There’s
no way the state of Virginia could pay Philip Shucet
enough to reward him for what he accomplished as
commissioner of the Virginia Department of
Transportation. In three-and-a-half years there,
he reduced VDOT staff by more than 1,100 positions and
payroll by more than $67.5 million. And he did so
without the slashing and burning so often associated
with cost cutters.
By
installing modern management systems, Shucet engineered
dramatic improvement in the on-time and on-budget
metrics of VDOT’s construction projects. As a parting
contribution before he resigned in July, he put into
place elements of an asset-management system for conducting VDOT’s
road maintenance operations more efficiently – a
change that could save millions of dollars more in the
years ahead.
Today,
the long-maligned VDOT is the superstar of Virginia's
bureaucracy.
Although state government did undergo belt tightening
during the budget-crisis days of the early Warner
administration, head counts and costs have crept back up. Any
department head can freeze hiring during a budget
crunch, but most find themselves filling vacant positions when the purse strings
loosen up. Very few can do what Shucet did -- boost productivity and
eliminate the need for many of the old positions.
A
glance at the numbers show that VDOT accounts for most
of state government's reduction in head count during the
Warner administration. There may have been other pockets
of productivity, but take VDOT out of the equation and
the performance is lame.
Drawing
upon Virginia’s Electronic Labor Market Access
database, I calculated the
six-month average for state government employment
(excluding universities and hospitals) during Gov.
Warner's first half year in office.
Average
State Employment |
(excluding
universities and hospitals) |
2002 |
145,967 |
2003 |
142,617 |
2004 |
144,683 |
2005
|
144,917
|
(Note:
Because 2005 figures are reported only through
June, I compared January-June of this year with
the same period in previous years to avoid the
impact of seasonal variations in employment.)
Source:
Virginia Employment Commission, Virginia's
Electronic Labor Market Access database
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After a period of belt-tightening,
state government shifted back into hiring mode. Total
state employment is still 1,050 positions lower than
three years ago, but VDOT employment accounts for 1,100
job reductions, meaning that non-VDOT state government
has emerged from the budget crisis with no net job cuts
at all.
My
aim here is not to belittle the accomplishments of the
Warner administration, which did, after all, steer the
state through a very difficult financial storm. Rather,
my purpose is to refute those who still persist in
asserting that state government has been "cut to
the bone," that there are no efficiencies yet to be
achieved, and that the only way to meet the endless list
of "unmet needs" is to raise taxes.
To
those who would Tax First and Ask Questions Later, I put
this question: If Philip Shucet could wring such
productivity gains out of VDOT, once regarded as the
most intractable bureaucracy in state government, why
can't other department heads achieve comparable
productivity gains? Why don't Gov. Warner and our
lawmakers set higher performance standards, and why
don't we as citizens and taxpayers insist that they do?
Think
of it this way: In 2002 VDOT accounted for about one
state employee in 14. If non-VDOT agencies had achieved
comparable productivity gains, the state would have shed
14,700 additional jobs and would have cut payroll
expenses by an additional $878 million!
Don't
tell me there's no waste left in state government!
There's only a failure of will to root it out -- or,
perhaps, an inability to understand how such savings
might even be possible.
The
political process, alas, is dominated by lawyers in the
legislature and watched over by the journalists and pundits of the
Fourth Estate. Neither profession has much experience
managing departmental budgets, much less leading change
in large organizations. Lawyers look at the state budget
organized by departments and programs and conclude that
there's nothing to cut -- every program serves
legitimate needs. Likewise, journalists focus on what
they can understand. Their idea of digging into state
spending is to flay local government officials for
tipping cocktail waitresses while attending conferences in Hawaii. With their eyes fixed on
the wasted pennies,
journalists are oblivious to the larger scandal that
squanders pounds: The
failure to change the way government does business.
The
big savings in state government need not come from
cutting state programs, and they certainly won't come
from scrutinizing politicians' travel expenses. The
savings will come from implementing modern management
systems. Philip Shucet didn't reduce head count at VDOT
by cutting spending on roads or nit-picking expense
accounts. He did it by changing the way things have
always been done.
As
many politicians, pundits and special interests continue
to lobby for tax increases, citizens
face two challenges. The first is
convincing shifting the terms of debate from raising
taxes to saving hundreds of millions of dollars through
re-engineering state government. The second is to find more people like
Shucet who know how to re-engineer state
government.
And that may require rethinking the state's antiquated
personnel policies.
Shucet
was a rarity. In the prime of his career, he took a pay
cut to work for the state because he was motivated by a
sense of public service. Sadly, few executives of his
caliber are as selfless.
Here's
the fact that no one is talking about: The
Commonwealth's personnel policies are hopelessly out of
sync with 21st century human resource practices.
Designed a century ago to combat the corruption and
nepotism so widespread in 19th-century government, the
civil service makes it exceedingly difficult to reward
competence, punish slackers and recruit star performers.
To lure top-flight executives capable of transforming
large organizations -- executives who will repay their
salaries and perks many times over -- Virginia's
governors must be allowed to offer richer compensation
packages.
With
a gubernatorial race underway, there's no time like now
to start talking about fundamental reform of state
government. Civil service reform isn't on the radar
screen of candidates or pundits. It's up to the citizens
and taxpayers, it appears, to force the issue.
--
August 8, 2005
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