Local Government Cost Reduction
Before I interviewed for my current job, I had never been to St Louis. Most people know St Louis the home of the Arch, the Rams and the 2011 World Series Champions, the Cardinals. If you have never been to St Louis, then you might not be aware that the city has done an amazing job of preserving the area’s stunning natural beauty and numerous parks and well-maintained trail systems.
Now St Louis County is slated to close several of the area’s most popular parks in an effort to reduce their budget. Here is a link from the county website. Parks bring local revenue to those that service park users. Nearby gas stations, hotels, property owners etc will all experience tremendous losses and thus contribute less to the tax base. This is an example of what I have seen many times with community budgets; those in positions of power try to hit people where it hurts, in an effort to prevent the loss of public funding.
What are some healthy ways to reduce local government spending?
- Implement an extensive volunteer network for social services. Perhaps require high school students to provide X number of volunteer hours to graduate.
- Examine work processes and determine ways to improve efficiency. For example, reducing redundancies and paperwork. Utilizing ways to make items last longer.
- Publish pricing of raw materials. Accept bids from companies that can provide goods at a lower cost.
- Optimize transportation. Consolidate trips to limit travel personnel time and fuel costs. Utilize web-based meetings and conference calls for less critical meetings.
- Establish incentives for employees to identify real cost savings. This is often referred to in business as margin management. The incentives may be a deliverable on a final review, organizational recognition or even a gift card.
- Host a concert or other event using a county asset to generate positive cash flow. Green Bay (Brown County) recently opened Lambeau Field for a large concert and generated millions in revenue.
- Hold a public auction event to sell unused items. This will generate revenue and reduce storage costs.
With all these options, why is it so hard to get governments to reduce their budget?
One reason organizations have such difficulty reducing budgets is because many have the policy that if you reduce your spending by 5% this year that you can operate on that 95% for years to come. Leaders know that the 5% savings was due to a non-recurring circumstance and will spend the 5% on whatever… to make sure they get at least the same budget next year. There is often little incentive to improve cost savings. Can we begin by creating these incentives?
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