Government leaders on a suicide mission using archaic budget models
Continued bumps in the state unemployment rate are leaving the public sector with tattered budgets even as the new fiscal year begins this week. The Michigan treasurer and fiscal agencies have lowered revenue projections for the remainder of 2009 and for fiscal year 2010. Additional cuts in state revenue “sharing” have slammed cities and counties equally.
Though it may sound cavalier, the implosion is what government deserves, and certainly what government leaders blindly pursued despite the wealth of information that warned of imminent danger even before the financial crisis that exacerbated this recession. It was predicted and pronounced in 1997, long before General Motors was called onto the Oval Office carpet.
From the crisis created by former and current state legislators we may hope comes real reform — reform that has for more than 10 years been given study and resulted in the blockbuster 2004 book “The Price of Government: Getting the Results We Need in an Age of Permanent Fiscal Crisis.”
Note the word “permanent” in the book title.
Co-author David Osborne also wrote the 1992 New York Times bestseller “Reinventing Government” and has described — in detailed case studies — how public sectors in cities, counties, states, federal agencies and foreign countries changed the old model of budgeting and services to outcomes-based budgeting. The National League of Cities held an entire conference on the book and models in 2004; Grand Rapids Business Journal hosted a free Strategic Issues Seminar with the authors in 2005 to an overflow audience of business and government leaders. Former Grand Rapids City Manager Kurt Kimball was proactive with staff in initiating some of the lessons imparted from public sector successes.
The National League of Cities implored members to learn a new millennium model writing, “When faced with budget gaps, the most common solution is to focus on how to cut 10 or 15 percent from an already ‘tight’ budget. Across-the-board cuts are a too-frequent occurrence that doesn’t distinguish what is working from what is not.”
Osborne contrasts that now archaic method with new models: a bureaucratic tradition to focus on stature and rule-directed services rather than mission directed; hierarchical bureaucratic tradition versus team/network-oriented structure (which is certainly the model now used by the private sector); the traditional centralization of control rather than decentralization/empowerment; traditional quality defined by conformance to rules instead of quality defined as meeting or exceeding customer expectations; — and the big one: bureaucratic accountability for conformance to rules instead of the Learning Organization transformation to accountability for outcomes.
State legislators, awaiting more federal bailout money, postpone the critical need to reinvent — leaderless in a new economy and completely unaware and unprepared in regard to its impact. (Last week the U.S. Commerce Department Economic Development Administration provided a $75,000 grant to the Southeast Michigan Council of Governments in Detroit “to develop a comprehensive economic development strategy that will help this region respond to auto plant closures.” Yet if this group were able to accomplish such a long overdue task, the “grant” would not be needed.)
Local governments must take off the blinders and defer expectations. Regional governmental leaders must recognize the state’s pursuit of calamity, and the necessity of their own ability to partner, consolidate and reconstruct.