Reinventing the Empire State

As Peter noted earlier, we're witnessing something rare in New York right now ? a Democratic governor cutting budgets, pushing for property tax caps, even targeting education spending for aggressive reductions. With a $10 billion budget deficit and all its Federal stimulus funding squandered, this may be just what the state needs.

What is perhaps most laudable in Andrew Cuomo's proposed budget is that he seems to be taking the crisis as a chance to bend the cost curve in government for good, taking on basic funding formulas in addition to proposing temporary cuts.?What's not clear, however, is that he, the legislature, public-sector unions, or other players in the state are thinking creatively enough about how to re-envision how government works.

On Monday, Lou Gerstner, former CEO of IBM, had an op-ed in the Wall Street Journal arguing for just this kind of restructuring, and one of his fundamental tenets is, ?Focus on programs, not costs.? In a previous life, when I was a management consultant, this was my dogma. If tasked with cutting 5% of a business unit's budget for a client, my first step was to think about how I would fulfill that unit's mission if I had to start from scratch. If I could succeed in reinventing a process or two more cost-effectively, I could usually make cuts while improving operations ? not making things worse.

At least when it comes to schools, the powers that be in New York seem to be heading down the well-worn path of uncreative cuts that will hurt effectiveness. Gotham Schools quotes a union official making sarcastic comments about the cuts; Mayor Bloomberg has threatened ?thousands? of layoffs in New York City schools; and as Peter mentioned in his post, the governor's own quasi-Race to the Top programs seem destined to be far less effective than reducing state mandates and providing political cover for tough negotiations on public-sector benefits would be.

The optimist in me hopes that by making the case that fiscal discipline is here to stay, Governor Cuomo has at least set the stage for the kind of reinvention New York State's education system needs. But the serious partners he'll need among the state's political leadership are nowhere to be found so far.

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