A state-commissioned efficiency study and Governor Sam Brownback’s FY 2017 Budget Report shared an encouraging common theme last week: Kansas can balance its budget by providing the same or better quality public services at better prices across the state—all without tax increases on hard-working Kansans.
The Alvarez & Marsal (A&M) consulting firm’s efficiency study—released in preliminary form to state lawmakers on Tuesday, January 12th—found 105 areas where Kansas state government operates inefficiently and could save itself a total of $2 billion over five years. These savings more than make up for projected budget shortfalls in FY16 and FY17. What’s more, A&M noted that its report was not exhaustive, as the firm could have found more opportunities for additional savings if given more time.
Achieving $2 billion in savings may seem like a large hurdle for our state to clear. Yet, it really amounts to state government operating no more than 7% more efficiently in each of the next 5 years. In a December 2015 poll conducted by Survey USA, the vast majority of Kansans felt that the state could be a better steward of taxpayer money by spending it more effectively and efficiently. This sentiment crossed ideological and political party lines and has remained consistent across similar polls conducted over time.
Many A&M study recommendations showed similarities to ideas KPI has offered for years in hopes of helping state and local governments make the best possible use of taxpayer dollars to provide high-quality, outcomes-driven public services (i.e. education, infrastructure, etc.).
Specifically, the study agreed that Kansas school districts could spend down $193 million of their excess unencumbered cash reserves, which totaled more than $856 million statewide at the end of the 2014-2015 school year.
The study also discussed opportunities for community colleges in close proximity to team up to purchase office supplies and other equipment at bulk discount prices, leaving more money to spend on directly educating students. KPI has noted that this concept could work in K-12 education as well via regional service centers and/or collaborative purchasing agreements between neighboring districts.
There are similar bulk-pricing savings to be had in the study’s suggestion of a statewide health insurance pool that would include state employees as well as employees of the state’s 286 local school districts. Likewise, the cost and efficiency benefits of this concept could be extended to school districts’ accounting and payroll systems. Buying into a universal, statewide system would cost districts less than financing, maintaining, and staffing their own systems.
Alvarez and Marsal also recommended outsourcing workers’ compensation claims processing to a private sector firm at lower costs and higher accuracy rates. Opportunities like this exist at all levels of government and in schools, where certain administrative and maintenance tasks could be contracted out to save on not only baseline costs but also on longer-term pension costs to taxpayers that come from state entities maintaining an in-house workforce.
Apart from the A&M study, Governor Brownback’s Budget Report included other proposals to reduce costs. Taken collectively, Kansas legislators have a long menu of options from which to balance the budget without service cuts or tax increases.
Everyone says they support government efficiency as a concept, but it will be interesting to see how many legislators throw their support behind these good ideas.
