk of Unintended Consequences

2008-10-20T16:49:00.002-04:00

Great reading from the Heartland Institute on the unitended consequences of government programs, as evidenced by the Community Reinvestment Act and the resulting financial crisis.

As policymakers consider ways to address the current mortgage crisis, it is important to evaluate new proposals with an eye toward their future effects on the economy. The unintended consequences of government programs can have far-reaching economic and social effects. It’s important to keep in mind that government intervention played a central role in creating and elevating the
current crisis: Interest rate manipulation, tax code loopholes, and “smart growth” land-use policies all contributed to artificially inflating home prices and shifting nvestment counter to real demand.

A prime example of a public program gone awry—and one of the key causes of the current credit crisis—is the Community Reinvestment Act (CRA). CRA was designed to ensure that all homeowners were treated “equally” by avoiding “redlining,” the deliberate shifting of financing away from low-income or
high-risk areas. While CRA was designed to serve a positive goal, the economic implications of the new regulation were far more complicated. CRA required mortgage lenders to provide loans to riskier clients, often in stark contrast to what market forces may have dictated. This was done by incentivizing mortgage lenders to make loans for homes in certain zip codes and also by penalizing perceived failures to do enough.

These new loans spawned the subprime mortgage market, a financial sector that is now embroiled in controversy, whose collapse triggered the current downward economic trend. CRA is in many ways socialized financing, forcing banks to lend counter to market trends, thus increasing the risk of failure. We are now caught in a financial downturn that has emerged as a direct result of these risky loans. Any expansion of CRA that limits market flexibility and unnecessarily increases risk is not good policy: A financial collapse benefits no one.

Budget cutting

2008-10-10T09:25:00.001-04:00

Once again, Jim Bacon has an insightful post up on Bacon's Rebellion - this time on the Governor's proposed budget cuts.

What really concerns us though, is the continuing "culture of government" problem that failed to enact meaningful long-term reforms the last time this happened. Rather than using the past budget shortfalls as an opportunity to truly re-think the way government operates and put into place substantive reforms to the overall operations of government, it was easier to settle for quick-and temporary-fixes that didn't get to the real root of the problems.

Bacon's bottom line: Emergency measures are fine for emergencies, which the current budget crisis clearly is. But the culture of state government is such that the costs inevitably creep back ito the system. The Warner administration cut hundreds of jobs, but a few years later, state employment levels hit new highs. In other words, there were few long-term gains in productivity that allowed the state to do the same work with fewer employees. Imposing temporary austerity measures is no way to run an organization for long-term efficiency.

Transportation trust fund fixes

2008-10-07T10:49:00.000-04:00

Don't forget Delegate Saxman's "Question of the Day" from yesterday- what should be done to fix VITA?

And in other news, this interesting read over at the Reason Foundation from former Virginia Secretary of Transportation, Shirley Ybarra.

Temporary Fix for Transportation Trust Fund
States should look to private sector for help building, maintaining infrastructure
By Shirley Ybarra

States that take advantage of private sector resources will continue to provide improvements for the travelling public, despite budget woes. For example, the $1.4 billion high-occupancy toll (HOT) lanes project on Virginia Beltway was funded and the deal was finalized less than a year ago will continue on schedule. The Chicago Skyway and the Indiana Toll Road long-term lease deals, both public-private partnerships, will continue to accomplish their goals to deliver more service to the roads. The Pocahontas Parkway near Richmond, Virginia, which was completed 18 years ahead of schedule and is about to be extended to the Richmond Airport, needs no further state revenue support. Numerous projects in California, Florida and Texas provide further instances in which the private sector has taken the risk, built the project and will continue construction, operation and maintenance without turning to the states for additional monies.

Today's "Question of the Day"

2008-10-06T11:04:00.000-04:00

The most common complaint I hear from state employees is what a disaster VITA is…. What should we do about it?

New Question of the Day

2008-10-02T16:25:00.000-04:00

Thanks to everyone who responded to my last Question of the Day. I appreciated hearing your thoughts.

Now our new question:

Bailout Bill - Necessary or Not?

Reason's 2008 Innovators in Action

2008-10-02T10:21:00.002-04:00

Reason's 2008 Innovators in Action is now available, and worth a read.

Leonard Gilroy, editor of the report and director of government reform at Reason Foundation comments:
"At every level of government there are officials of all political stripes who are implementing programs that give taxpayers more bang for their buck and improve accountability," Gilroy said. "Now we need these types of innovators to become the norm, rather than the exception."

Cost Cutting Caucus Chairman, Delegate Chris Saxman, was included in Reason's 2007 Innovators in Action, which can be viewed online here.

On VDOT

2008-10-02T10:15:00.000-04:00

Jim Bacon has an interesting post up on Bacon's Rebellion about Virginia Department of Transportation Comissioner David Ekern.

Bacon writes:

In a logical and dispassionate fashion, he makes the case for focusing on the "basics" and the "have-to-haves," such as maintenance of pavement and bridges, over desirables such as mowing and hedge trimming. Ekern also talks about targeting 18,000 to 20,000 miles of roads that bear the most traffic, and
consolidating VDOT's organizational structure.

Did you see this one yet?

2008-10-01T10:25:00.000-04:00

A video you shouldn't miss...

What do they do with all that money??

2008-09-30T08:53:00.000-04:00

In light of the recent headlines and talks of $700 billion bailouts and ever-increasing government spending, we thought we'd highlight some states who are shining a brighter light on their own spending practices to give taxpayers more of an idea of just how their hard-earned money is being spent.

The Sunshine Review Blog, a project of the Sam Adams Alliance, focuses specifically on transparency and accountability in government spending. In the past week, they've recognized a couple states who are already drilling down for more details on state spending.

Rhode Island: "The Rhode Island Statewide Coalition (RISC) has released The Money Trail, a transparency website aimed at giving Rhode Islanders more information on how their government spends taxpayer dollars at multiple levels, as well as providing a platform for educated action."

Maine: " “We want to show Maine taxpayers — down to the agency, person and penny — where their dollars go. How can you get the most bang for the taxpayer’s buck?” Tarren Bragdon of the Maine Heritage Policy Center explained to the Bangor Daily News as the reason for launching a new website, MaineOpenGov.org. "

Breaking News: "Government misuses taxpayer dollars!"

2008-09-24T08:55:00.001-04:00

Last chance to answer the "Question of the Day" below!

In other news, this fun tidbit from Cato's At-Liberty Blog:

Govexec.com reports that one-third of recently surveyed federal managers believe “government misuses taxpayer dollars.” While I applaud this bunch for their honesty, I’m stupefied that any federal manager would say otherwise. One need only peruse the morning news to see that Uncle Sam’s spawn fritter away taxpayer dollars incessantly.

State's Right -To Mess it Up

2008-09-23T09:27:00.002-04:00

First, don't forget to check out Delegate Saxman's "Question of the Day" below and share your thoughts!

In other news, Dr. Art Laffer presents research on "What Makes a State Competitive" for the Texas Public Policy Foundation.

With people, products, and capital free to move from state to state, state governments are ultimately competitors. Pro-growth and anti-growth state economic policies influence decisions on whether, where, and how much to work, save, and invest. These policies influence the ability of a state to retain and attract residents and businesses. The evidence suggests that pro-growth policies result in higher after-tax returns, increased economic activity, and an eventual improvement in overall state fiscal health; anti-growth policies result in the opposite effects.

Virginia earns a ranking of 6th (following Utah, Arizona, South Dakota, Wyoming and Tennessee), which is respectable, and places us ahead of most other states in our region, however it does leave us room for improvement. Though the report is focused on Texas, it is insightful into what factors make one state more economically competitve than another.

Question of the Day

2008-09-22T15:20:00.000-04:00

So it's been awhile since my last post, but with the kids back in school and the start of Fall, I figure it is time to get back to blogging.

I know the focus on everyone's minds is the 2008 presidential election. But since we're not a political blog here, I want to try and steer away from that debate. That doesn't mean we can't talk about policy though, and with that in mind, I'll be starting a new "Question of the Day" here on the blog to get your thoughts on policy agenda items for the next administration.

So let's get started. Today's question:

What is the most useless department in the federal government?

I look forward to hearing your thoughts.

Thoughts from Ted Nugent

2008-09-22T09:19:00.001-04:00

He is a rock legend, but that hasn't stopped Ted Nugent from being vocal advocate for smaller government, as evidenced by this column from Human Events, "Sheep in Sheeps Clothing."

Not one to mince words, Ted writes:

The entrenched liberal paradigm is to grow and sustain Fedzilla, the amorphous blob that is gobbling up more and more of our tax dollars and in the process, becoming more and more unresponsive and unaccountable to its employers—you and me, the American taxpayer.

No one who’s smarter than a two-week old puppy seriously believes Fedzilla is a paragon of efficiency or respects the best interest of the American people.

He certainly doesn't sugar-coat the truth!

But Ted doesn't just complain about the size and growth of government, he puts forward some ideas for what we must do to change the system. They aren't realy new ideas, but Ted presents them in a very blunt and direct manner. Maybe that's what it'll take to get someone to listen!

Conservatives should commission a panel of private industry representatives to do a top to bottom review of Fedzilla for the purpose of identifying cost savings by transferring Fedzilla agencies and departments to the private sector, whose goal is to be efficient so that profits are maximized.

Regardless what the Fedzilla supporters write and pass, conservatives should put forth a separate balanced budget each year.

Conservatives must work hard to destroy the current burdensome, complicated tax system and replace it with a simpler, fairer system.

Conservatives should put forth a plan to reduce the overall size of the federal government by 6 ½% each year for next four years so that within four years the size of the federal government is reduced by 25% percent. Tax cuts without reducing spending are meaningless. The savings will be used to pay off our ten trillion dollar debt.

Reducing spending. Something politicians on all levels of government could do more of to benefit their constituents- the American taxpayers.

So he may not be the most politically-correct or subtle guy, but Ted Nugent is willing to call it like he sees it, and his challenge is one worth paying attention to.

Patriotic? Here's an idea for you...

2008-09-19T09:58:00.002-04:00

So by now we've all heard Joe Biden's comments from ABC's "Good Morning America" where he tells folks that paying higher taxes (and redistribution of wealth) are patriotic.

Really, Joe? Things must be different up there in Delaware (or maybe in Washington, DC).

Last I checked though, turning over more money to the government for them to waste on bridges to nowhere and monuments to sitting Congressmen (thanks, Charlie Rangel!).

But the good folks over at the Heritage Foundation have a better idea. They write that "Real Patriots Cut Taxes," which sounds like a much better plan to help build our economy.

Over the last decade almost every member of the European Union has cut its corporate tax rate. Germany cut its rate from almost 40% to nearly 30%. The United Kingdom reduced its rate to 28% from 30%. Even the famous Scandinavian welfare states have gotten in on the corporate tax cutting game. Sweden and Norway both dropped their corporate tax rate to 28%, down from 60% and 50%, respectively. Meanwhile, the U.S. corporate tax rate, after averaging in state corporate tax rates, is stuck at 39%. This is higher than all 27 members of the EU.

High corporate tax rates are undermining U.S. international competitiveness. In today’s global economy, high rates deter companies from taking advantage of new market opportunities in countries they otherwise would be eager to compete in. According to the 2008 Index of Economic Freedom, the U.S. has the fifth-freest economy in the world (behind Hong Kong, Singapore, Ireland and Australia). Of the top 10 freest economies in the world, the U.S. has the highest corporate tax
rate. Even seventh-ranked Canada has joined the tax cutting crowd. Canadians recently cut their corporate tax rate to 19.5% and they have already scheduled another cut in their corporate tax rate to 15% by 2012.

On the fast track to disaster

2008-09-18T08:55:00.000-04:00

While we are very supportive of alternative solutions to our transportation needs in the Commonwealth, as we noted in yesterday's post, some solutions are certainly better than others.

Solutions that can't deliver and end up costing taxpayers far more than they should are never good ideas, as evidenced by the Reason Foundation's latest study of California's venture into high-speed rail.

From the press release: California's High-Speed Rail System Will Cost Tens of Billions More Than Estimated, Adding to State Deficit, Reason notes:

The high-speed rail system will cost tens of billions more than advertised and ridership numbers will be much lower than predicted, according to a due diligence report on the California High-Speed Rail Authority's plans.

Yikes! Tens of billions more?? That's no small change, even for California!

"The current high-speed rail plan is a fairy tale," said Adrian Moore, Ph.D., vice president of research at Reason Foundation and the study's project director. "The proposal suggests these high-speed trains will be the fastest ever; the most-ridden ever; the cheapest ever; and will convince millions of Californians they no longer need to drive or fly. Offering up a best-case scenario is one thing, but actually depending on all of these miracles to happen simultaneously is irresponsible public policy."

Fairy tales might make good bedtime stories, but they rarely make good public policy.

Click here to read the full report.

View the brief on just how big a financial boondoggle this may be here.

HOT HOT HOT

2008-09-17T10:19:00.000-04:00

For some time, we here at the VACostCutting Blog have talked about alternative ideas to address Virginia's transportation needs. We've discussed various ideas about privatization, fixing a seriously flawed federal funding system, public-private partnerships for maintenance, as well as HOT lanes.

And now, HOT lanes are becoming a reality in Virginia.

The process of adding High Occupancy Toll lanes to the Capital Beltway in Virginia is under way, forcing motorists to be aware of new traffic patterns. The $1.9 billion project will introduce express toll lanes to the Beltway, allowing commuters to pay to use the lanes and speed past traffic delays in the normal travel lanes.

This is a good thing for Virginia commuters, and we look forward to seeing more innovative solutions to our transportation needs in the Commonwealth.

Economic Freedom on the Decline?

2008-09-17T08:58:00.000-04:00

At least here in the United States according to the latest annual report on "Economic Freedom of the World," from the Cato Institute and the Fraser Institute of Canada.

The foundations of economic freedom are personal choice, voluntary exchange, and open markets. As Adam Smith, Milton Friedman, and Friedrich Hayek have stressed, freedom of exchange and market coordination provide the fuel for economic progress. Without exchange and entrepreneurial activity coordinated through markets, modern living standards would be impossible.

Potentially advantageous exchanges do not always occur. Their realization is dependent on the presence of sound money, rule of law, and security of property rights, among other factors. Economic Freedom of the World seeks to measure the consistency of the institutions and policies of various countries with voluntary exchange and the other dimensions of economic freedom. The report is copublished by the Cato Institute, the Fraser Institute in Canada and more than 70 think tanks around the world.

Breaking down education spending

2008-09-16T16:44:00.000-04:00

We like videos!

This quick video from the Heritage Foundation gives a quick look at education spending in the United States and provides some basic, but important, facts to remember when looking at the issue of education reform.

Paying for all the government

2008-09-16T11:39:00.000-04:00

The folks over at Bearing Drift as the question, which would you prefer: "Oil Revenues or Tax Hikes?"

State Senator Frank Wagner says Virginia could net $200 million a year in new revenues from safe, environmentally sensitive offshore drilling. Imagine what that could do to alleviate our transportation infrastructure challenges - without raising taxes.

What, you mean there are solutions that don't involve higher taxes?!

Competition Inspires

2008-09-16T10:30:00.000-04:00

John Stossel, Walter Williams and Thomas Sowell discuss school choice and how free market principles should be applied to improve education in America in this great video.

School choice saves $$$

2008-09-12T09:25:00.000-04:00

Visit School Choice Virginia to learn more.

Drew Carey takes on traffic

2008-09-11T09:27:00.000-04:00

Drew Carey takes a look at ideas to address traffic congestion- without using taxpayer dollars- in this episode of the Drew Carey Project at Reason.tv.

A sad day in Virginia

2008-09-09T10:11:00.000-04:00

It is with great sadness that we read the latest edition of Bacon's Rebellion only to learn that the publisher, Jim Bacon, has announced that this will be his final edition of the e-zine.

For anyone not familiar with Bacon's Rebellion (and we're sure most of the readers of this blog are quite familiar as we have referenced their articles on countless occassions), you have been missing out on the best publication in Virginia dedicated to government and reform. Over the years, Jim has solicited articles from some of the best minds in policy and politics, and they have shared many insightful looks into what Virginia does well, and what we can do better.

As Jim explains:

Our writers explored how Virginians should respond to the challenges of globalization, the Knowledge Economy and the depletion of our natural capital. We railed against complacency and challenged the status quo. We advocated the wholesale transformation of outmoded institutions that no longer work well -- from education to economic development, from transportation to land use, from energy to the environment.

And they have done it so well for so long. They have stimulated debate, and hopefully changed the way that at least some in government look at the way we do business.

The good news is that Jim assures us this will not be the end of Bacon's Rebellion as a publication, but his presence will certainly be missed. We hope that Jim will not completely leave the discussion he has started with Bacon's Rebellion. As we all know, it is an on-going discussion on how we can make our great Commonwealth an even greater place to live, work, run a business and raise a family, and we know that Jim still has plenty left to say on how we can all work to accomplish these goals.

Where does all that money go?

2008-09-08T09:31:00.000-04:00

Not to the transportation projects that need it, reports Dr. Ronald Utt at the Heritage Foundation.

Seems like it isn't just Virginia that has the problem using transportation dollars in a way that will actually benefit motorists and ease traffic congestion. Dr. Utt reports that the federal Highway Trust Fund is being looted by Congress for a number of projects that are doing nothing to actually address pressing transportation needs.

In "Congress Undermines America's Infrastructure by Looting the Highway Trust Fund," Dr. Utt writes:

Among the many reasons these congressional tax-and-spend schemes will fail to relieve worsening traffic congestion and road deterioration is that less than two-thirds of current federal surface transportation spending is devoted to the general purpose roads that the typical motorist or truck driver (who finances the fund) use in the ordinary course of travel. The other third goes to a growing collection of costly diversions that have little to do with the mobility needs of the average motorist or to the economically essential movement of freight.

Spicing Up Budgeting!

2008-09-05T09:29:00.000-04:00

Ah, budgets.... not exactly the most exciting topic of conversation, but the folks in Nevada are adding a little spice to things... some SAGE to be precise.

Okay, well maybe that's going a bit far, but when faced with a billion dollar budget shortfall (where have we heard that before??), the Governor implemented a Spending and Government Efficiency (SAGE) Commission.

From the order establishing the Commission:

WHEREAS, Nevada continues to be one of the fastest growing states in the nation, resulting in dramatic increases in government expenditures over the past thirty years. Specifically, the total state budget has increased by 35.3% (per capita, adjusted for inflation) since 1979; and

WHEREAS, it is incumbent on any responsible government to ensure that its expenditures are reasonable, responsible, and prudent, particularly when a state continues to experience rapid population growth with a corresponding increase in government expenditures; and

WHEREAS, the wise and responsible use of taxpayer dollars is a goal that all public officials should support and strive for; and

WHEREAS, it is imperative that state government maintain a low tax burden on its citizens while still providing essential state services; and

WHEREAS, a careful examination of state expenditures by an objective, neutral and bi-partisan body will help provide increased government efficiency and accountability and ensure that state government operates within its means and in a responsible manner; and

Wow- isn't it nice to have a Governor support keeping the tax budget low and opt for examining government efficiency and accountability rather than going right for a tax hike?

The folks over at Reason's "Out of Control" blog take a closer look as the SAGE Commission prepares its first set of recommendations.

We look forward to seeing the work of Nevada's SAGE Commission, and we wish them the best in implementing those recommendations, for as we know, that is often the hardest part...

No wonder they don't like transparency!

2008-09-04T11:10:00.001-04:00

The folks over at the National Taxpayers Union (NTU) took a closer look at Missouri's use of taxpayer funds, and the findings were shocking.

NTU reports: "Missouri Tax Dollars Spent at Beauty Salons, Bra Shops, and Donut Bakeries, Review Finds."

Bra shops? Seriously? What's worse- apparently this was an on-going expenditure, totalling more than $15,000 over 8 years! I'd honestly like to see someone try and explain that one. I realize it is a relatively small amount out of an overall state budget, but that is no excuse.

A review by the 362,000-member National Taxpayers Union (NTU) of an online database listing Missouri's public expenditures found more than $2.4 million of taxpayer money spent for questionable purposes over the past eight years, including purchases made at bakeries, beauty salons, bra stores, coffee shops, and picture-framing galleries, among others.

Kudos to NTU for their efforts to expose this type of wasteful spending. Now if we could only get a clear picture of where all of Virginia's tax dollars were being spent...

Haven't we said this before?

2008-09-03T09:54:00.000-04:00

School choice saves money!

So many times it seems like the only solution politicians have for "fixing" education is to pour more money into a broken system. But time and time again we have seen that more money doesn't seem to be making things any better.

And as we have discussed before here at the VA Cost Cutting Blog, school choice can save money and improve education at the same time.

Our friends over at School Choice Virginia have a new post on their blog today looking at the issue of school funding and the tired argument that choice would "take money away from public schools."

They reference a new article from the Heartland Institute that looks into the actual numbers, and shows that:

The data prove the superiority of school choice. With vouchers, the government can completely fund poor students in failing districts to attend successful public or private alternatives, and could save on average up to 30 percent of their currently reported education costs, and probably a lot more since those costs are undoubtedly being routinely underestimated, as Coulson notes.

These millions of saved dollars could be used to increase the overall per-pupil funding in the remaining public schools -- which is exactly what the anti-voucher advocates are calling for.

Save money? Improve education? Sounds like a win-win situation for everyone- especially for our students.

Survey says...

2008-09-02T12:47:00.001-04:00

Citizens don't think they're getting their money's worth from local government!

The Richmond Times Dispatch is reporting that Richmond's auditor's office has released a survey of 800 city residents, and the majority are reporting they don't think they city government is doing a good job spending their tax dollars.

Of note:

The number of cases cleared per officer in Richmond is two-thirds the rate of Newport News and three-quarters the rate of Virginia Beach, even though Richmond's per capita spending is 2.1 times Newport News' total and 2.4 times Virginia Beach's.
Richmond's effectiveness in fighting fires, measured by the percentage of fires contained to a single room, lagged behind Newport News' even though per capita spending was nearly 50 percent higher in Richmond.
About 43 percent of Richmonders surveyed thought city schools do a poor or fair job.
70 percent of Richmonders think water and wastewater fees are too high.

Resisting sunshine

2008-09-02T10:00:00.000-04:00

We've talked a lot about transparency here at the Cost Cutting Caucus blog lately, and we're all too familiar with the reluctance by many in government to follow through when it comes to shining more light on government spending habits.

Jim Waters over at the Bluegrass Beacon, a publication of the Bluegrass Institute, takes a look at the situation in Kentucky as government officials like to talk-the-talk but not always walk-the-walk on transparency.

Sound familiar?

Now that's cutting some costs...

2008-09-02T09:32:00.000-04:00

The Reason Foundation's "Out of Control" Blog takes a look at some privatization moves and cost cutting action from Alaska...

Privatization Paying Off in Indiana

2008-08-28T13:57:00.000-04:00

From Reason's "Out of Control" Blog, we get this post on privatization efforts in Indiana, including the Indiana Toll Road lease and the positive impact those are having for the state.

Referencing Leonard Gilroy's article on the subject:

Without the toll road lease, these projects would likely have never materialized, or they would have necessitated tax increases to move forward. And Indiana has also earned over $360 million in interest on the upfront payment in just two years (over $185,000 per day, at current rates), which will be used to fund additional state and local transportation projects for decades.

More Illinois Budget Trouble

2008-08-28T10:26:00.000-04:00

We posted the September issue of the Heartland Institute's "Budget & Tax News" earlier this week. If you didn't have a chance to read it, you may enjoy this article on the latest drama from Illinois...

Illinois Is Playing a Dangerous Game with its Broken Annual Budget Process
By: Sheila Weinberg

For the second year in a row the Illinois state government started its fiscal year, which began July 1, without an approved budget. Legislators passed a 2009 budget by the May 31, 2008 deadline, but the governor refused to sign it.

Lawmakers acknowledged the budget was about $2 billion out of whack, and on July 9 Gov. Rod Blagojevich (D) vetoed $1.4 billion in spending.

About one week later the governor called lawmakers back to boost taxes or fees to stave off the cuts, but House members instead restored $480 million of cuts. Senators took no action, so the cuts remain. So does the budget imbalance.

Unfortunately, the budget game the state's politicians are playing is far from harmless.

Ted Hampton, a Moody's bond rating agency assistant vice president, recently issued a press statement saying a state that repeatedly starts its fiscal year without a budget is viewed as having "political polarization." That could adversely affect bond ratings, cost taxpayers higher interest payments, and make it more difficult to place state bonds, he added.

"Getting Government Out of the Way"

2008-08-28T10:17:00.000-04:00

In case you missed it, a great read by Dr. Ed Feulner over at the Heritage Foundation on the issue of minimum wage and unemployment rates.

Free enterprise has built America into the most prosperous nation the world has ever known. We have always embraced new ideas. We have always relied on the ingenuity of individuals and free markets to solve problems.

Shine a light on education spending

2008-08-27T10:46:00.000-04:00

The Grassroot Institute of Hawaii is kicking off a new education transparency intitiative.

In the pre-release: Shining the Light on Education Spending in Hawaii: Where Do Our Public Education Dollars Go?, Laura Brown notes:

Every year these DOE "cry wolf" tactics dupe the public into believing that Hawaii’s public education is under funded, but this time the Governor simultaneously released news that 651 DOE personnel recently attended a
conference at a Disneyland Resort in Orlando, Florida at a cost of at least $1.2
million. In response, a flood of skeptical comments from the public filled the commentary sections of the daily newspapers.

How can the Board of Education (BOE) believe that it must cut programs while the DOE carries over hundreds of millions of dollars? How can the Legislature annually appropriate millions in emergency funds not knowing that the DOE has more than enough money in the bank? A past superintendent testified before a Ways & Means committee that the DOE Budget Office does not communicate with the Accounting Office. In other words, there may be a budget “shortfall” on paper, but expenditures are consistently less than budgeted.

Humm, sounds like a familiar scenario... we look forward to seeing what the Grassroot Institute uncovers...

Less is more...

2008-08-27T10:33:00.000-04:00

Seems like something we've said before here at VACostCutting...

Interesting commentary on the subject of creating a performance-managed government workforce from the Georgia Public Policy Foundation.

Bacon talks budget

2008-08-27T09:14:00.000-04:00

There have been a lot of headlines recently about the state of Virginia's budget (gee, sound familiar?), and already the debate is on as to how we should "fix" things.

Norm Leahy spoke with Jim Bacon to discuss their thoughts on just what needs to be done.

Take a listen over at Bacon's Rebellion.

Mackinac says "Contracting Out is In"

2008-08-26T10:06:00.000-04:00

The Mackinac Center for Public Policy recently released its 6th sixth privatization survey of Michigan public school districts.

Their findings? Well, for the 5th survey in a row, they found that "the percentage of districts contracting for the management or operation of at least one of the "big three" support services - food, janitorial or busing - increased...to 42.2 percent, up from 40.2 percent in 2007. That is a rate increase of almost 5 percent."

Check out the other findings here. The conclusion

Done right, school support service privatization can save money and improve services -even if the privatization option is used solely to persuade public employee bargaining units to sharpen their pencils. This year's survey findings indicate that contracting out not only remains a widely accepted practice, but one that will likely grow in the future.

"Budget & Tax News" - September Issue

2008-08-26T09:02:00.000-04:00

The September issue of The Heartland Institute's "Budget & Tax News" is now available. If you haven't checked it out before, it is a great national publication devoted to lower taxes and smaller government (two things we are all for here at VACostCutting!).

Of note, check out:

Expert Sees Problems with Drink, Rental Car Taxes, by Steve Stanek

"Any time you raise the price of something, you decrease its consumption." ... The taxes will take more money out of the local economy at an especially bad time, Gamrat said. "You're talking about delicate economic times at best right now," Gamrat noted. "The county executive [who led the fight for the new taxes] is encouraging those who live on the county fringes to buy elsewhere, and other people to spend less."

Budget Transparency Problems Are Identified in 50-State Survey, by Sheila Weinberg

Transparency is critical in each state's budget process, because that process is the principal vehicle through which state legislators and governors allocate resources collected from businesses and individuals.

Optimal, 'Right' Size of Government Provides New Political Paradigm, by Lewis K. Uhler and Richard Vedder

A growing body of research shows there is an "optimal" size beyond which government becomes a drain on a nation's economy. And government in the United States--local, state, and federal combined--has already grown far beyond that optimal size.

Enjoy!

And the winner for transparency is...

2008-08-25T16:11:00.001-04:00

Texas!

So says the Sunshine Review Blog. For all of Virginia's recognition as "Best Managed State," apparently when it comes to transparency, we still have some work to do

Of note, Texas has accomplished:

posting state budget information online in a user-friendly format
streaming video of live House and Senate proceedings
passage of multiple bills related to transparency and accountability
Gov. Rick Perry signed an Executive Order in 2005 requiring school districts to post their check registers online if they failed to meet certain spending criteria
Texas legislators, working in tandem with the governor’s office, enacted the “Truth-in-Taxation” bill in 2005
Texas Comptroller Susan Combs has converted the state’s massive budget into a user-friendly package with the introduction of “Where the Money Goes,” which saved more than $2.3 million in her agency alone
The Texas Public Policy Foundation recently launched a new Web site, TexasBudgetSource.com, which supplements “Where the Money Goes” with detailed budget analysis of state expenditures over the past 20 years, links to the online check registers of more
than 150 Texas school districts, and lists of counties and cities that have posted their budget information online and more

Looks like we have plenty to keep us busy!

Educational cost savings

2008-08-25T12:47:00.000-04:00

Here at the Cost Cutting Caucus, we've talked about the cost savings from school choice- specifically the cost savings generated when students do not attend public schools.

In Virginia- and across the country- state and local governments are increasing education budgets at tremendous rates- far outpacing actual increases in enrollment. What's worse, in many places, the increased spending does not appear to be producing measurable results in achievement.

Now, some taxpayers are finally saying enough is enough.

As the folks over at School Choice Virginia note, the Wall Street Journal is reporting that citizens in Connecticut are pushing for changes in what seems to be un-checked budget growth for education.

Over the past two and a half decades, the student population in Connecticut has increased only 10%. Yet the cost of schooling more than doubled — to $8.8 billion in 2006, up from $3.4 billion in 1981.

Cost savings ideas that have been proposed already include reducing usage of school vehicles, paying students not to attend the public schools (by attending private schools, vocational schools or home schooling), providing scholarships for students who graduate high school early, tax credits and implementing zero-based budgeting.

Commonwealth Competition?

2008-08-25T10:16:00.000-04:00

The latest edition of Bacon's Rebellion is up, and this edition contains an insightful article by Leonard Gilroy on "Closing the Budget Shortfall."

Looking at the Commonwealth Competition Council, Mr. Gilroy finds that though the Council has done good work, its status as an advisory body rather than one with a mandate to ensure the implementation of recommendations leaves it relatively weak. He urges the Commonwealth to "develop more effective tools to systematically evaluate competition and efficiency opportunities across state government."

Luckily, some in the General Assembly understand the need to modernize the state’s efficiency tools. Earlier this year, Del. Chris Saxman, R-Staunton, introduced House Bill 1238, which would replace the current CCC with a new Commonwealth Realignment Commission with more teeth to review the operations of state agencies and state-funded programs and promote privatization through competitive contracting.

The bill didn’t advance, but policymakers should revisit it in the next session. Whether or not that particular approach would offer the state a more powerful tool certainly merits a substantive policy discussion. Regardless, Saxman’s bill is exactly the kind of thinking Commonwealth taxpayers deserve to see more of moving forward.

“Everybody Healthy Nobody’s Fat Act of 2008"

2008-08-25T10:01:00.000-04:00

Mike Maurer over at the Buckeye Institute just might be on to something with this idea over at the Buckeye Blog...

Reason Foundation: 2008 Annual Privatization Report

2008-08-25T09:19:00.000-04:00

In case you missed it, earlier this month, the Reason Foundation released it's annual Privatization Report.

Of note, they found that taxpayers were saved $7.2 billion over the past five years through federal competitive sourcing. From the press release:

Competitive sourcing allows the private sector to compete for jobs and contracts that are currently performed by the government. Federal employees actually won 83 percent of the job competitions from fiscal 2003 through fiscal 2007. But taxpayers are the real winners: the Annual Privatization Report shows taxpayers save $25,000 for every job that is put up for competition because even when the government keeps the job it significantly improves efficiency and reduces costs.

You can view the whole report online here.

Transparency in education, too!

2008-08-22T15:15:00.002-04:00

Looks like our friends blogging over at School Choice Virginia are on the same page when it comes to transparency.

Here they look at transparency in education as a plus for parents.

Great quote from Australia's Education Minister:

“I do think transparency of information in and of itself will spur people to do better and they will all want to be seen to be doing better.”

Yes, we think so too.

Transparent budgets?

2008-08-22T11:00:00.000-04:00

Barton Hinkle over at the Richmond Times Dispatch looks at the latest budget crisis in "State Leaders Will Have to Cut Somewhere -- But Where?"

Last week this newspaper suggested, in the editorial, "Hard Times," ways the commonwealth might close its fiscal gap -- from dipping into the rainy-day fund to layoffs to spending cuts. The paper voiced agreement with Gov. Tim Kaine that it is wiser to make selective cuts than to slash both essential and non-essential spending equally. The editorial singled out several agencies "whose functions are not crucial" to the state -- from the Virginia Tourism Authority and the Virginia Economic Development Partnership to the Virginia Commission for the Arts.

On the one hand, everyone seems pretty much in agreement this go round that we need to look at cutting spending- rather than once again raising taxes. On the other, the question looms of can we agree on where those cuts should be made?

Hinkle writes:

"Don't tax you, don't tax me -- tax that fellow behind the tree," the late Sen. Russell Long famously said. Virginia, facing a budget shortfall on the order of $1 billion, is hearing a variation on the theme: "Don't cut you, don't cut me . . . ."

If only we could actually get a clear view of where and how all that money was actually being spent rather than this mess....

Today's theme: accountability

2008-08-22T10:12:00.001-04:00

Continuing on our theme of accountability, we find this great video from Empower Texans. It's a little long (about 8 minutes) but well worth the watch as they breakdown the "investment" Texas has made into public education and examine the results.

It makes you wonder, if that is the kind of results we're getting for our "investment" in the current educational system, maybe it is time to start looking for other options....

h/t Sunshine Review Blog for sharing this story!

Transparency and Accountability

2008-08-22T09:49:00.000-04:00

Transparency and accountability in government- two of our key goals here at the Cost Cutting Caucus. And it seems to be a trend that is catching on.

Earlier this month, the Buckeye Institute in Ohio, announced the formation of a new Center for Transparent and Accountable Government. They will focus on collecting and making available to the public "state and local government budgets, employee contracts, public records policies and other information."

We think it sounds like a great idea, and we wish them much success!

For more, Jayme Siemer from the Sam Adams Alliance interviewed the new director of the the Center, Mike Maurer. They've posted the interview on the new website we told you about yesterday: No Taxation without Information.

Click here for the Interview

"No Taxation without Information"

2008-08-21T12:33:00.001-04:00

Check out this new site, a project of the Sam Adams Alliance.

From the site:
"No Taxation Without Information" is part of the Sam Adam Alliance’s transparency website Sunshine Review.org, a Wikipedia-like website. It enables people to find and share with each other information about whether state and local governments are effective, easy to reach, open, honest and responsible with taxpayer money.

We like the sound of that!

Four day school weeks?

2008-08-21T10:02:00.000-04:00

It's making headlines across the country as school boards and governments weigh the option to help cut costs. In Nevada, Ohio, Louisiana, Pennsylvania, Montana, Utah, and other states around the country the debate is taking place, and in some places the decision has already been made to move to a four-day school week. (Some reports have as many as 100 schools in 16 states already making the shift.)

Now Virginia schools are beginning to consider this as a cost-savings option.

Lights out. Computers off. Fewer county employees take government cars home. And maybe four school days instead of five.

A joint committee of supervisors and School Board members discussed austerity measures during their second monthly meeting yesterday morning.

A four-day school week would come with complications, such as requiring many parents to find day care for one weekday. However, School Board Chairman Hal Schaffer wants to study the issue further, with the possibility of extending instruction by 80 minutes per day. Closing schools one day a week would save the county on heating, cooling and transportation costs.

"When All Else Fails, Try the Head Smackingly Obvious"

2008-08-21T09:26:00.000-04:00

In case you missed Bacon's Rebellion's August 4th edition, this article by Ronald Utt is definitely worth a read.

Want to relieve traffic congestion? Stop funding pork barrel and prioritize transportation projects that... (drum roll)... relieve traffic congestion.

Mr. Utt explains that voters just don't have confidence in their government to spend tax dollars wisely or effectively to create better transportation systems.

With the economy deteriorating and voters pressed by worsening employment prospects and escalating gas prices, opposition to pointless tax increases will stiffen. Perhaps elected officials may finally realize that the opposition to higher taxes stems more from a reluctance to pay Neiman Marcus prices for Dollar Store products than from any particular ideological objection to paying for transportation services.

Unless federal, state, and local officials take steps to improve management of transportation operations and restore voter confidence, voter skepticism will persist as congestion and safety standards worsen.

His suggestions, including conducting an independent audit, performing an independent performance assessment and actually implementing recommendations, are critical to truly fixing our transportation systems. Definitely worth a read.

New Blog: School Choice Virginia

2008-08-20T10:45:00.001-04:00

As readers of the VACostCutting Blog know, educational choice is an important issue for us. (See here, here, here, here, here and here, just to name a few.)

And now, joining in the efforts to promote educational opportunities, we'd like to welcome School Choice Virginia to the blogosphere.

School Choice Virginia is a "501(c)4 organization working to expand educational choices for Virginia families to ensure every child has the opportunity to receive the education that best meets their unique and individual needs," and they are blogging about educational reforms here in Virginia and news from around the country.

We look forward to following their efforts.

"Diversity Lags In Va. Program To Help Firms", but at what cost to taxpayers?

2008-08-20T09:20:00.000-04:00

The Washington Post notes that the Kaine "administration has achieved one of its top goals -- buying 40 percent of all state products and services from small, women- and minority-owned businesses."

And while it is encouraging to see the state reaching out to small, women- and minority-owned, businesses, this may be coming at a cost to taxpayers who may be footing a higher bill for goods and services.

Some companies in Virginia, including some with long records of working for the state, have lost contracts recently in the state's eagerness to hire small, women- and minority-owned businesses.

At least two companies are formally protesting losing bids to SWaM companies, which they claim come at taxpayer expense. In both cases, the losing bids were lower in cost than the SWaM bids.

Especially in light of the recent talk of yet another budget shortfall, shouldn't our first priority for state agencies be to find the best possible services or goods at the lowest possible cost?

"A lot of people are concerned about the cost factor," said Del. Christopher B. Saxman (R-Stanton), who heads the General Assembly's Cost-Cutting Caucus and has heard similar complaints about lower bids being rejected. "If it's costing the state money, then it's probably worth refining."

Should limited tax dollars be funding an agenda or be used to fund necessarily core services of government?

Check it out: Education Equality Project

2008-08-01T16:10:00.000-04:00

The Education Equality Project gained support from Senator John McCain today.

Already supported by notable advocates for education reform, including former Florida Governor Jeb Bush, former DC Councilman and founder of Democrats for Education Reform- Kevin Chavous, former Milwaukee Public Schools Superintendent Howard Fuller, former congressman J.C. Watts, and many others, the Education Equality Project released the following statement regarding Senator McCain's remarks at the National Urban League's convention earlier this morning:

"We are gratified that Senator McCain has endorsed the principles of the Education Equality Project, joining education, civil rights, and elected officials across America who are working together to bring meaning ful reform to our nation's public schools. The members of the Education Equality Project believe that education reform is the civil rights issue of our time. Fixing our schools won't be easy and it will require strong national leadership--but nothing short of that will enable us to live up to our basic commitment to our children: to help them learn so they have a real shot at achieving the American dream. Education reform, like civil rights, is above partisan politics and must be embraced by all."

Read The Statement

School Choice: It's Time

2008-08-01T11:08:00.000-04:00

From today's Daily News Record in Harrisonburg...

The Time For School Choice Has Come

By Katreena Crookshanks

Del. Chris Saxman’s announcement that a coalition of concerned citizens is forming School Choice Virginia provides the chance to examine why school choice is an option Virginians ought to have.

There are two principal reasons: one is money, the other the right of parents to educate children as they see fit.

According to the Virginia Department of Education’s report: Keister, Spotswood, Stone Spring and Waterman elementary schools did not make the Adequate Yearly Progress required under No Child Left Behind. Thomas Harrison failed to make the AYP for the third year in a row.
Consequently, the Harrisonburg City School District did not meet the AYP goals. The Harrisonburg City School District had six schools, with 4,528 students for the 2007-2008 school year.

According to the same Virginia Department of Education report, Rockingham County School District (with 20 schools and 11,850 students) met their AYP goals for 2007-2008. Harrisonburg City Schools’ approved budget for 2008-2009 is $60.3 million, about $10 million per school. The Rockingham County Schools budget for 2008-2009 is $164 million, about $8.2 million per school. Harrisonburg plans to spend nearly $2 million more per school.

If additional funding equates to increased performance, as some logic dictates, Harrisonburg City Schools should outperform Rockingham County Schools. And wasn’t passage of the lottery bill years ago supposed to ease school budget funding? Obviously more money, the mantra from the National Education Association and state and local school boards, is not working. When will “more money” be enough?

For the rest of the op/ed, click here.

FLASHBACK: Accounts Receivable Operational Review Report

2008-07-21T06:59:00.000-04:00

Today, one of our favorite topics here at VACostCutting, Accounts Receivable. Again, we look back and share with you again the report presented by the Accounts Receivable Operational Review Team.

Accounts Receivable Operational Review

The final Operational Review Team report on Accounts Receivable has been completed. The Operational Review Oversight Committee has yet to accept the report or make revisions, but the preliminary goals and recommendations are summarized below.

Accounts receivables are taxes due to the Commonwealth that have not yet been collected. Collecting these taxes can result in mllions on dollars in additional revenue. In 2003, 98.3 million was collected as a result of renewed efforts by the Department of Taxation.This report is an update to the Governor’s Commission on Efficiency and Effectiveness Final Report published in late 2002.

That report made the following recommendations:

Standardize collections management across all Commonwealth agencies;
Shorten the time period for declaring accounts delinquent;
Use multiple collection agencies to foster competition; and
Consider legislation enabling the use of “debt sales” to provide cash.

The first three recommendations have already been implemented and are resulting in improved state revenue flow. Accounting policies and procedures were revised, and the deliquency designation was shortened from 90 to 60 days. Private collection agencies were also contracted to strengthen collection efforts. The fourth recommendation of the Governor's 2002 report will be harder to implement. There are significant constitutional and legislative barriers to debt sales. Before this can be accomplished, the General Assembly and Office of the Attorney General must address the legal issues.

There is still work to be done as Virginia adapts to new technologies and economic uncertainty. The report notes that Virginia needs to maximize collections from accounts receivable in order to offset declining cash flows from several revenue streams that are showing the effects of falling markets. The most effective way to do this is to use the new technologies to speed up collections and simultaneously reduce collection costs.

The Operational Review team has identified six areas where small investments could yield large returns in maximizing collections:

Enhance agencies’ abilities to skip trace. Several agencies, notably the Department of Social Services, now access current address and other contact information from new data sources including cell phone records, cable user records and insurance company records. These new information sources should be identified and made available to all agencies and institutions, including local governments.
Revise setoff procedures to stop uncompleted matches. Currently, debtors are informed of their rights of due process at the time a payment or refund is intercepted. This after-the-fact approach has cost approximately a million dollars a year in lost setoff payments. The current methodology should be changed. Debtors should be notified what the debt is and what their rights are as soon as claims are submitted to the setoff programs. The responsibility for exercising the identified rights should be placed on the debtor, not the State agencies. This way, successful matches will be final and available for timely deposit.
Establish one master database of debtors’ contact information. Information from TAX, Virginia Employment Commission, State Corporation Commission, Motor Vehicles and several other license-granting agencies should be selectively combined in one secure database that other agencies and institutions would have read-only access to. Combine repositories into one new “debtors’ database.
Do not issue business or personal licenses to delinquent debtors. Match state and local government permits, licenses (both business and personal), and registrations against setoff records. This would be facilitated by using a central database. Debtors would be encouraged to pay the entire amount or follow signed payment plans in order to retain current permits and licenses or apply for new ones.
Leverage the economies of scale and specialization for smaller agencies. Small and medium sized state agencies have a disadvantage when it comes to collecting accounts receivable. They lack the capacity to dedicate full time positions to the business of collecting money from slow or non payers. This disadvantage can be overcome by outsourcing delinquent accounts to a vendor that would receive all of the debt files from the agencies, distribute the files to the private collection agencies under State contract, and monitor the ongoing efficiency of those private collection agencies. Good experience has resulted from the operation of a centralized payroll services bureau which has covered the cost of its operation through users’ fees. This model can be used to build a receivables management bureau from resources created through service arrangements made between smaller agencies and larger agencies to provide administrative and business functions.
Measure agencies’ efficiency and effectiveness at collecting receivables. Measure individual state agency performance in collecting the dollars they have billed. The agencies’ performances should be disclosed and reported quarterly. One measure is Collections as a percentage of Billings. This measure shows the effectiveness of agencies in getting paid for providing services when the service is provided. The second measure is the percentage of Delinquent (over 60 days past-due) Receivables compared to Gross Receivables. This measures the efficiency of agencies in following up on unpaid billings and obtaining subsequent payments. These two measures would reflect the agencies’ efficiency and effectiveness at managing their accounts receivable and help ensure the Virginia Debt Collection Act is being followed.

Thanks again to everyone who contributed their time and work to this report. Participants include Robert Meinhard Department of Accounts, Deborah Madison Department of Corrections, Karen Stephenson Department of Medical Assistance Services, Jerry Lewis Department of Social Services, Thodore Darden Department of Social Services, David Jordan Department of Taxation, and Wendell Vest Virginia Polytechnic Institute and State University.

FLASHBACK: Printer, Copier, and Paper Operational Review

2008-07-18T07:07:00.000-04:00

While yesterday we looked at the Commonwealth's Mail programs, today we look back at the findings of the Printer, Copier and Paper Operational Review team.

Printer, Copier, and Paper Operational Review

The final Operational Review Team report on Printer, Copier and Paper has been completed. The Operational Review Oversight Committee has yet to accept the report or make revisions, but the preliminary goals and recommendations are summarized below.

We all recognize that printers, copiers and paper are essential to government operations. At first glance, they might not sound like a major expense, but when you consider the number of printers and copiers purchased and maintained by the state and the amount of paper those devices consume, the cost adds up. Virginia departments and agencies currently have a printer inventory of 34,221 and thousands more copiers. In FY06 the state spent $7,499,837 on paper, stationery and forms (carbon paper, employment application forms, ledger sheets, letter sheets, mailing envelopes, other informational and record forms, other paper, and similar stationery items).

In addition to the printer, copier, and paper expenditures, the state spent $37,702,417 on printing services that include designing, printing, collating, and binding.

The Printer, Copier, and Paper Operational Review Team was formed to accomplish these goals:

Goals

Goal 1: Research and document the current environment as related to statewide printer and copier inventory, regulation, cost, and utilization within the state.
Goal 2: Research and document the current environment as related to paper standards, regulation, and cost within the state.
Goal 3: Research and document the current environment as related to print services and print management (outsourcing printers, copiers, fax machines, paper, and consumables) within the state.
Goal 4: Research and document best practices as related to printer, copier and paper procurement, utilization, and consumption within the state--best practices that can be leveraged across the enterprise to bring about operational efficiencies and effectiveness, bargaining power, and cost savings.
Goal 5: Document findings and make recommendations for achieving operational efficiencies and effectiveness and cost savings as related to printer, copier and paper procurement, utilization, and consumption within the state.

After completing the review, the team offered the following recommendations:

Recommendations

Recommendation 1: Promote a printer, copier, and paper savings awareness campaign—promoting print efficiencies, cost-savings, and best practices.
promote print best practices,
promote paper recycling and paper standards,
educate the agencies and departments about print management,
encourage agencies and departments to document their current print environment and to envision their future print environment,
encourage agencies to develop and implement a plan for realizing their future print environment,
reduce agency and state cost of print and,
place the right printer and copier (or multifunction machine) at the right place, at the right time, and for the right purpose.

Recommendation 2: Implement print management best practices
Replace standalone copiers, faxes, and printers with multifunctional products
Rent copiers, printers, and multifunctional products (instead of purchase)
Centralize the procurement of copiers, faxes, printers, and multifunctional machines
Establish print manager roles (print output czar) in each agency
Develop policy aimed at reducing paper consumption and printer/copier consumables
Implement document management systems (electronic records) for reducing paper consumption and printer/copier consumables
Recommendation 3: Move toward phasing out fax machines. Personal computers and multifunction machines now have the capability to fax documents. Significant cost reduction could be realized by eliminating fax machines and performing these functions on personal computers or multifunction machines.
Recommendation 4: Move toward or transition to the implementation of managed print services--as appropriate for meeting agency and department mission and goals. Managed print services (MPS) are services offered by an external provider to optimize or manage an organization’s document output. A MPS contract can include assessment services, asset management, output management services, and support services. The external service provider either owns or leases the hardware, with the customer paying a monthly or quarterly fee—based on a cost per page or cost per seat. Gartner suggests that candidates for MPS are midsize or large organizations with 100 or more employees. Agencies and departments should document their print needs and determine if the use of managed print services would reduce their print cost.
Recommendation 5: Encourage agencies use of high-volume print shops for large print jobs. Virginia Correctional Enterprises (VCE), a printing service within the state, continues to demonstrate its ability to produce quality and timely print for state agencies and departments—at a cost savings. In addition, state procurement regulation mandates that goods and services produced or manufactured by state correctional facilities be purchased by all departments, institutions, and agencies of the Commonwealth (there are some waivers to this regulation).

Thanks again to everyone who contributed their time and work to this report. Participants included Senator Fred Quayle, Delegate Dave Nutter, Gwen Baily Assistant Clerk of the Senate, Linda Belflower of the Virginia Employment Commission, Paula Dehetre of the Office of Workforce Development, Fred Duball of VITA, David Nims of the Department of General Services, Tiffany Moklebust of Gartner Group, Stephanie Holt of Xerox, and Jim Dougherty and Tony Williams of Virginia Correctional Enterprises.

Efforts like this will ensure Virginia remains the best managed state in the nation.

FLASHBACK: Mail Operational Review Report

2008-07-17T06:30:00.000-04:00

Back to our Operational Review Reports today with the report from the Mail Team.

The Operational Review team examining mail has finished its review. Mail operations certainly drive costs in state government to a tune almost $300 million on mail related services in the last five fiscal years. Inefficient mail operations can result in excess spending on postage and equipment. The Review team examined best practices which could be implemented, consolidation and standardization of mail operations, and mail security.

Operational/Cost Efficiency

Current Situation

State Mail Services (SMS) that has positioned itself to start the consolidation of mail operations. SMS is currently providing metering services for over 25 state agencies’ outgoing mail. Since the hiring of the State Mail Manager in August, 2006, SMS has continued to show progress with this initiative.

Increased Postal Services: SMS has begun providing postal services to all agency customers that may not have been available before the consolidation effort. Some of these services include:

metering of outgoing mail,
pick-up of mail from Post Office Boxes,
reducing the number of USPS permits agencies have to purchase,
electronic USPS special services,
training regarding postal operations,
and consultation with agencies about mail issues including envelope or mail piece design.

Presort: Streamlining mail operations for smaller state agencies will help the Commonwealth take advantage of the various discount programs offered by the USPS to large mail operations. SMS currently works with a vendor to combine mail volumes from smaller state agencies to allow them to receive discounted postage rates for presorting. Agencies are now processing their mail at $0.41 per piece. Under the SMS presort program, presorted mail can be processed by the USPS at $0.36 or less.

Policy and Procedures: Much headway has been made toward standardization of procedures for processing mail at the Seat of Government. The SMS Mail Services Guide outlines uniform methods for preparing mail at all agencies for which SMS services are provided and is a standard for other state agencies

Recommendations

The following recommendations are offered about Operational/Cost Efficiencies:

Develop a mechanism to charge for special services. This would allow for the development of special services and accurate cost sharing for these services. With SMS positioning itself to become a full service mail center, a formula must be in place to recover costs for SMS while at the same time saving agencies that utilize the services money.
Increase presort usage by either obtaining a presort machine and performing this function in-house or by careful oversight of a private vendor.
Consider print-to-post technology.
Conduct a current survey of carrier services used by agencies. This may identify opportunities for consolidating services or offering a statewide contract.
Obtain a better picture of the mail operations of agencies that are not currently utilizing SMS services.
Look into their reasons for not doing so and address these issues.
Consolidate USPS permits across agencies to decrease fees and increase postage savings.
Expand the use of barcodes to increase efficiency in cost accounting of outgoing mail.
Eliminate costly postage meters and other duplicate equipment used by agencies.
Physically position the SMS operations closer to the Seat of Government.
Require agencies to consult with SMS before printing mail pieces or envelopes to ensure the piece is properly designed for USPS standards and efficient processing.
Standardize envelope size, type, and font to obtain maximum postage discounts and efficiencies.
Reduce the number of P.O. boxes held by state agencies.
Standardize the design of inter-agency envelopes to prompt users to fill in all necessary information
Increase mail runs to encourage more agencies to utilize the services
Expand the SMS inter-agency routes to increase the network that agencies can send mail for free.
Further develop best practices and rollout to agencies.
Continue to consolidate mail operations from smaller agencies.
Utilize the state contract for presorting abnormal size mail that offers a substantial cost savings over regular USPS rates.
Increase reliability of SMS mail with scanner equipment to track routes and packages.
Reduce unwanted mail like promotional mail pieces that costs agencies time to process and handle.
Educate and take a statewide approach to address cleansing of mailing address lists by looking at software solutions that could be utilized by all agencies.
Create a centralized drop box(es) for SMS to pick-up mail for agencies that occasionally need a late drop.
Explore opportunities with colleges and agencies outside of Richmond.

Performance Measures

Any state agency that meters outgoing mail should be required to gather and report data on that operation. The data should be sent monthly to SMS to compile a consolidated report. This data should be broken down into two sections: data from Richmond area offices and data from field offices outside of Richmond. The items listed below need to be a part of any performance measure related to SMS:

The number of postage meters owned or rented.
The number of P.O. boxes rented.
The monthly piece count for incoming mail.
The monthly piece count for outgoing mail.
The monthly count of letters that are presorted.
The amount spent on postage for outgoing mail.
The number of reportable mail incidents each month as defined by SMS.

A more detailed survey about agency postal operations could be conducted every couple of years to gather additional data.

Mail Security

The second study by Federal Engineering (June 2005), Commonwealth of Virginia Mail Services Initiative, found that the Commonwealth does not have an overall security master plan in place that addresses the current and future security requirements necessary for being considered as an integrated approach to mail security.The Federal Engineering study offered that an effective mail security program must have many objectives, including:

Protecting employees and building occupants;
Minimizing the likelihood of workers compensation claims and litigation resulting from providing an unsafe work environment;
Avoiding unwarranted, costly, and disruptive business efforts and evacuations;
Preventing the shutdown of facilities related to threats resulting in building damage or contamination;
Developing and implementing effective security best practices;
Maintaining a quality oriented employee security awareness training curriculum;
Providing training to employees on the use of security equipment;
Having effective and tested occupant emergency plans, communications plans and continuity of operations plans; and
Establishing facility and systems security standards, specifications and guidelines.

Current Mail Security Practices

Currently, a limited number of large state agencies and institutions practice some form of mail security and have procedures in place to provide such security. It is believed that these measures vary widely and only a few agencies have adequate procedures in place to alert mail personnel to a potential problem with incoming mail. The large majority of other agencies have no such procedures or training in place. For the most part, these agencies rely on the USPS mail screening.

The 2006 Virginia Acts of Assembly charged the Department of General Services’ State Mail Services (SMS) with the task of enhancing and implementing a more uniform mail security program within state government. As a result, SMS has made mail security a top priority. SMS has created the Commonwealth Mail Security Guide as a uniform resource to assist state agencies and their employees in keeping the mail stream safe and secure.

The Commonwealth Mail Security Guide provides best practice guidance for the following issues:

Recognizing suspicious mail and knowing how to handle it, including prevention of exposure, development of administrative controls, use of protective equipment, and engineering controls;
Developing a strong mail center security plan, supplemented with regular training exercises, rehearsals, and reviews helps instill a culture that emphasizes the importance of security;
Conducting a threat assessment that identifies: the assets and missions that must be protected; potential threats; vulnerability of agency assets and missions; impact or consequences if that asset was lost, damaged, destroyed or otherwise prevents the agency from performing its mission; and the risk level for each asset or mission;
Developing comprehensive incoming mail procedures to include: limiting access to individuals who deliver mail to the mail center; making personal protection equipment available to employees; requiring employees to wear photo identification; instructing employees to challenge any unknown person in the facility; considering beneficial equipment such as X-ray machines which can enhance security; inspecting mail for suspicious characteristics; giving extra care to letters and packages to senior officials whose names or positions give them higher public visibility; and establishing procedures for handling unexplained or suspicious packages;
Developing a loss prevention plan that prevents the theft of supplies, postage, mail and valuable information contained in sensitive mail;
Developing physical security in a mail center focused on the location and design of the mail center to mitigate threats;
Testing and training mail center employees in order to develop a culture of security awareness to enable them to handle threats and reduce the risk of an incident.

The following recommendations are offered about Mail Security:

The Commonwealth Mail Security Guide should be distributed to all agency heads and their mail center managers. Agency management should include mail security as a top priority to demonstrate to all employees that management is committed to their safety.
This Guide should be distributed by the Office of Commonwealth Preparedness and posted to their website.
Upon completion of a mail security risk assessment all agency and institution mail centers should develop a comprehensive mail screening and training program for their mail center personnel based on the Guide. Such training should be made mandatory for mail center personnel. The Department of Human Resource Management (DHRM) maintains an internet-based Learning Management System (LMS) with a number of educational and training programs for Commonwealth employees. SMS should work in concert with DHRM to make use of this training system by developing a mail security program as one of the modules of the LMS for training staff throughout the Commonwealth
Based on the risk assessment and development of a mail security plan, agencies and institutions should request sufficient funds in their budget to bring their mail operations up to a level deemed appropriate to mitigate identified risks. Agencies should consult SMS before purchasing equipment to make sure it is appropriate and opportunities for collaboration are not overlooked. SMS should geographically distribute available X-ray equipment to major mail centers. This equipment should be available to multiple agencies to reduce duplication.
SMS should work toward centralizing all incoming mail in the Richmond area in a remote facility for agencies and institutions that do not have the means to secure incoming mail at the level deemed appropriate to mitigate risk.
In addition to notifying the proper authorities (i.e. Virginia State Police) in regard to any mail incident or threat, agency and institutions should be required to track and report such security issues and incidents to SMS on the form provided in the Guide.
Agency and institution mail security plans should be incorporated in their COOP plans.
The Mail Security Guide encourages individual agencies to perform threat assessments. The Commonwealth should conduct a centralized/coordinated assessment across all mail operations.

Communication and Education

The complete report also addresses the need to educate agencies on consolidation, presorting, and security.

Mail Reduction

At one time, the Department of Taxation mailed an individual income tax booklet to every eligible taxpayer in Virginia so that they would have the applicable forms and instructions necessary to complete and file their income tax return (approximately three million). Over the years, as taxpayers and tax practitioners began using software to prepare and file the tax returns, the department decided to cease sending tax booklets to taxpayers that had filed a return electronically or had sent in a paper tax return that was printed from computer-generated software. The idea being that they did not need paper returns and instructions because these taxpayers used a computer and had access to all the information online. This shift dramatically lowered printing and mailing costs for the Department of Taxation and today less than 500,000 tax booklets are mailed.

There are potentially many areas where mail can be reduced, saving on postage as well as printing and paper.

Thanks to everyone who made this Operational Review possible.

Co-Team Leader: Senator Ryan McDougle
Co-Team Leader: Delegate Mark Sickles
Coordinator: Bobby Myers, Department of General Services
Gerald Henson, Department of General Services
Patti Higgins, Department of Taxation
Adam Jackson, Department of General Services
David McGreevy, Department of General Services
Harold Moore, Department of the Treasury
Jennifer Parker, Senate of Virginia
Thomas Rozman, Department of Labor & Industry
Robert Young, Department of the Treasury

FLASHBACK: Virginia's Experience with Operational Reviews

2008-07-08T06:30:00.001-04:00

To mix it up a bit today, we wanted to repost this article, presented by Delegate Saxman and Bill Leighty, former chief of staff to Governors Warner and Kaine, to the American Legislative Exchange Council. It is a good background as to why the Operational Reviews were initiated and an additional insight about the process by which these reviews were carried out.

Virginia's Experience with Operational Reviews
By Delegate Chris Saxman, Chairman Cost Cutting Caucus and Bill Leighty, former chief of staff to Governors Warner and Kaine

Presented to the American Legislative Exchange Council

December 8, 2007

In 2005, Governing Magazine recognized Virginia as the Best Managed State in America. The Government Performance Project report stated, “There is little that Virginia does not do well in government management. That’s been true for a while. But it (Virginia) keeps looking for improvements, and very often finds them.”

Being rated by a national magazine, widely circulated in government circles, is wonderful. But as any citizen knows, the cost of government continues to grow, often at a rate that defies explanation. The taxpayers want an efficient and effective government that works toward reducing the cost of services. The taxpayers also want to know that the funds being entrusted by them are spent wisely, and only on necessities. Governments, whether they are federal, state or local, have an obligation to account for their expenditures of public funds and an obligation to constantly reexamine their expenditures. However, the public debate is often about programs that bring with them constituency groups and advocates that cause the political debate about cutting budgets to border on vitriol. Virginia decided on a course of action that looked differently at the “cost of government.”

Inspired by the efforts of the Virginia General Assembly Cost Cutting Caucus, chaired by Delegate Chris Saxman, and by the Executive Branch efforts toward formalizing and implementing performance management throughout the Commonwealth, Governor Timothy M. Kaine, then Chief-of-Staff William H. Leighty, Delegate Christopher B. Saxman and Senator Walter A. Stosch began an initiative in February of 2007 to conduct a series of Virginia state government "Operational Reviews." This effort was bi-partisan and jointly conducted by both the executive branch and both bodies of the legislative branch.

The concept was seemingly simple and similar to what taxpayer would consider when looking at their own household budgets. In other words, the same basic commodities that taxpayers would be concerned about in their own budgets were reviewed; the phone bill, electricity bill, water bill, trash bill, etc. The goal was to examine potential realized cost savings and increase employee productivity in a manner that would be readily understood by the taxpayer.

Initially the following areas were selected for review:
· Energy
· Water
· Fleet (automobiles)
· Travel
· Communications (voice and data; phones and cell phones)
· Print (copiers, printers and faxes)
· Mail (including premium overnight deliveries)
· Solid waste (paper recycling and materials)

Each review team was co-chaired by members from the legislative branch. The use of legislative chairs to review executive branch operations deserves some comment. The choice was a natural one, but not without controversy within the executive branch. Having legislators delve so deeply into such “operational issues” did not seem to come naturally to bureaucrats. But designating legislative co-chairs, it was argued, would be vitally important to get “buy in” for the reforms that would potentially follow. The executive branch felt that once fully exposed to the processes and procedures used to control costs in the executive branch, legislators would see that the executive was indeed doing a good job controlling costs. The only downside risk to the executive branch was that the teams might actually come up with ideas that would save taxpayer money. So, either way, the strategy was a “win-win.”

The Cost Cutting Caucus and the Senate leadership both readily agreed to take the lead and designate co-chairs for each review team. The co-chairs were balanced between the Senate and the House and between the parties, with a majority being Republicans because they were the majority party in both bodies. (It should be noted that Governor Tim Kaine is a Democrat)

For staffing of the review teams another innovative approach was used. Instead of asking senior agency personnel to staff the teams, a call for volunteers was put out to state employees from all branches of government. All branches of state government, legislative, executive and independent agency staff participated. The call for volunteers was targeted to the graduates of the state executive leadership training programs, both at the executive leadership level and the middle management level. The Governor’s chief of staff formally requested that all agency heads support the process by allowing volunteers release time to participate. By targeting the graduates of the Commonwealth’s leadership education programs it was felt staff with a demonstrated desire to better themselves, and that had proven they were amenable to innovation, would be recruited to staff the studies. An added bonus to this strategy was that state employees that were generally in the beginning of their careers and had not had previous experience working directly with legislators volunteered to help staff the studies. This allowed state employees unaccustomed to dealing with the legislative branch to build longer term relationships that would benefit them over their careers, and benefit the Commonwealth generally by building legislative-executive branch relationships.

The process was equally simple:
1. The teams, including the legislative co-chairs, were briefed on the total expenditures for each operational area (pulled from the state’s accounting system).
2. The teams received guidance from legislative co-chairs.
3. The teams researched the topic, obtaining necessary expertise from outside resources where necessary (Wal-Mart, for example lent a national executive to the Energy review team).
4. The teams drafted an initial report for presentation to the legislative co-chairs.
5. The legislative co-chairs reviewed/commented/approved the reports.
6. The report was sent to an Operational Review Oversight Committee for further consideration and action

Decisions to accept, revise or reject any recommendation presented in an Operational Review final report belonged to the Operational Review Oversight Committee. This committee is comprised of Delegate Christopher B. Saxman (chair), Senator Emmett W. Hanger, Jr., and Secretary of Finance Jody M. Wagner. In all cases, the committee based its decisions on the expertise and data provided in the reports in combination with expertise and data from other sources (including stakeholders) relevant to the issue(s). Their goal was to test, tune and advance the very best recommendations in an effort to improve Virginia state government performance in the most cost-effective way possible. Specific decisions to advance a recommendation were always subject to all applicable laws, policies and processes. (I.e. the procurement process)

Currently all the reports are posted online at http://vacostcutting.blogspot.com/ for public comment and have been forwarded to the Governor’s office for review and implementation. Governor Kaine is currently formulating his budget and will present the 2008-2010 budget on December 17th, 2007. Should the Governor not implement the recommendations, the reports are also in the hands of the citizens and the General Assembly and available for action.

FLASHBACK: State Travel Operational Review Report

2008-07-07T06:40:00.000-04:00

We hope that everyone had a wonderful 4th of July holiday weekend!

Following up on last week's Operational Review Report Flashback on the Commonwealth's Vehicle Fleet, today we wanted to re-post the report from the State Travel Operational Review Team.

The Travel Operational Review Team was developed to examine Virginia government travel practices and develop recommendations for improved efficiency and ways to reduce costs.

Between July 2002 and December 2006, Virginia spent over $935 million of travel and related expenses. Almost one billion dollars was spent on travel over that time period. Of that, Virginia’s colleges and universities led the way by spending more than $368 million.

The Operational Review Team found numerous areas where money can be saved. A 10 percent decrease in travel related spending could have saved more than 90 million dollars over that time period.

Top Ten Agencies for Travel Expenditures

Colleges and Universities $368,106,226
Department of Medical Assistance Services $263,754,940
Circuit Courts $16,592,673
Department of State Police $12,109,815
Department of Rehabilitative Services $11,283,478
Department of Social Services $11,116,890
State Corporation Commission $8,803,189
Department of Juvenile Justice $8,552,148
Department of Agriculture and Consumer Services $6,744,487
Department of Motor Vehicles $6,220,199

General Cost Drivers

Increases in allowed meals, lodging, per diem, and mileage reimbursements for employees driving personal vehicles.
Training requirements and certifications
Agency missions—visiting restaurants or nursing homes to name two examples
Lack of centralized management practices for travel.

Best Practice Recommendations

Statewide consistency in travel management and limits on travel spending
No receipts required beyond hotel receipts; designed to save time and dollars in the handling of paperwork
Enterprise contract. Reduces number of vehicle fleet and associated maintenance costs.
Require vehicle transportation calculations. Prior to each trip, determine whether paying mileage reimbursement for personal vehicle of renting vehicle is more cost effective.

Private Sector Travel Practices

Use a travel management agency to arrange all travel
Employees follow guidelines for meals, lodging, etc.
Negotiate rates with rental car companies, airlines, and hotels

Overall Recommendations from the Report

Automated the Travel Reimbursement Process. Currently, the travel reimbursement process is a manual one. The traveler may key travel information into the voucher but it must be printed, signed by the traveler and supervisor and a hard copy must be forwarded to the accounting department for processing. Automating the travel process would allow a person to make reservations, book tickets on common carriers, arrange for vehicle transportation on-line and when the process was completed, key the data into the travel voucher which would be approved and processed on- line, thereby eliminating paperwork and accounting entries.
Include travel on the Governor’s Score Card. The Governor has developed a scorecard where certain aspects of government are tracked. The committee suggests that statewide travel compliance be included in this process as its own line item and not as part of other expenditures reported to create more public awareness and agency sensitivity to these expenditures.
Re-evaluate travel spending after implementation of the new statewide accounting system. One of the limiting factors for the committee was the inability to obtain drill downs into the various expenditures. The current accounting system, CARS (Commonwealth Accounting and Reimbursement System) does not permit drill downs. There is a new system scheduled for implementation in 2010. The Committee suggests that after this implementation, a further review of travel costs with the enhanced ability to drill down through the data to analyze who, when, where, and why travel dollars are spent.
Expand the use of Computer Based Training modules for training state employees. Training is presently obtained by agencies, colleges and universities in many ways from multiple resources. Designing and developing a statewide contract with a computer based training company or companies to train employees would allow agencies to save money and time by allowing employees to train at their desks or at home, rather than traveling to another location. The committee also suggests exploring the use of more teleconferencing facilities versus physical travel to training destinations.
Increase the use of Teleconferencing for training. VDOT has used teleconferencing to train for several years and this innovation saved thousands of dollars in training travel. While VITA has not worked on the integration of teleconferencing equipment for all agencies to a universal one, the committee suggests that this project be given a higher priority so agencies could save more dollars teleconferencing training and other business processes.
Establish stricter limitations on conference travel. One of the largest uses of state travel money is for training and conference travel as a whole. These costs represented some of the largest travel expenditures by line item. They totaled twenty-three percent or $221,484,167.34 of the $935,287,354.89 of the dollars spent in all of the travel categories for the period reviewed. Does an agency really need to send five people to a conference? The problem is that it is difficult to quantify “necessary”. Currently, there is a policy and procedure limiting the number of conferences or the number of people who may attend conferences. Conferences do not necessarily include training, as they are frequently more of a networking opportunity. Stricter limitations and greater scrutiny on the frequency and number of persons attending conferences would save travel dollars.
Implement a mandatory statewide travel contract. There are some agencies, colleges and universities that have implemented a travel contract with one firm making travel arrangements. Some institutions also have contracts with more than one firm, which further dilutes the bargaining strength of the Commonwealth. The majority of agencies have no travel contract but negotiate every trip individually. It would reduce costs for lodging and transportation if the state would use its statewide negotiating power to obtain one contract with a firm to manage all travel. This would also create a centralized financial reporting system that would facilitate better financial management of these costs.
Market DGS’ Enterprise Car Rental program to all agencies. There are several features in the contract that were not listed in the travel policy. One of these features is the delivery clause in the contract. A traveler may arrange to travel in a state car and the company will deliver the state car to the site. Marketing the contract’s special features would enhance its use by other agencies and reduce the cost of travel by car.
Revisit the Enterprise contract in 18-24 months to determine its cost effectiveness. The Enterprise contract had only been in use for a few months when the committee reviewed the process. There has not been sufficient time to determine the cost effectiveness of the contract and consequently, it should be reviewed in 18-24 months.
Codify allowed training travel in the appropriations act or implement an executive order to limit this type of travel and require a 10% decrease in spending across all agencies.

Thank you to the Travel Operational Review Team for their work and the above findings. Team members include Delegate Scott Ligamfelter, Senator Brandon Bell, June Kimbriel of the Department of Corrections (Team Coordinator), Debbie Madison of the Department of Corrections, Charlotte Mary of the Senate Clerk’s Office, Seward McGhee of the Department of Correctional Education, Ray Pethtel of the Virginia Tech Transportation Institute, Liza Robison of the Department of General Services, Wendell Vest of Virginia Tech, John Wszelaki of the Department of Alcoholic Beverage Control.

FLASHBACK: Fleet Operational Review Report

2008-07-04T08:00:00.002-04:00

First, we'd like to wish everyone a very happy and safe 4th of July! We hope you have the chance to celebrate our nation's birthday with friends and family. We would also like to send a very special thank you to the brave men and women in uniform who have, throughout our nation's history, sacrificed, and continue to sacrifice, so selflessly to defend our nation, our freedoms and the freedom of people around the world.

For us here at VACostCutting, as we celebrate the founding of our country, we recognize the importance of always striving to improve the way government operates. And with many folks on the roads this holiday weekend, we thought we'd flash back to the report from the Fleet Operational Review Team. Enjoy!

Vehicle Fleet Operational Review

The Operational Review Team report on the state vehicle fleet is complete. Virginia’s vehicle fleet includes approximately 26,000 vehicles either registered with the DMV or used for tasks not requiring DMV registration. DMV registered vehicles include vans, sedans, SUVs, pick-ups, trailers, dump trucks, tractor trailers, buses. Non-registered vehicles include specialized forestry equipment, specialized farming equipment, bulldozers, backhoes, motor graders, generators, specialized dump trucks.

This reports offers status and recommendations in the following areas:

Consider Potential for Operational and Cost Efficiencies

Vehicle and equipment acquisition policies and procedures
Fleet and equipment maintenance policies and procedures
Fueling processes and the Commonwealth’s fueling infrastructure
Vehicle and equipment operator training and monitoring

Vehicle and Equipment Acquisition Policies and Processes

Justification Individual agencies currently evaluate their own needs. During the review process, it was revealed that there are no consistent policies or procedures regarding vehicle mission justifications, or guidelines that specify the types of vehicles that are acceptable for certain missions. Currently individual agencies evaluate their vehicle needs. Once the agency identifies its registered vehicle requirement, the agency acquires the vehicle in accordance with applicable procurement laws and regulations. Specifically, for registered vehicles, an oversight process is currently in place. The process requires that the agency head submit to the Department of General Services, Office of Fleet Management Services (OFMS) a request to approve a registered vehicle purchase.
Purchase and Inventory Management After review, if the request is approved, the Department of General Services either returns the approval to purchase the vehicle to the requesting agency or adds the vehicle to its list of vehicles for purchase. The DGS, Division of Purchases and Supply (DPS), whose mission is to set procurement policy and procedures for non-technology and non-professional services and establish state-wide contracts consolidating agency requirements to achieve volume discounts, maintains a variety of vehicle contracts ranging from compact cars to school buses. DPS vehicle contracts are mandatory for use by state agencies. Each contract is written for a specific type of vehicle e.g. compact vehicles. They are allowed buy from a supplier or to factory order the vehicles. This process works well for a number of reasons. The contract price is in reality driven by the amount of concessions the manufacturer offers the dealer who wins a contract. These concessions often exceed over $5,000.00 per vehicle purchased. Virginia obtains some of the best vehicle prices in the nation.

Fleet and Equipment Maintenance Polices and Processes

Maintenance and operation of registered vehicles encompasses many functions. The two primary operators of cost in this category are the scheduled and unscheduled maintenance or repair of vehicles, and the fueling activities performed by the agencies. Maintenance practices across agencies are not uniform but a mixture of maintenance providers, state owned shops, and commercial shops are utilized.

DGS, Virginia Tech, University of Virginia and VDOT are the only agencies known to have a fleet management system. Some other own maintenance shops to perform repairs but do not have a fleet management system
Key emergency, first responder agencies own and operate their own shops to ensure that they have full operational capability during the annual series of emergencies related primarily to snow, flooding, hurricanes and other types of emergencies.
VDOT has a network of repair facilities strategically located throughout the Commonwealth. These facilities are staffed with some of the best trained and certified technicians and managers in the country on the widest range of heavy equipment used by the full range of agencies.
DGS, OFMS began an extensive re-engineering of its fleet management operations in late 2005. OFMS implemented a state-of-the-art automated fleet management system, known as FASTER. Over the first fifteen months of operation, OFMS has achieved a high level of success in capturing maintenance, operation, and cost data on DGS owned vehicles.

Fueling processes and the Commonwealth’s fueling infrastructure

In fiscal year 2006, the Commonwealth Accounting and Reporting System (CARS) documented expenditures of $47,911,449.59 for gasoline and diesel fuel.

The Commonwealth operates bulk fuel sites to support emergency state needs and day-to-day operations. Many of these sites are controlled by individual agencies and do not accept common fuel card.
No comprehensive map or information exists showing the location or the capacity of other state-owned fueling sites.
From an enterprise perspective, consolidated data on fuel tank levels at state owned and operated fueling sites are not readily available in real time from a centralized fuel management system.
The Commonwealth is not proactive in forecasting future fuel costs or leveraging its fuel volume purchasing power.
Fuel data from VDOT sites and fuel data from DGS commercial purchases are not centrally integrated thus requiring reporting information from two separate systems.
The cost to agencies for fuel at commercial fuel sites using the fuel purchase card is the same price for fuel purchased at state-owned bulk fuel sites.

Vehicle and Equipment Operator Safety Training and Monitoring

The Commonwealth owns approximately 26,000 vehicles and equipment over a half a billion miles on an annual basis, and experienced approximately 2.5 million dollars last year in vehicle damage claims, as reported by the Division of Risk Management. Based on current industry standards, statistically the Commonwealth has an excellent accident record.
Most state vehicle operators have a Commercial Operators License or a regular driver’s license. State employees that operate vehicles that require possession of a CDL are managed under strict federal rules and regulations related to training, certification, and random drug testing programs. CDL operators are required to meet rigorous operator testing and monitoring and the review team determined that state agencies with CDL operators meet testing and monitoring requirements
There are few statewide policies in effect that address non-CDL operators. There is no requirement that each state employee that drives a state vehicle have a pre-employment driving record review, or annual driving record reviews
The Commonwealth is self insured. The Division of Risk Management operates a program that charges an annual per vehicle premium to agencies based on data regarding past experience and their actuary.When a state owned vehicle is in an accident, it is a requirement that the Virginia State Police is contacted by the vehicle operator and that the State Police respond to the accident, investigate, and prepare a crash report
DGS reported that their approximate 4,000 passenger type vehicles were involved in approximately 300 accidents in FY 2006, 119 of these vehicles were total losses. Approximate repair and loss costs, resulting from accidents, for FY06 was approximately $500,000. Other costs experienced by the Commonwealth as reported by DGS include vehicle usage violations such as: unpaid parking tickets, photo enforcement citations for running red lights, and speeding.

Recommendations

Vehicle acquisition policies and procedures

Commonwealth does a good job procuring vehicles. In most cases the Commonwealth leverages its buying power by consolidating purchase volume into statewide contracts. EX. 2007 Malibu - State contract price = $13,075, MSRP = $20,795. Ex 2007 Dodge 1500 pick-up flex fuel • State contract price = $16,363, MSRP = $22,139

Fleet and equipment maintenance policies and procedures

DGS, in collaboration with affected agencies, develop and implement a plan for all agency owned sedans, SUVs, vans, and pickup trucks that are not currently managed by an automated vehicle management application to be assigned to and managed by the DGS VMCC.
Form a study group, facilitated by DGS and VDOT, comprised of agencies that own, operate, and maintain vehicle maintenance shops. The group will collect data on: location of each maintenance facility, type of services provided, and cost to owning agency to maintain and operate its maintenance facilities. A study group objective will be to evaluate, from an “enterprise” perspective the appropriate balance of state-owned shops, when considering commercial shop availability, needed to support the Commonwealth’s vehicle maintenance needs.

Fuel Processes and Commonwealth fueling infrastructure

Commonwealth purchases approximately 14,670,000 gallons of fuel annually (8,365,800 diesel; 6,305,200 gasoline). Fuel is purchased in bulk to fill state-owned bulk fuel tanks that are available for use by state agencies. A commercial fuel card for fuel purchases at commercial fuel sites is available to state agencies. Bulk fuel contracts are administered by VDOT. The commercial fuel card contract is administered by DGS.
Commonwealth should combine the fuel volume from the bulk fuel contract and the commercial contract into a single procurement action to leverage the Commonwealth’s total fuel purchase volume to achieve most favored pricing.
Form a study group, facilitated by DGS and VDOT, and comprised of agencies that own, operate, and maintain state-owned bulk fuel sites, to collect data on location of each site, assets supported, volume of fuel storage, volume of fuel dispensed, and cost to own, maintain and operate the site. A study group objective will be to evaluate, from an “enterprise” perspective the appropriate balance of state-owned bulk fuel sites, when considering commercially available fuel sites, needed to support the Commonwealth’s fuel needs. Special emphasis, as part of the study group’s consideration, shall be placed on the emergency preparedness fuel infrastructure needs of the Commonwealth. Virginia Department of Emergency Management and Office of Commonwealth Preparedness representatives must be represented on the study group.

Vehicle operator training and monitoring

DGS develop a training program that provides basic safety instruction on the use and operation of vehicles and actions to take if involved in an accident. Also, form a study group facilitated by DGS with participants from interested agencies and institutions of higher education, to study the need for verifying operators of state-owned vehicles have a valid license prior to the operation of a vehicle.

Thanks to all those who made this report possible.
Delegate Danny Marshall
Delegate Steven Landes
Senator Nick Rerras
Joe Damico – Department of General Services (team coordinator)
Paula Dehetre – Governor's Office For Workforce Development
Quintin Elliot, Department of Transportation
John Garrett – Senate Clerk’s Office
Seward McGhee – Department of Correctional Education
Moh Mirshahi – Department of Transportation
Steve Mouras – Virginia Tech
Don Rainey – Department of Social Services
Warren Rhodes – Virginia Marine Police
Tom Rozman – Department of Labor and Industry
Cookie Scott – Department of Corrections
Brad Williams – Department of Forestry

FLASHBACK: Energy Operational Review Report

2008-07-03T07:49:00.000-04:00

Over the next few weeks, we'll be reposting the reports from the Operational Review Teams, led by Delegate Chris Saxman, and former Chief of Staff, Bill Leighty. (In case you missed it, you can read more about the goals and formation of these Operational Reviews here.)

These reviews across state government provide us an important roadmap for how we can increase efficiency in many areas of state government. It is imperitive that we begin implementing these recommendations to realize the full cost savings.

(For the Energy Operational Review Team's Interim update, click here.)

Energy Operational Review

The Energy Operational Review is complete. The report identifies overall costs and cost drivers, past and current state government practices related to energy management, best practices that can be applied to the Commonwealth’s operations, measures current performance against best practices, and offers recommendations on how to implement best practices and how to harness Virginia’s size as an energy consumers to reduce costs. Costs Virginia state agencies and institutions spent approximately $243 million in 2006 on energy to operate their facilities. This has increased from approximately $162 million in 2002. This is an average 12% per year growth. Commonwealth agencies and institutions also spent nearly $74 million in 2006 to repair and maintain energy-using electrical and mechanical equipment. This increased from approximately $66 million in 2002, or by approximately 3% per year.

Increased costs are driven by increases in state building square footage, increased natural gas prices and repair and maintenance costs associated with state government’s aging energy infrastructure.

The Operational Review Team offered the following recommendations to increase efficiency, performance, and cost savings.

Recommendations

A central organization to provide state government with energy management services. This group would be named the Virginia Energy Management Program (VEMP). It would reside in the Department of Mines, Minerals, and Energy. This central group would provide support, outreach, and training to agency facility staff including agency energy managers, facility operators, maintenance and operations personnel, procurement, and administrators. This group would also provide specialized technical expertise to agencies to improve their knowledge of operation and maintenance procedures, energy conservation fundamentals, new technologies, and other skills to improve building performance. Potential savings: $20 million.
Aggregated procurement of natural gas. The Commonwealth should aggregate its natural gas needs and have centrally employed purchasing specialists purchase natural gas for all agencies. Specialists would develop and implement a procurement plan to meet agency budget requirements, lower risk, ensure adequate supply, and obtain the lowest price available. Potential savings: $8 to 10 million.
Establish a Commissioning/Recommissioning Pilot for State-Owned Buildings. The Commonwealth should implement a building commissioning/re-commissioning pilot for state facilities, with program expansion based on confirmed savings in pilot state facilities. Potential savings: $2 million over 10 years
Automate Utility Billing. The Commonwealth should develop an Electronic Data Interchange system to track and manage energy consumption among Commonwealth facilities. EDI would allow the Commonwealth to begin measuring energy costs and consumption and identify performance-based energy opportunities while reducing the time needed to manually enter billing data. As the database becomes populated, it would allow the Commonwealth to use the data to evaluate, analyze, and measure building performance using the ENERGY STAR Portfolio Manager tool. Potential benefit: eliminate the need for manual entry of over 10,000 paper utility bills into the state accounting system each month, eliminate entry errors, and reduce utility late payment charges.
Self-fund Energy Efficiency Projects with a State Revolving Fund. The Commonwealth should create a $20 million energy savings project revolving fund to finance energy projects. This fund would be administered by VEMP. Agencies would use operating budgets to pay back into the fund over an agreed-upon period from the accrued energy savings. To increase the size of the fund for future projects, a fee of 1% would be added to the amount to be repaid by the agency. An agency borrowing $2,000,000 for 5 years would repay $2,020,000 over the term of the agreement. Potential benefit: This funding mechanism would allow the Commonwealth to “borrow from itself” because agencies would use existing funds. Based on the savings generated through avoided costs, money would be generated and distributed back into the fund for future projects.
Establish a State Facility Demand Response Program. The Commonwealth should develop a database of emergency electric generation equipment and capacity and a communication system to coordinate agency and university participation in the PJM Demand Response Program. Upon a demand peak or emergency, each agency would decide to participate in the program. The PJM demand reduction program payments would be returned to the agencies to offset other utility costs. Potential benefit: state agencies would be better prepared to meet an energy shortage.
Encouragement of Telework and Use of Mass Transportation. Increase the number of employees who use telework and mass transportation opportunities. This would reduce employee commute times and remove some single passenger vehicles from the road. Potential benefit: reduces energy use, environmental impact, and traffic congestion.
Agency Participation in the Virginia Environmental Excellence Program. State agencies and institutions should be encouraged to participate in the Virginia Environmental Excellence Program to further demonstrate a commitment to enhanced performance in building operations. Potential benefit: Dollar benefits would vary from agency to agency.

These recommendations, coupled with best practices already implemented, including energy savings performance contracting, an Executive Order in 2003 directing state facilities to reduce energy use by 10 percent, and leveraging the buying power of the Commonwealth to negotiate cheaper electric and natural gas contracts will result in millions more in savings in the coming years. Performance contracting alone has the potential to result in over 110 million in energy savings in the coming years. Additionally, some agencies as well as many of Virginia’s colleges and universities have personnel trained to improve operation and maintenance procedures, energy conservation fundamentals, new technologies, and other skills to improve building performance. Twenty five agencies already have a dedicated staff member focusing on energy management.

Thank you to everyone who worked to make this report possible. Participants included:

External Subject Matter Experts:

James Stanway, Wal-Mart
Gina Rye, Food Lion
Irene Kowalczyk, Mead Westvaco
Laura Helmke, U.S. Environmental Protection Agency
Cyrus Nasseri, U.S. Department of Energy (FEMP Division)

Internal Subject Matter Experts:
Joe Damico, Department of General Services
Tom Young and Walid Daniel, Department of Corrections
Karen Jackson, Office of Telework Promotion and Broadband Assistance
Linwood Spindle and Paul Higgins, Department of General Services
Norma Roberts, Department of Accounts
Andrew Diefenthaler and Amy Garner, Department of General Services
Sara Wilson, Department of Human Resources Management
Cheryl Gomez, University of Virginia
Steve Matsko, Bureau of Capital Outlay Management
Corey Hill and Charles Badger, Department of Rail and Public Transportation
Shirley McNutt, Department of General Services, Division of Engineering and Buildings

Department of Mines Minerals and Energy Staff:
Thomas Thompson, Energy Manager
John Broughton, Energy Program Manager
Eileen Deane, Energy Program Manager
Charlie Barksdale, Utilities and Performance Contracting Manager

Committee Members:
The Honorable Emmett Hanger, Senate of Virginia
The Honorable Harvey Morgan, Virginia House of Delegates
Tim Bass, Deputy Secretary of Technology
Stephen Walz, Senior Advisor for Energy Policy
Philip Benton, Department of Rehabilitation Services, Director of Financial Services
Kim Briele, Virginia Tech, Senior Electrical Engineer
Bruce Brooks, Department of General Services, Director of Facilities Management
Allen Mitchell, Department of General Services, Energy Manger
Elizabeth Robison, Department of General Services, Property Disposition Specialist

2008-03-17T10:00:00.002-04:00

Fiscal Crossroads of 2008

The United States is facing a dire fiscal situation if significant changes aren't made in the next decade. Reigning in federal spending is as important as any issue facing the United States in the 21st Century.

On March 15, The Wall Street Journal published an excellent column by South Carolina Governor Mark Sanford addressing the crossroads we find ourselves at in the 2008 election.

Last week, I asked David Walker, the U.S. comptroller general, why he is quitting his job to travel the country on a "fiscal wake-up tour." His answer: Because we have only five to 10 years to address the federal government's looming shortfalls before we're faced with a fiscal crisis.

In about a decade, the twin forces of demographics and compound interest will leave few options for solving the fiscal mess Washington has created. By then, our options will all be ugly. We could make draconian spending cuts, or impose large tax increases that will undermine our economy in the competitive global marketplace. Or we could debase the value of the dollar by printing a large amount of money. This would shrink the overall value of the federal government's debt. It would also wipe out the value of most Americans' savings.

Mr. Walker is right. And I join many others in saying that federal spending is now as significant an issue as the war on terror, federal judgeships and energy independence. The U.S. stands at a fiscal crossroads -- and the consequences of inaction, or wrongful action, will be real and severe.
Continue reading here.

2008-03-12T14:01:00.002-04:00

A Consequence of Gas Tax Increases

Some legislators are proposing a statewide gas tax increase to fund transportation. Besides the prospect of reaching a point of diminishing returns as gas prices spike and Virginians eventually begin to drive less, a gas tax increase is also poor policy because it serves to perpetuate Virginia’s donor status when it comes to federal distribution of transportation dollars.

Currently Virginia only gets back 92 cents for every dollar sent to the federal government. The higher our state gas tax, the lower the likelihood the federal government will equalize what Virginia gets back versus what we already send to Washington.

While some legislators may want to subsidize transportation projects in recipient states, the vast majority of Virginians might not.

Below are the rate of return figues for all 50 states.

Alabama

106.91%

Alaska

526.85%

Arizona

92.00%

Arkansas

105.44%

California

92.00%

Colorado

92.00%

Connecticut

128.69%

Delaware

163.92%

Dist. of Col.

423.03%

Florida

92.00%

Georgia

92.00%

Hawaii

175.54%

Idaho

143.78%

Illinois

92.00%

Indiana

92.00%

Iowa

92.00%

Kansas

95.01%

Kentucky

96.14%

Louisiana

95.48%

Maine

95.62%

Maryland

92.00%

Massachusetts

92.00%

Michigan

92.00%

Minnesota

92.00%

Mississippi

95.80%

Missouri

97.80%

Montana

227.10%

Nebraska

99.12%

Nevada

93.53%

New Hampshire

100.47%

New Jersey

92.00%

New Mexico

114.22%

New York

109.79%

North Carolina

92.00%

North Dakota

207.44%

Ohio

92.00%

Oklahoma

92.00%

Oregon

101.87%

Pennsylvania

113.33%

Rhode Island

217.23%

South Carolina

92.00%

South Dakota

197.75%

Tennessee

92.00%

Texas

92.00%

Utah

92.30%

Vermont

204.85%

Virginia

92.00%

Washington

92.00%

West Virginia

169.31%

Wisconsin

102.95%
Wyoming

151.89%

2008-03-10T10:43:00.002-04:00

Where Does Your Money Go?

When a Virginian buys groceries, purchases a cheeseburger and fries, or pays a utility bill, he or she is presented with a receipt detailing the cost of individual items or services purchased, the tax included in the total, and a total amount due. The issuance of an itemized receipt is a standard practice that holds the retailer accountable and makes the customer aware where every penny goes.

Because Virginians are limited insofar as their ability to take their business elsewhere when it comes to paying taxes, that is all the more reason to demand an itemized tax bill that details how much and on what services government is spending their hard earned money. With Virginia facing an uncertain fiscal outlook over the course of the biennium and beyond, and the ever present specter of tax increases lurking on the horizon, it is imperative that Virginians know how their money is being spent.

Virginia's Auditor of Public Accounts recently created a new webpage using Commonwealth Data Point titled "Where Does Your Money Go?" This page is a step forward in efforts to put transparency in taxation into action and allow Virginians easy access to such information.

Back in 2005, in a victory for transparency, Senator Walter Stosch secured passage of legislation which required Virginia's Auditor of Public Accounts to create a website, now called Commonwealth Data Point, where anyone can access state expenditure, revenue, and demographic data for the last decade. Building on this achievement, Delegate Saxman worked with the Auditor’s office to expand the functions of Commonwealth Data Point to include a website that puts itemization into action.

Using this website, anyone can enter an amount of individual income tax, sales and use tax, or other direct taxes paid by an entity or individual to the state of Virginia for the prior fiscal year and generate a report displaying, both in percentages and real dollars, how their general fund tax dollars were spent. The report also gives percentages for the four previous fiscal years as well—meaning Virginians can see how spending priorities have changed over time.

For example, according the Data Point, if a Virginian pays $1,000 in income taxes, 35 percent or $350 of that was spent on K-12 education in Fiscal Year 2007. Taken in comparison with the four prior fiscal years, it is clear that spending on education has increased from 31 percent in 2003 to 35 percent in 2007—with no appreciable increase in the quality of education or quality of outcome in Virginia’s public schools.

Transparency can still improve in Virginia, but this is a major positive development.

Take a moment to look at the new Data Point website here.

2008-01-11T13:54:00.000-05:00

How much do private schools save Virginia?

According to an expert with the General Assembly's Joint Legislative Audit and Review Commission (JLARC), there are approximately 125,000 K-12 aged students attending private schools in Virginia. Approximately 24,000 students are home schooled.

If these students all entered the public schools system, what would the fiscal impact look like?

In FY 2007, Virginia spent roughly $3,750 per student for State Standards of Quality regular instruction purposes. When add-on costs (special education, vocational education, remedial instruction and English as a second language) are included the figure is $4,229 per student. Using these two figures a high and low end of the cost estimate can be established. Do the math and you arrive at a cost between $468 million and $531 million dollars.

Do the same math for home schooled children and you get a figure between $90 million and $101.5 million dollars. Overall, kids educated in private schools and home schools saved the Commonwealth between $558 and $632.5 million per year.

Given the fact that parents privately educating and home schooling their children are saving the Commonwealth roughly over half a billion dollars per year, isn't tax relief on that basis in order? Virginia offers tax credits to encourage land conservation and historical preservation. Why shouldn't we invest in our future as well by offering tax credits to parents and opening more educational opportunities for all children?

2007-12-13T12:28:00.000-05:00

Pelosi spends $16,000 tax dollars on flowers

According to The Hill, Nancy Pelosi has spent $16K this year on flowers. Overall, Pelosi's office has spent $3 million dollars over the first nine months of 2007, compared to 1.8 million spent by Speaker Dennis Hastert over the same period in 2006. Republican leader John Boehner's expenses have also increased this year.

It his hard to argue that fiscal responsibility has returned to Capitol Hill with $16,000 spent on flowers.

Read the full story

2007-12-12T17:13:00.000-05:00

Scotland looks to Virginia

To ensure that Scotland is making progress, the Scottish National Party, which controls the Scottish Parliament, is modeling government management procedures after Virginia's.

From the SNP's website:

We will bring forward proposals for new management and monitoring arrangements for government and agencies, based on the successful model in Virginia, USA, so we can bring greater rigour and success to the delivery of public policy in our nation.

2007-12-10T11:25:00.000-05:00

Virginia’s Experience with “Operational Reviews”

By Delegate Chris Saxman, Chairman Cost Cutting Caucus
and Bill Leighty, former chief of staff to Governors Warner and Kaine

Presented to the American Legislative Exchange Council

December 8, 2007

In 2005, Governing Magazine recognized Virginia as the Best Managed State in America. The Government Performance Project report stated, “There is little that Virginia does not do well in government management. That’s been true for a while. But it (Virginia) keeps looking for improvements, and very often finds them.”

Being rated by a national magazine, widely circulated in government circles, is wonderful. But as any citizen knows, the cost of government continues to grow, often at a rate that defies explanation. The taxpayers want an efficient and effective government that works toward reducing the cost of services. The taxpayers also want to know that the funds being entrusted by them are spent wisely, and only on necessities. Governments, whether they are federal, state or local, have an obligation to account for their expenditures of public funds and an obligation to constantly reexamine their expenditures. However, the public debate is often about programs that bring with them constituency groups and advocates that cause the political debate about cutting budgets to border on vitriol. Virginia decided on a course of action that looked differently at the “cost of government.”

Inspired by the efforts of the Virginia General Assembly Cost Cutting Caucus, chaired by Delegate Chris Saxman, and by the Executive Branch efforts toward formalizing and implementing performance management throughout the Commonwealth, Governor Timothy M. Kaine, then Chief-of-Staff William H. Leighty, Delegate Christopher B. Saxman and Senator Walter A. Stosch began an initiative in February of 2007 to conduct a series of Virginia state government "Operational Reviews." This effort was bi-partisan and jointly conducted by both the executive branch and both bodies of the legislative branch.

The concept was seemingly simple and similar to what taxpayer would consider when looking at their own household budgets. In other words, the same basic commodities that taxpayers would be concerned about in their own budgets were reviewed; the phone bill, electricity bill, water bill, trash bill, etc. The goal was to examine potential realized cost savings and increase employee productivity in a manner that would be readily understood by the taxpayer.

Initially the following areas were selected for review:
· Energy
· Water
· Fleet (automobiles)
· Travel
· Communications (voice and data; phones and cell phones)
· Print (copiers, printers and faxes)
· Mail (including premium overnight deliveries)
· Solid waste (paper recycling and materials)

Each review team was co-chaired by members from the legislative branch. The use of legislative chairs to review executive branch operations deserves some comment. The choice was a natural one, but not without controversy within the executive branch. Having legislators delve so deeply into such “operational issues” did not seem to come naturally to bureaucrats. But designating legislative co-chairs, it was argued, would be vitally important to get “buy in” for the reforms that would potentially follow. The executive branch felt that once fully exposed to the processes and procedures used to control costs in the executive branch, legislators would see that the executive was indeed doing a good job controlling costs. The only downside risk to the executive branch was that the teams might actually come up with ideas that would save taxpayer money. So, either way, the strategy was a “win-win.”

The Cost Cutting Caucus and the Senate leadership both readily agreed to take the lead and designate co-chairs for each review team. The co-chairs were balanced between the Senate and the House and between the parties, with a majority being Republicans because they were the majority party in both bodies. (It should be noted that Governor Tim Kaine is a Democrat)

For staffing of the review teams another innovative approach was used. Instead of asking senior agency personnel to staff the teams, a call for volunteers was put out to state employees from all branches of government. All branches of state government, legislative, executive and independent agency staff participated. The call for volunteers was targeted to the graduates of the state executive leadership training programs, both at the executive leadership level and the middle management level. The Governor’s chief of staff formally requested that all agency heads support the process by allowing volunteers release time to participate. By targeting the graduates of the Commonwealth’s leadership education programs it was felt staff with a demonstrated desire to better themselves, and that had proven they were amenable to innovation, would be recruited to staff the studies. An added bonus to this strategy was that state employees that were generally in the beginning of their careers and had not had previous experience working directly with legislators volunteered to help staff the studies. This allowed state employees unaccustomed to dealing with the legislative branch to build longer term relationships that would benefit them over their careers, and benefit the Commonwealth generally by building legislative-executive branch relationships.

The process was equally simple:
1. The teams, including the legislative co-chairs, were briefed on the total expenditures for each operational area (pulled from the state’s accounting system).
2. The teams received guidance from legislative co-chairs.3. The teams researched the topic, obtaining necessary expertise from outside resources where necessary (Wal-Mart, for example lent a national executive to the Energy review team).
4. The teams drafted an initial report for presentation to the legislative co-chairs.5. The legislative co-chairs reviewed/commented/approved the reports.6. The report was sent to an Operational Review Oversight Committee for further consideration and actionDecisions to accept, revise or reject any recommendation presented in an Operational Review final report belonged to the Operational Review Oversight Committee. This committee is comprised of Delegate Christopher B. Saxman (chair), Senator Emmett W. Hanger, Jr., and Secretary of Finance Jody M. Wagner. In all cases, the committee based its decisions on the expertise and data provided in the reports in combination with expertise and data from other sources (including stakeholders) relevant to the issue(s). Their goal was to test, tune and advance the very best recommendations in an effort to improve Virginia state government performance in the most cost-effective way possible. Specific decisions to advance a recommendation were always subject to all applicable laws, policies and processes. (I.e. the procurement process)

Currently all the reports are posted online at http://vacostcutting.blogspot.com/ for public comment and have been forwarded to the Governor’s office for review and implementation. Governor Kaine is currently formulating his budget and will present the 2008-2010 budget on December 17th, 2007. Should the Governor not implement the recommendations, the reports are also in the hands of the citizens and the General Assembly and available for action.