More Opportunities Created By The Budget Shortfall

Last week I wrote about how the projected government shortfall is an opportunity to reduce the size of government and to apply technological advances to state government. This action will have the effect of providing improved customer service. A budget shortfall will force legislative leaders and agency officials to do what they would have not taken the time to do when state government largess was increasing. It is actually in a downturn when money is less plentiful that taxpayer accountability and customer service may improve.

I consider it the primary responsibilities of the government modernization effort not only to introduce ideas for reform, but also to clear away the statutory roadblocks that prevent the application of money saving processes.

But there are other vital roles for the modernization effort.

It is very important for those who are committed to the modernization of state government to undertake the effort of documenting savings enabled by technological upgrades. Over the years, state agencies have realized a considerable savings because of these upgrades. There have been millions of dollars worth of savings realized by government agencies such as streamlined procurement process savings and lower technology costs such as falling telecom rates.

One of the items I found interesting when I was new to the appropriations process was the fact that agencies hardly ever came before the Legislature to notify us of the savings and to ask that it be returned to the taxpayers. Instead, agencies mostly focused on explaining the need for, and the fantastic benefits that would result from new programs if only the Legislature would expand their budgets.

By documenting the millions of dollars saved in the past few years through the application of new technological processes, the government modernization effort can assist with fair and strategically targeted agency spending reductions that target and eliminate wasteful spending habits.

This documentation process is not an easy task. In fact, as you might imagine, agency officials may be reluctant to divulge the savings and are more than happy to make legislators earn their pay by figuring out where your tax dollars are being spent.

Another great opportunity afforded by the government modernization effort is that of transparency. One big challenge is to ensure that state government purchasing officials are able to review and analyze all government spending and then use that data to allow state purchasing officers to leverage better contracts.

Having this data accessible will not only save money, but it may very well become possible to allow the people to review this data online. Hopefully this tool will allow the review of each and every purchase made, the date and time of the purchase (so you can see which agencies are desperate to use up their budget at the end of the fiscal year in an effort to justify their funding), and the reason for purchase.

These are a few of the projects that I am looking forward to being an advocate for during the upcoming legislative session.

Changing the Way Government does Business

If you listen to or read the various news stories regarding Oklahoma's budget situation, you might have received the false impression that a budget shortfall is a negative circumstance poised to cause all sorts of harm and confusion.

By some estimates, state government spending will be $300 to $500 million less this year than last year. Those who have an appreciation for big government see this as a very unfortunate event because they know that government will most likely be required to shrink in size this year.

I believe the shortfall presents the Legislature with a most exciting opportunity not only to cut through bureaucratic waste and make government more cost effective, but also to streamline and modernize government services so as to provide much improved customer service to the people.

For me, the past few weeks have been some of the busiest since I have been in the Legislature. Since receiving the appointment to head the House Standing Committee on Modernization, I have enjoyed the opportunity to encourage the progress of the House Modernization agenda. Last week, the House held an interim study which demonstrated the many opportunities to save taxpayers dollars and provide better service to the people of Oklahoma through better practices and the implementation of new technologies. At the same time, House Republicans have announced that government modernization will be a part of the 2009 House Republican agenda.

Based on the state's revenue shortfall, there is an obvious opportunity for spending reductions. This provides the occasion to modernize government. Those who have argued for less government spending in the years ofsurpluses have usually been swimming upstream. However this year, most will agree that it is absolutely necessary for the state to use technology to reduce the workload and free up state government positions.

One important opportunity that must be taken advantage of is the combination of all of the state's licensing and permitting entities into a user friendly, web based portal. Currently, very few of the state agencies provide this option. However, during the recently concluded study, we heard testimony regarding the success of one agency who has implemented this reform.

The State Board of Medical Licensure is saving $20,964 per year because of an online professional license renewal system. Due to the implementation of the online system, this common sense reform freed up about two full time employees because staff time was cut by fifty percent. It also appears that 99% of the license renewals now occur online.

Can you imagine how the improvement in customer service in this system can be implemented with all of the other licensing systems to form one easily accessed entity? How about the millions of dollars of savings that will be realized if this was accompanied with the reform of centralizing the licensing system into one location, instead of having it spread across a large number of state agencies?

The shortfall is not a bad thing. Rather, it can be a great opportunity and challenge that should motive state government to do what should have been done many years ago. State government should be using technology to provide a more friendly service at a reduced cost to taxpayers. As Chairman of the House Modernization Committee, I am very much looking forward to meeting this challenge.

Rep. Murphey Presents Modernization Study

OKLAHOMA CITY (Jan. 13, 2009) – Several states have seen significant
savings after either privatizing their procurement and technology
services or dramatically restructuring them for better efficiency,
members of a joint House and Senate budget committee were told by
experts today.

"I am encouraged by the information presented today," said House
Speaker Chris Benge, R-Tulsa. "We have a real opportunity to seek
tremendous savings for the state of Oklahoma."

The meeting was part of study requested by State Representative Jason
Murphey who is seeking to modernize state government, including
upgrades and streamlining in technology and improvements to the
state's procurement process.

"There are several reasons to streamline government, including
improved services and cost-savings," said Rep. Jason Murphey,
R-Guthrie and chairman of the House Government Modernization
Committee. "It is our duty as lawmakers to make sure our tax dollars
are spent efficiently, and we will continue to push for savings to
indefinitely ensure Oklahoma taxpayers are protected from frivolous
spending of their hard-earned dollars."

"Technology is producing a quickly changing world with great
opportunities for increased effectiveness," said House Appropriations
Chairman Ken Miller, R-Edmond. "We have made some progress in the last
several years toward modernizing our government, but there is much
more to be done. We have to fight the status quo, especially given the
current revenue outlook. We can always do better for the people of
Oklahoma."

Making the state's purchasing practices more efficient will continue
to be a priority this year. Last year, Murphey's legislation (HB 3325)
that enabled e-procurement and allowed vendors to be paid
electronically was signed into law, but bureaucratic paperwork
continues to delay the process.

Reforms proposed in legislation last year were formulated in a 2007
interim study, which analyzed a 2005-2006 report from IBM that
identified at least $70 million in possible savings if the state put
in place industry best practices when it comes to purchasing.

"We have a chance to save millions of dollars, increase efficiencies
and improve services, all without a cost to the state at all," said
Tim Clem, senior managing consultant for IBM Global Services.

Today, a second study was presented by Treya Partners, who was
contracted by the Department of Central Services to identify areas of
savings and efficiency within the agency.

The Treya study verified that the savings potential ranges from $24
million to $71 million and could be realized within 12-18 months time.
The study showed that due to lack of spend visibility and leverage and
limited utilization of best practice procurement techniques, Oklahoma
could be paying as much as 14 percent more than they should for goods
and services, said Rahul Ahuja, the Treya Partners DCS project
manager.

The Treya study, like the IBM study, suggests that DCS officials
leverage the agency's purchasing power, develop a greater
understanding of supplier markets and economics, increase supplier
competition and unbundle pricing for greater transparency, which will
move the focus from the individual purchase price of a specific good
instead to the total cost of the entire purchase.

Savings will continue to be sought based on these studies throughout
this session and in future years.

Leonard Gilroy, director of government reform at the Reason
Foundation, said Florida's e-procurement system has led to an improved
understanding of purchasing patterns, less paperwork and faster
transactions with vendors.

Since moving its purchasing online, Florida has seen at least $71
million in savings, with 91 percent satisfaction from users of the
system.

Experts testified today that IT is well suited for privatization
because government is not flexible or fast and able to adapt to new
advances in technology.

"Today was a good first step toward bringing Oklahoma State Government
into the 21st Century," said Sen. David Myers, R- Ponca City,
vice-chairman of the Senate Appropriations committee. "I'm optimistic
that the cooperation of Senate and House members -- Republican and
Democrat alike – working together with state agencies to develop
solutions, will allow us to move forward in bringing cost savings and
new efficiencies on behalf of Oklahoma's taxpayers."

Members also learned that there are plenty of private companies ready
and willing to help state government achieve efficiencies and costs
savings in both procurement practices and management of information
technology, often without any up-front cost.

This year, House and Senate Republicans will also continue to push to
centralize the state's information systems and information technology,
and centralize all the financial and management information services
for the state. Currently, Oklahoma's state agencies have many separate
strategies for managing technology and equipment, some more or less
effective than others.

A coordinated approach to information technology will help achieve
technological compatibility among state agencies, ensure that all
state agencies are using information technology to its best advantage,
and better utilize the state's purchasing power.

Jerry Simonoff, director of IT Investment & Enterprise Solutions for
Virginia's Information Technologies Agency, told committee members
that the states' savings have been significant by centralizing the
state's IT services.

Had Virginia's IT services not been centralized, Simonoff said the
state would have spent more than $120 million on failed major IT
projects; $200 million more over the next decade supporting an aging
IT infrastructure; an additional $120 million on energy consumption
over the next decade; and paid $45 million more for IT products and
services without central IT procurement management.

Government modernization will be a priority this session for both
House and Senate Republicans.

A Billion Dollars of Unnoticed Taxation

Over the past two years, I have been taking note of the state government's hidden spending.

Each year, the state government appropriates about 7 billion of your taxpayer dollars. The agencies that depend on this funding are more subject to legislative oversight because they know their appropriations must be approved on an ongoing basis. In theory, these agencies should be on their best behavior because they are supposed to be held accountable by the people's Representatives.

However, the majority of Oklahoma's agencies, boards and commissions (more than 500 in total, which appears to be more than double the size of comparable states) are not required to come before the Oklahoma Legislature each year for appropriations. These are the hidden government entities that thrive off fee-generated revenues or other ongoing funding sources that are not subject to the appropriations process.

As a result, they are operating with little legislative oversight while taking close to a billion dollars from the private sector each year.

What do you think the economic impact of 1 billion dollars would be on the state's economy if it was kept in the hands of the people instead of being gulped up by state government?

The fact that these boards can exist without public scrutiny while guaranteed a revenue stream largely unaffected by legislation makes the organizations an easy target for political patronage jobs, and the opportunity for the boards to be co-opted by the groups they are supposed to regulate is also highly prevalent.

The term "Rogue Agency" is used to describe an agency that has a board that has been co-opted in this manner. By raising fees and paperwork requirements, a rogue agency can be a tool to keep any new competition away from the industry members who have taken over the board. This potential monopoly on the market and lack of free market competition could have the effect of driving up the prices for consumers, to say nothing of the nearly billion dollars of fees that are passed on.

The board members on the rogue agency board can also exert tremendous influence on the agency's executive director to overlook or go light on the transgressions of their own business interests and that of their favored associates.

If you would like to see the monstrosity that you are paying for with your tax dollars, visit the Oklahoma Department of Libraries web site (http://www.odl.state.ok.us/) and download the list of agencies, boards and commissions. You will find it an enlightening experience.

Can you imagine the impact on our economy if, instead of taking a billion dollars from its citizens, the government simply let you keep your own money?

The Legislative Process

The final deadline for legislators to file their bills is almost here. This will represent the culmination of a year-long process as a list of possible legislation is refined down to the eight bills that each Representative is allowed to file.

I have found that it is probably wise to introduce a balanced portfolio of legislation that advances the effort to institute sweeping reforms and also legislation that has an increased chance of passage.

Passing a piece of legislation is a challenging process that is long and complex. Only a small percentage of introduced bills (with the exception of appropriations bills) is successfully signed into law.

Last year in the House, this is the course a bill had to take in order to be signed into law:

* The House author must have successfully convinced a Senator to sponsor his bill in the Senate. It is important to choose a Senator based on his/her abilities and commitment to the principle of the bill.

* The bill then would have likely been assigned to a House subcommittee where the Chairman of the subcommittee agreed to give the bill a hearing. The full subcommittee voted on the idea.

* If the bill was approved in subcommittee, it was assigned to a full committee where once again the Chairman had to give the bill a hearing and the full committee was required to vote on passage.

* A bill passed by a committee must have received permission from the majority floor leader in order to be considered by the full House. If he/she consented to a hearing on the floor of the House, the full House had to vote on passage.

* Once the bill was approved by the House, it was sent to the Senate where the process was repeated, including a committee hearing (unless either of the Senate Committee Co-Chairs disagreed), a vote in committee and a vote on the floor of the Senate.

* Most likely the bill was then assigned to a conference committee. If either the Senate or the House failed to assign conference committee members to the bill prior to the deadline for assignments, the bill died. If those individuals were assigned, then the bill had to receive the support of a majority.

* If the conference committee approved the bill, it needed approval once again from the House and Senate. If the bill was not scheduled by the deadline in either House, it did not pass. If both Houses (House of Representatives and Senate) approved the bill, it was sent to the governor for approval. If the governor vetoed the bill, it had to go back to the House and the Senate for a possible override vote. In order to override the governor's veto, at least two thirds of both House and Senate must vote for the override. In the past 15 years, only one bill has become law despite a veto.

This is the task that faced by Representatives in the upcoming months as they advocate for their legislation.

In the past I have enjoyed the opportunity to seek passage for a number of pieces of legislation that have been suggested by House District 31 constituents, and look forward to doing it again this year.