Since taking office, Gov. Pat McCrory has repeatedly championed his drive to save money by rooting out inefficiency in state government. His administration spent the past year coming up with ways to do that, but its recommendations met with skepticism from a legislative committee on Monday.
The two co-chairmen of the Joint Legislative Program Evaluation Oversight Committee said the report didn’t go as far as they had hoped, and the 70-page report didn’t adequately explain how its recommendations were reached.
“We all expected some major recommendations, something we could get our teeth into,” said Rep. Craig Horn, a Republican from Union County. “We had all hoped, frankly, for more boldness.”
The rebuke poses a hurdle for the governor, who speaks frequently of the initiative he calls N.C. GEAR, an acronym for Government Efficiency and Reform.
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Joe Coletti, who is in charge of N.C. GEAR, acknowledged that the study was more about evaluating the fundamentals of state government – how vehicles and buildings are used, for instance – than an ambitious remake of state agencies from top to bottom.
“As much as we had grand ambitions to accomplish things that had not been tried … the result is perhaps not the greatest thing since sliced bread,” Coletti said. “But if we can slice bread, we think that’s a major accomplishment.”
Coletti said the focus was on identifying ways to save money immediately, and he pointed out that in June the committee made it clear it didn’t want a report that rehashed old ideas and ended up another thick report sitting on a shelf. As a result, the N.C. GEAR report presented a streamlined list of what could be accomplished now, culminating in 18 recommendations – including requiring state agencies to pay rent and utilities from their own budgets, privatizing short-term vehicle rentals, and reducing occupational licensing restrictions.
Some of the recommendations have already been made by the legislature’s Program Evaluation Division and some are in the governor’s proposed budget.
In 2013, the legislature gave the McCrory administration $4 million to hire a consulting firm and report back.
The report contends that N.C. GEAR has identified $14 million in savings for the first year, more than $57 million in the second year of the next budget, and at least $615 million savings over a decade.
“Where do these numbers come from?” asked Sen. Stan Bingham, a Republican representing Montgomery and Davidson counties. “I’m exciting in reading this, but I’d like to see it.”
Sen. Ralph Hise, a Republican from Mitchell County, said there were good recommendations in the report, but he thought a glaring omission was its failure to address Medicaid reform. Coletti said the staff avoided that topic because there were too many unknown variables in play. The legislature is considering options to keep the Medicaid program’s soaring costs in check.
Hise was also concerned about efficiency recommendations to hire a seven-member staff to run N.C. GEAR in the state Office of Budget and Management at a cost of $4.6 million, and to spend $1.4 million on greater enforcement regulations of pet breeders as part of moving the Animal Welfare Section from the agriculture to the public safety agencies.
Trying to persuade legislators to clamp down on “puppy mills” has been one of McCrory’s ongoing frustrations, but it’s not clear how that would save money by eliminating inefficiencies.
The strongest criticism came from Sen. Fletcher Hartsell, a Republican from Cabarrus County, who ran through a long list of complaints about the report’s failures. He asked Coletti to return later this month with some answers. The General Assembly has passed its “crossover” deadline, eliminating consideration this year of legislation that has not yet cleared either chamber.
“Last June you indicated we would be implementing legislation that would be a part of the report,” Hartsell said. “There is none. Crossover was last week. How do we implement it?”
Coletti said he understood that recommendations involving the executive branch would be included in special provisions that will be added to the budget later.
N.C. GEAR recommendations
Highlights of the 18 recommendations include:
▪ Hire staff to continue the N.C. GEAR effort to find savings through efficiencies.
▪ Privatize the state motor pool.
▪ Move the zoo, aquariums, natural sciences and parks from the Department of Environment and Natural Resources to the Department of Cultural Affairs.
▪ Leverage buying power by having schools band together to purchase supplies and services.
▪ Require state agencies to pay rent and utilities.
▪ Reduce occupational licensing restrictions.