Had the pleasure of spending a while early this week discussing energy with Rep. Josh Revak and his aide Forrest McDonald. During the discussion, the topic of the budget wars came up, and along with it a proposal to incentivize the state bureaucracy to participate in finding places to right size the state budget.
As it turns out, there is such a vehicle. It is referred to as “gainsharing” in the ER world and has been tried by at least two states in the Midwest to varying degrees of success. It is also quite common in the business world.
Where are we today in the annual Alaska state budget wars? On the one hand, we have Governor Dunleavy’s proposed budget which will not only give full PFDs but also balance with $1.6 billion in cuts. https://gov.alaska.gov/an-honest-budget-2020/
On the other, we have what appears to be close work between House and Senate budgeteers producing what looks like a budget that balances with a small PFD, a mere $300 in actual cuts, and a draw from the Constitutional Budget Reserve (CBR). The budgeteers appear to want the Governor to do the heavy lifting with his veto pen.
State unions are nicely spun up, with the Alaska Education Association flooding all legislative venues with angry union members demanding state income taxes, budget increases, and complete elimination of the PFD. The union members show up early, get in the front of the line, and get all the available slots for public comment. If they were this efficient teaching their students, public schools and universities wouldn’t be nearly the mess in this state that they are today.
Revak’s observation that we ought to be leveraging the expertise of our public employees is an accurate one. Who knows better what improvements, changes, cuts or increased spending are possible or will have the largest impact on current and future operations than the people who are actually doing the job? The problem with this is that workforce is unionized, and there will be tremendous organizational pressure on individuals by their unions to never speak up, never step out of line, never become the nail that gets hammered down. Bang. Bang. Bang.
One solution that has been tried in a few states is the notion that those employees who suggest something that when adopted will save money, make the government work better, or help do more with less should be rewarded for their suggestions in the form of a large, cash reward. This is called gainsharing. And it has been used from place to place in both industry and at a few states (MN and IL). https://www.auditor.leg.state.mn.us/sreview/gainsharing.pdf
This sort of effort is not a long-term program, as it usually installed in a time of tight money, when the entity adopting it needs immediate improvements. And the employees respond picking off the easiest gains, the low hanging fruit. About half of the adopters shut the programs down after a few to several years.
Revak is proposing legislation that will bring gainsharing to Alaska. This is a sound, proven approach to tightening budgets and improving performance. And any employee can play. It won’t take more than a couple large caliber checks written to state employees to open the floodgates for significant participation. We will see what sort of retaliation is aimed at union members who participate. In order to stave this off, perhaps there ought to be a non-retaliation or confidentiality clause in the legislation. Penalties for retaliation would be funded out of the participating union coffers.
Whatever happens, this is an idea whose time has come to Alaska. Sooner would be better than later. Congratulations to Rep. Revak to proposing it.
Alex Gimarc lives in Anchorage since retiring from the military in 1997. His interests include science and technology, environment, energy, economics, military affairs, fishing and disabilities policies. His weekly column “Interesting Items” is a summary of news stories with substantive Alaska-themed topics. He is a small business owner and Information Technology professional.
