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State Agenda, Part 1: Spending Status Quo Won't Work

Hartford Courant

January 03, 2010

Wishing the fiscal crisis away didn't work.

The Connecticut General Assembly in 2009 used all the gimmicks, picked all the low-hanging fruit, made no really hard choices and, not surprisingly, found itself a few months later with a deficit approaching $550 million.

Things will get worse — the state could face a $5.9 billion budget gap by mid-2013 — unless it lowers spending. To do that, it will have to do business differently. In short, if there has ever been a time to reinvent government in Connecticut, 2010 is the time.

Legislative leaders who couldn't bring themselves to make minor changes, such as eliminating nonessential small agencies, may need an infusion of courage from the Wizard of Oz to make big changes, but big changes are needed. They aren't necessarily bad.

In November, the governor's economic advisers met with a group of legislators to discuss spending cuts. Peter Gioia, chief economist for the Connecticut Business and Industry Association, offered three ideas:

1. Connecticut is third in the country in per-capita use of nursing homes. Home health care costs, on average, less than a third of the cost of nursing homes. Surveys, including a 2007 assessment by the University of Connecticut, indicate that most elderly people would rather stay at home. Nursing homes will always be a necessary part of the health care continuum, but making more use of home health care could save the state tens of millions of dollars, if not more.

2. State-operated group homes for people with developmental disabilities are about twice as expensive as those run by private entities. Even so, nearly 30 percent of group-home clients are still served in state-run facilities. Shifting them to private facilities would result in substantial savings, without reducing services or quality of life.

There will be, to be sure, some complications with state labor contracts and federal funding rules. Nonetheless, millions of dollars can be saved. This can be done.

3. For most of this decade, Connecticut has emphasized preparing state inmates for a successful re-entry into society. Thus, Gov. M. Jodi Rell was able to announce the closing of the small Webster Correctional Institution. If the state continues to innovate, it may be possible to close another facility. For example, nonviolent inmates suffering from mental illness may be treated in a different environment than prison at lower cost.

Another innovation to watch, this one from Florida, is called "faith- and character-based prisons." Volunteer inmates get intensive counseling, vocational education and character training and can take part in religious activities. Early results indicate this approach reduces disciplinary problems and decreases recidivism.

In addition, the legislature's Commission on Enhancing Agency Outcomes released more than 30 "proposed areas of focus" last month that it will look at in the 2010 session to reduce cost and increase efficiency. Many of these involve seemingly sensible things such as sharing services, master contracting, streamlined licensing and permitting, consolidating administrative functions and cooperative purchasing. Enough studying; the legislature has to get going these.

Perhaps the most intriguing idea is a consolidation of "steering" functions — policy and direction — across agency lines, as separate from "rowing" functions — the actual delivering of services.

This idea comes from the 2004 book "The Price of Government" by David Osborne and Peter Hutchinson. It focuses not on budget cuts but how what's left of the budget is spent. The idea is that funding streams in areas such as health care, housing, prisoner re-entry and economic development are consolidated so the policy leaders can purchase the services from the provider they consider best able to provide them.

This is the kind of innovative thinking that Connecticut needs to embrace, and quickly.