Early state government reorganization savings estimates come in low

DES MOINES – Proposed government reorganization and efficiency measures under study by lawmakers are expected to cut state costs by nearly $20 million next fiscal year and $57.3 million the following year, according to a fiscal analysis issued Tuesday.

The overall savings included in draft legislation being considered by legislative committees would grow to $28.9 million next fiscal year and $66.7 million in fiscal 2012 when proposed revenue increases are included.

Senate Majority Leader Mike Gronstal, D-Council Bluffs, noted the figures reflected a draft fiscal impact and did not include other major pieces that approach $150 million that are part of the overall downsizing and efficiency process.

“We're just getting started on this process,” said Gronstal, who noted Gov. Chet Culver already implemented an executive order seeking up to $88 million in savings and lawmakers are fashioning a state employee early-retirement package expected to save nearly $60 million.

“We're still working on those pieces,” said Rep. Mary Mascher, D-Iowa City, who is leading work on the reorganization bill in the House. “When you combine everything, I think it will be much greater than that. But, obviously, right now these are the numbers in the current bill as is.”

According to a fiscal impact statement prepared by the nonpartisan Legislative Services Agency, proposed changes included in Senate Study Bill 3030 could save state government more than $77 million over the next two fiscal years and nearly $56.5 million for local governments and other funds.

The proposed legislation also could generate more than $19 million in new revenue by lowering the threshold from $10,000 to $1,500 for gambling winners to undergo checks for money owed the state, more aggressive auditing of tax fillings and increases via the juvenile detention fund.

Senate GOP Leader Paul McKinley of Chariton expressed some initial pessimism that the overall savings would live up to the projections of at least $250 million in state government savings, saying meaningful reforms often are costly to implement and time consuming to execute.

“We've seen promises made under the guise that this will save this much money or it's an investment that will pay this kind of dividend, and it's always painted in the most rosy, optimistic scenario, and rarely have I seen those work out,” he said. “We have to go over this in fine detail to see if it passes the smell test, quite frankly.”

A major piece of the proposed savings would come through an incremental increase in the span of control within state government that would increase the current ratio of 14 employees for each supervisor to a 20-to-one ratio by fiscal 2017.

According to the LSA analysis, a gradual increase in the span of control would reduce full-time supervisory positions by 728 in fiscal 2012 and 306 in the remaining five years. The result would be a net state general fund savings of $31.7 million and $39.1 million for non-general fund sources over a six-year period beginning in fiscal 2012.

Another provision that would allow state agencies and local governmental entities to notify by the public of open meetings, elections, hearings and other actions via electronic means, such as Internet Web sites, rather than legal publications in newspapers carried a projected savings of $6.57 million over the next two years for local entities.

The Iowa League of Cities projected statewide yearly savings of $2.97 million and the Iowa State Association of Counties estimated total savings of $3.6 million for Iowa's 99 counties. The Iowa Newspaper Association opposes the change and critics note that many Iowans still are not equipped with computers to access electronic notices.

A proposal to merge government information technology services would require an initial investment of $7.9 million next fiscal year and result in savings of $5 million the following year.

Other projected savings could be achieved by closing the Luster Heights minimum-security facility near West Union for a yearly benefit of $2.36 million and closing the mental health institute at Mount Pleasant to save $1.3 million annually.

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