July 95

Indianapolis Mayor Stephen Goldsmith is probably best known for reengineering the city's delivery or services to the public. A major success has been the privatization of many of Indianapolis' services. Goldsmith has also worked to strengthen the role of neighborhoods in determining priorities and problem solving.

A Republican elected in 1991, Goldsmith has direct e-mail connections with many city employees. This has increased the velocity of information, made the mayor more accessible, and helped flatten the city management hierarchy.

Following is an interview conducted by GT Features Editor Brian Miller.

GT: When you came into office in 1992, what was your overall vision or plan for the city?

Goldsmith: I wanted improve opportunity for all of our citizens by restoring neighborhoods and making our city competitive and safe. Essentially, the goal was to create economic opportunities for everyone, including those who are poor, and to dramatically restore our older neighborhoods while also making government smaller and more efficient.

GT: When you assumed office, were you thinking along the lines of privatization and reducing direct service delivery by the city government?

Goldsmith: I teach a little bit of public management and had been reading about those issues for some time. I was committed to essentially reducing the role of the public sector and enhancing the participation of the private sector.

So much of our rhetoric revolved around value added terms. So when we spend a tax dollar, how are we sure that we are getting a dollar in value on that purchase? I ran on that platform.

Essentially we did that through privatization, although we now call it competition because we are allowing our employees to compete. We have driven down the operating cost of government by about $125 million, reduced the non-public safety public employee force by 30 percent and transferred the savings into infrastructure. We're doing a $500 million building better neighborhoods program with no new property taxes from the savings produced through competition.

GT: What initiatives are you most proud of? What do you think is the most significant accomplishment thus far?

Goldsmith: I think you need to look at results, and in the time we've been doing this, public employment has been reduced. Infrastructure investment has risen about 400 percent to over $500 million. The city's unemployment rate has dropped from 5.9 percent to 3.8 percent, which is about the lowest in the top 30 cities in the country.

The older urban neighborhoods have begun to be restored for the first time since World War II. So essentially the results, in terms of employment, housing - the way one might measure the quality of life - are all much better.

It's not really a measure of value to say we put 100 more police officers on the street - which we have - or talk about the number of houses or parks. What we need to do is talk about how neighborhoods in general have been revitalized and how people have access to wealth, meaning access to jobs as a measure of value.

GT: Can you explain your thoughts on what functions need to be done by government and should not be privatized. And second, what items should be privatized?

Goldsmith: Actually, those are very separate questions. The first question is what businesses should the government be in at all, what services should the government provide. In other words, what are public goods? And the second question is even if these do need to be provided, do they need to be produced by government or produced by

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