Four governors discuss spending cuts

October 13, 2010

As we all know, state governments have found themselves in massive budget messes in recent years. Today, four governors discuss what they’re doing to cut spending. Here are two notable excerpts:

Governor Rendell of Pennsylvania:

Pennsylvania had more than 2,000 contracts for buying office supplies when I took office in January 2003. Some agencies paid full retail price. We immediately began applying good business practices to every aspect of state purchasing. We saved $14 million a year by putting office supplies out to bid and selecting the lowest-priced single supplier. Applying that same model to computer purchases saved taxpayers another $19 million a year. We allow local governments and school districts to piggyback on these contracts. These are just two examples of the procurement redesign that is saving taxpayers nearly $30 million a year.

Governor McDonnell of Virginia:

Virginia’s state budget grew by 73.4% from 2000 to 2009, much faster than the rate of growth in population plus inflation. This is unsustainable and unacceptable, and the budget cannot be seriously restrained without addressing its two primary drivers: personnel and programs.

[W]e supported a significant overhaul of Virginia’s pension system. All state employees hired after July 1 of this year will now, for the first time in a generation, contribute to their own pensions. With pension-system reform, we will save an estimated $3 billion over the next 10 years. Actuaries estimate that in the long run, our reforms will reduce the total cost of Virginia’s pension system by 10%.

Our second major reform was an immediate, statewide hiring freeze. We obtained enhanced authority from the legislature for the governor to order a freeze that covers all noncritical areas of state government, not just a select few agencies. This strict freeze, together with reductions in full-time positions, will save over $20 million a year.

Looking forward, we’ve also created a commission on government reform that is evaluating over a thousand ideas to save tax dollars, by doing everything from cutting and consolidating boards and agencies to creating a one-stop shop where businesses can access every license, permit and registration they need to operate. For too long, state governments have operated on the assumption that ever-higher budgets are the norm. We intend to redo the way government operates.

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