Nov/Dec 2009

State News: August 2009



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New Pew Report Shows How States Can Stabilize Economy

By Mikel Chavers, CSG associate editor
A new Pew Center on the States report released Wednesday shows how four states—Indiana, Maryland, Utah and Virginia—are using the downturn in the national economy as an opportunity to rethink how state government does business. These states are making policy and budget decisions based on how government programs measure up. The states are making smarter budget decisions as a result, according to the Pew Center on the States.
“States that make good budget decisions now can help stabilize the economy, soften the impact of the crisis on families, and spur a recovery that benefits the entire nation,” Susan Urahn, managing director of The Pew Center on the States, said in a press release. “In the midst of economic downturn, there is an opportunity to re-think how to run state government.”
And that’s the purpose of the report, called “Trade-off Time: How Four States Continue to Deliver.” Even though the states are making tough budget decisions and will likely continue to do so, the Pew report says these states are in a better position to make cost-saving decisions because of their efforts to evaluate the efficacy of government programs.
Pew says the trend, which it calls “performance-driven budgeting,” is growing. Thirty-nine states now include performance measures in agency budget requests—in fact, 42 states actually post some of the information and measures online, according to the report. Twenty-two legislatures use performance measures when making budget decisions, according to Pew.
Among the highlights of the report:
  • Utah is known for introducing its four-day workweeks where employees work 10-hour days, saving the state an estimated $3 million in energy costs and saving employees $6 million in yearly commuting costs, according to the report. Employee sick day and annual leave use has dropped 9 percent, the report said.
  • Virginia saved nearly $1 million by replacing private food service contracts at several prisons when calculations pointed out that it would be cheaper to provide those same services in-house, according to the report.
  • Indiana employed performance-driven budgeting practices measuring the results achieved for every tax dollar spent, the report said. That data helped Indiana make cuts to ineffective programs as well as areas that just needed more funding in order to be successful, according to the report.
  • Maryland uses StateStat, a data management system that monitors 10 major departments, identifying where to trim to save money and achieve better results, according to the report. Because of StateStat, Maryland closed an under-capacity juvenile justice detention facility, saving $1.5 million. The state then used $600,000 of that money for less expensive community-based youth initiatives, which turned out to be more effective than incarceration, the Pew report said.



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