A Cold Florida

The Gov's "Drive to Excellence": A push to privatize/outsource state services?

On April 4, Gov. Tim Pawlenty announced the first component of a major structural reorganization of the state government--the creation of a cabinet-level agency called the Office of Enterprise Technology. The agency, Pawlenty promised, would help make government faster and more efficient. At face value, there seemed little to be skeptical about. After all, just about everyone agrees that a smarter use of technology can improve government services. What better way to accomplish that than by a technology czar?

But after reviewing the proposed legislation that accompanied the announcement, Jim Monroe, the executive director of the Minnesota Association of Professional Employees, started to have some doubts. Among other things, Monroe noticed language embedded in the bill stipulating that new hires at the Office of Enterprise Technology would be "non-classified" and therefore serve "at the pleasure" of the agency chief. Translation: The new agency's employees would not be afforded the usual civil service protections enjoyed by their union fellows.

Immediately, Monroe--along with his counterparts at the other big state workers' union, AFSCME Council 5--demanded that the anti-union language be removed from the bill. Facing the prospect of an ugly fight that could derail the legislation, sponsors removed the provision. According to Dana Badgerow, the commissioner of the Department of Administration, the anti-union language was "a mistake" which was inserted by a staffer unfamiliar with labor relations. Monroe says the episode left him increasingly concerned about the motivations behind the creation of the new agency, along with the rest of Pawlenty's ambitious "Drive to Excellence" government reform effort.

Jane Sherman

"We're going to be watching this very closely to see if this is going to be used as an excuse to outsource, because it appears that this is a precursor to some rather substantial layoffs," Monroe says. "There's clearly an agenda here. They do not hide the fact that they think there are services that they think they can subcontract out." Jo Pels, the state field director for AFSCME Council 5, agrees: "The bottom line is that we're going to lose state jobs and that's going to hurt customer service. As far as I can see, the Drive to Excellence is really a drive to exterminate state employees."

After hearing an official presentation on the Drive to Excellence, one private consultant who works on technology security for the state says he and his fellow vendors quickly came up with a different name for the project: the Drive to Outsourcing.

For her part, Commissioner Badgerow flatly dismisses such characterizations of the initiative. "This entire discussion has to do with reorganizing within state governments, not seeking third parties to do the work," she says. "I defy anyone to find anything [in the Drive to Excellence report] that is directly or even indirectly related to outsourcing."

Still, when Pawlenty announced the details of the plan two months ago, he allowed that it would call for the elimination of 1,285 state jobs over the next seven years. That, he explained, would occur not through layoffs, but through natural attrition as a growing cohort of state employees becomes eligible for retirement. The payoff, according to Pawlenty, could be substantial: By eliminating those jobs and by centralizing "back office" functions at various state agencies, the governor promised he could save the state more than half a billion dollars over the next seven years.

As evidence, the administration has cited savings achieved in other states that have experimented with similar "transformations" of state government. According to the Drive to Excellence FAQ, for instance, the state of Kentucky expects to realize some $700 million in savings over eight years as a result of such initiatives.

If Kentucky is the template, Pawlenty may wish to reconsider his plans, says Charles Wells, the director of the Kentucky Association of State Employees. Wells notes that Ernie Fletcher, the state's first-term Republican governor, is now enmeshed in a messy patronage scandal and his push to privatize state services--including prisons--has been met with fierce resistance.

"He says, 'I want to run Kentucky like Jeb Bush has run Florida.' Well, Florida is the shining example of the problems with privatization," Wells observes. "Yet we are hearing that this administration would like to sell off as many state agencies as possible." One recent example: Last month, the cash-strapped Kentucky Department of Environmental Protection announced that it had hired two private companies to process air pollution permits.

Without question, there is a certain irony in the Pawlenty administration's vehement denial that the endgame in the Drive to Excellence is the outsourcing of state jobs. After all, notes AFSCME field director Jo Pels, the core document behind the Drive to Excellence scheme--a 257-page report called the Transformation Roadmap--was generated through a $2.5 million contract with a private firm, Deloitte Consulting. "We could have given him a lot of that information for free," says Pels. "It certainly wouldn't have cost $2.5 million." (For her part, Badgerow acknowledges that AFSCME employees were left out of the Drive to Excellence planning process, but notes that MAPE members were included and that much of the report was generated by state employees with Deloitte acting as a "facilitator.")

Meanwhile, other critics of the Drive to Excellence question whether its extravagant promises of both big savings and improvements in government service are actually possible. According to the administration, the state will need to make $216 million in up-front investments to realize the net savings of $570 million. There are few signs that that process has begun, says State Sen. Jane Ranum (DFL-Minneapolis): "They were citing all these states that had done similar things and touting all these savings, yet this governor did not book one dollar of savings for this biennium. That tells you a lot. There's a disconnect between what he's doing and what he says he's going to accomplish."

That sentiment was, curiously enough, echoed by Commissioner Badgerow in her testimony before the legislature on May 17. "The savings from the Drive to Excellence are contingent on investments," Badgerow told lawmakers. "There are no investments in this bill. Without the investments there will be no savings."

 
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