money tree

The last few years have been brutal for state and local governments given the budget cuts, furloughs and layoffs. And as the feds begin instituting deficit-reduction plans and offering fewer grants, the next few years won’t be any better.

So what can be done? As Chicago Mayor Rahm Emanuel said, “You don’t ever want a crisis to go to waste; it’s an opportunity to do important things that you would otherwise avoid.”

The budget crisis does force governments to change and make tough decisions they may typically avoid. Instead of business as usual, governments must scrutinize what programs and staffing resources are essential, and find new ways to maximize resources.

But what does that mean in practice? Here are five questions to get you going:

1. What are your core programs? Over time, agencies continually add new programs but rarely cancel old or unnecessary ones. Do a clear review — if you had to keep only 50 percent of your programs tomorrow, what would they be? The Partnership for Public Service report, Making Smart Cuts, recommends that agencies don’t make unilateral, across-the-board percentage cuts. Instead, they should make deep, strong cuts in underperforming or nonessential areas while investing in key areas. Instead of spreading themselves thin, they should focus on doing a few things really well.

2. What programs must be government run? As you examine programs, a key question should be: Is this government’s role? For example, do you need to create that new city transportation app? Cities like New York have shown that if you release the data, many transportation developers can create and maintain innovative apps to solve the problem. There, government solves numerous problems with programs that could be handled by a private-sector business model or a nonprofit.

3. How can I increase revenue? In the ’80s, people would have been shocked to hear that stadiums are now named after companies. In austere times, government must look at its resources and areas to hike revenue, such as by adding advertising in property tax statements or websites, pursuing unpaid parking tickets to increase collections, or raising fees. Items that previously seemed sacrosanct to change should now be open for consideration.

4. What staff are critical? As a government leader, power is often measured by the number of staff members reporting to you. Further, you often have limited ability to recruit or dismiss staff and make other personnel decisions. A great time to assess your staff, recruit excellence and remove underperforming employees is during layoffs and buy-outs.

5. How can I change the way I do business? BlackBerry became prevalent in Washington, D.C., after 9/11, as perceived worries about computer security were mitigated by mobile e-mail connections. In tough times, it makes even more sense to shift from your own data centers to cloud infrastructure or buy software as a service versus expensive installations. All ideas are on the table: Instead of giving employees desktops and mobile devices, consider offering a stipends for their purchase or reimbursement of personal device use.

Change is the only constant, and there’s more of it than ever right now. Even the U.S. Postal Service is using its budget crisis to rethink how it operates, from revising delivery schedules and closing buildings to exploring new revenue-generation services (secure e-mail, data collection).

So why not do the same, and make important changes in how your agency does business?

Steve Ressler  |  Contributing Writer