Weekly Wrap: Recession Forcing Government Overhaul

By: - August 7, 2009 12:00 am

General Motors emerged from bankruptcy a leaner company, with fewer car brands and employees. Oregon Gov. Ted Kulongoski (D) says state governments should copy GM’s reorganization model by coming out of the recession with a smaller number of services. In other words, what’s good for GM is good for state governments.

“GM is going to have to live without Pontiac – even though there are probably millions of loyal Pontiac owners,” Kulongoski said recently. “Well, every state agency, board and commission has its loyal supporters, too. I get that. But the money simply isn’t there anymore. Some government functions have to go – at least for the foreseeable future. Oregon state government can no longer be all things to all people.”

Kulongoski first proposed a government restructuring in May, but on Wednesday (Aug. 5) the Salem (Ore.) Statesman Journal reported that the governor added 50 specific suggestions to eliminate, suspend or merge state programs to save about million a year. One example is merging the state’s countless natural resource agencies.

Oregon isn’t alone in this re-examination of government services. The worst recession to slam states since the Depression is forcing several governors and state legislatures to rethink what services government should provide and how to deliver them at a lower cost.

Louisiana Gov. Bobby Jindal (R) spoke July 27 at the first meeting of the state Commission on Streamlining Government, a panel Jindal and the Legislature created to come up with recommendations to downsize government through such things as merging, abolishing or privatizing state agencies. “Everything is on the table,” the governor said.

Michigan Lt. Gov. John Cherry, at Gov. Jennifer Granholm’s (D) request, is working on a plan to reduce 18 state departments to eight. Connecticut Gov. M. Jodi Rell (R) and Virginia Gov. Tim Kaine (D) also have been active in streamlining efforts. Kulongoski’s counterpart to the north, Washington Gov. Christine Gregoire (D), speaks about “rebooting” state government to make it a more “nimble and relevant” partner in Washington’s economy. She wants to eliminate 150 boards and commissions and close 25 licensing offices for drivers.

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Stephen Fehr

Stephen Fehr is a senior officer with Pew’s government performance portfolio. He is a lead writer on many of the products generated by the portfolio, specializing in state and local fiscal health.