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Downsizing Bureaucracy 

Lt. Gov. Mitch Landrieu has launched a management program to cut red tape, kill duplications and streamline operations. Is state government really ready for this?

Whether you're a good government egghead or a cynical crackpot, it's difficult to find fault with making state government more responsive, less bureaucratic and increasingly adept. But to make it all happen, to eclipse antiquated systems and bury the fabled good-ol'-boy network, a process must be undertaken that is more easily preached than carried out.

Just ask Lt. Gov. Mitch Landrieu. When he left the House of Representatives in 2004 to take over the state's No. 2 post, he said he wanted change -- not quick and hurried change, but a complete and total transformation of state government.

No longer would his budgets be balanced by across-the-board cuts. Funds would be shifted around to the top priorities identified by each division of the Department of Culture, Recreation and Tourism in Landrieu's office. Division heads would have to make "offers" and "counter-offers" for their budgets and programs, competing against other division heads for funding.

It's a back-and-forth bartering process that has been used in some form or fashion by big business for decades, and it's a procedure that Landrieu wants implemented in state government.

The lieutenant governor says he can still hear his staff sighing, and see their eyes rolling, when he first dropped the bombshell on them. They thought he was crazy, overly ambitious and eager for an accomplishment. After all, they were accustomed to such management drivel -- every new administration comes in spouting the rhetoric of change.

"There was tremendous resistance when we first got there and implemented this," Landrieu says. "Change often comes very hard and people are suspicious of change early on."

But the tide may be turning. Landrieu has been touring the state announcing the fiscal overhaul, and he will present his new "budgeting for outcomes" process to the Legislature later this spring. Its fate there is uncertain.

The state's revised budget was compiled before, during and after last year's hurricanes -- and in the midst of severe cuts. At every step, it was clear that a major change was needed, says Angéle Davis, secretary of the Department of Culture, Recreation and Tourism and the point person overseeing the plan. "When you talk about a state department whose general fund has been cut by 25 percent, you can't keep doing things that have always been done," she says.

Three state parks have lost funding under the new budget, as have three welcome centers. A program that provides new books to state libraries also was axed. On the other hand, parks with low costs per visitor -- no matter their attendance rate -- were funded. A "Louisiana Marketplace" is being created to sell local products online and an international marketing program is being pursued.

"We're becoming more entrepreneurial, customer-focused, making programs work for the taxpayers and looking for the biggest return on our investments," Davis says. "Offers from our divisions had to be efficient to stay alive, and many of the more creative offers focused on economic recovery."

But the operational overhaul involves much more than budgeting. A new management plan has been put in place with the goal of boosting accountability, establishing result-oriented performance and changing the overall culture of the department. Here's how it worked:

Early on in the planning process, the department picked a few areas that needed immediate improvement and took steps to make it happen. Those steps are referred to as "quick wins." While the changes that transpired were simple, Davis says they set the tone for how future goals might be approached.

"(State) workers are not used to having the freedom to make recommendations to improve processes," she says. "But once they are empowered to ask why they do certain things, or why something operates a certain way, they do so. It's an analytical approach."

For instance, it used to take 27 days for parks, welcome centers and trade shows to request and receive informational material from the department. By examining the process, staff cut out a few middlemen, converted to an email system and sent requests directly to the distribution center. Not only did the changes cut the turnaround time down to just a few days, but it also saved the department $43,000 annually.

The new budgeting process and management plan came as a result of a study the department conducted with David Osborne of the Minnesota-based Public Strategies Group. Osborne, who has written five books on reinventing government, is a guru of sorts when it comes to this kind of work.

"Bureaucracy is the excretion of a thousand rules and a thousand steps," he says. "They build up over time. The reasons they are not routinely weeded out is because there is no competition. Private companies have to do this stuff or die."

If such talk sounds familiar, that's because it is. Making government run more like a business is a mantra that has been around for decades. The end results, however, have been mixed -- sometimes disastrous. Landrieu's team hopes not to repeat that history.

Former Vice President Al Gore, whom Osborne once advised, picked up the reinventing government gauntlet in the early 1990s. Former Defense Secretary Robert McNamara implemented statistical budgeting guidelines in Washington during his tenure there, based on a formula used by Ford Motor Co. And former President Jimmy Carter was a champion of zero-based budgeting in the late 1970s. None of those attempts at reform took permanent hold.

More recently, former Washington State Gov. Gary Locke, who Landrieu and Osborne cite as a success, implemented a priority-based budgeting system in 2002 -- but found himself facing a $1 billion deficit two years later. Locke proposed a massive tax hike to fix the problem.

Landrieu says the fiscal woes in the state of Washington cannot be blamed solely on the priority-based budgeting system or Locke's efforts to reinvent government. It's like comparing apples to oranges, he adds. Louisiana is facing an uncertain future because of the 2005 hurricanes, and a governmental overhaul must be pushed forward.

"This is not just about saving money," Landrieu says. "This is about transforming government."

While it might be about more than just saving money, the program isn't cheap. Osborne says he was paid an initial, one-time $50,000 consulting fee when the process began two years ago. That fee didn't require a bidding process, he says. Then, based on bids submitted for the plan he helped create, Osborne's firm was awarded a $700,000 two-year contract, which includes an option to renew in 2007 if needed.

When asked for a cost-benefit analysis of those expenses, Landrieu attempted a forward-looking assessment. If the program proves to be successful for his department, and if other areas of state government pick it up, Landrieu says the resulting savings would significantly outstrip the price tag.

For now, based on interviews with Landrieu and his staff, savings from the program do not appear to outweigh its costs, and the program has been an additional burden on the current departmental budget -- as any new program would. Ê

"The idea is to use the department as an example of how every other department can be run more efficiently," Landrieu says.

To do that, Landrieu must first sell the program to lawmakers, many of whom have pet projects that have been cut by the priority-based budgeting system. Legislators also will have to find ways to deal with constituencies impacted by cuts, and other departments will have to show some willingness to adopt the program.

It won't be an easy sell.

"We have turned the old process upside down," Davis says. "If people don't understand what we're doing or don't support the process, they could make trouble for us. But the process we use makes sense. We're making state government more competitive."

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