Jindal-hired contractor releases its savings ideas
Gov. Bobby Jindal
BATON ROUGE (AP) — A contractor hired by Gov. Bobby Jindal’s administration suggests bolstering tax-collection efforts, shrinking leased offices, consolidating copier contracts and selling state property among dozens of ideas to help the state better balance its budget each year.
New York-based firm Alvarez & Marsal turned in its 425-page report, which outlines proposals to save the state $2.7 billion over five years, either by cutting costs or increasing state revenue.
The Jindal administration released the report Monday in the final hours of the legislative session, though some of the suggestions had been rolled out earlier to lawmakers.
“These are real, common-sense solutions that will not only save money for the people of Louisiana, but will improve the way we operate,” Commissioner of Administration Kristy Nichols, the governor’s top budget adviser, said in a statement.
Some ideas are relatively modest, such as shrinking toll-free numbers across agencies, while others are more sweeping, such as centralizing how state agencies buys goods and services and restructuring agencies’ management.
The consultant suggests charging for public records in an office that doesn’t currently levy a fee, lowering insurance levels on state-owned ferries and barges and centralizing state police patrol communications. It wants home health care aides to log their time through electronic timesheets rather than paper ones to cut down on overpayments.
The report proposes raising fees on services such as the lease rates for pipelines that run across public lands and water bottoms, and it says the revenue department could beef up its tax collection efforts and generate more cash for the treasury.
Forty percent of the savings, or more than $1 billion, involves changing the health care plans offered to state workers, retirees and their dependents, both through incremental premium cost hikes and through benefit changes.
The next-largest item involves strengthening the tax collection work of the Department of Revenue, which Alvarez & Marsal estimates could generate another $333 million in tax income for the state over five years.
The consultant recommends working through an audit backlog, broadening audits of sales tax returns, improving technology and creating a special severance-tax audit team because it says the department currently lacks expertise on the subject.
Alvarez & Marsal spent five months digging through nine agencies’ operations, coming up with 72 recommendations. The company has been paid $4.7 million so far and is expected to receive a total of $5.4 million for its work, according to Meghan Parrish, a spokeswoman for the governor’s Division of Administration.
The report offers ideas for more than $300 million in savings for the upcoming 2014-15 fiscal year that begins July 1. The budget already assumes more than $70 million of them will be put in place.
Some of the suggestions, such as fee hikes and broad organizational restructuring, would require legislative approval. But other ideas could be accomplished through operational changes by the Jindal administration.
The ideas include:
—Changing health care plans offered to more than 225,000 state workers, retirees and their dependents, both through premium hikes and benefit changes, to save more than $220 million a year.
—Reducing the number of vendors the state uses for goods and services to save $55 million a year.
—Strengthening tax collection in the Department of Revenue to raise more than $50 million in money for the state treasury each year.
—Changing the process for buying insurance on state-owned property to save $21 million a year.
—Requiring home health care aides to log their time through electronic timesheets rather than paper ones to cut down on errors and save $18 million a year.
—Creating a statewide occupancy management system and database to better manage the office space owned by the state, eliminate leased space and save $11 million a year.
—Centralizing administrative functions, consolidating equipment and hiring more in-house engineers instead of contract engineers to help the state transportation department save $20 million a year.
—Property sales to generate at least $32 million.