by Rep. Dee
Richard would cut up to a tenth in total spending of all contracts, for
next fiscal year only. Treasury John
Kennedy testified to the House Appropriations
Committee there were at least 19,000 contracts spread across the state,
with perhaps as many as $7 billion in value. He thought $500 million could be
lopped off, which should not be priorities for this budget year. He read a few
summaries which seemed particularly trivial, such as seat belt usage by school
children, chimpanzee viewing, and field trips for fashion. He also gave
examples from correspondents of how procedures can allow for lack of oversight
for the scope and amounts of them. He said one approach could be to have the
Joint Legislative Committee on the Budget review contracts from $50,000 and
above, in a simple procedure.
in response to questions, noted that this was a result of policy-making within
agencies that needed further review. He said the 10 percent approach was a way
to flush out those of presumed low priority. Perhaps both approaches, which
would create a bottleneck, could do the trick. Rep. Joe Harrison
wondered whether current state employees became future contractors; Kennedy
claimed no review was occurring to know this.
asked how much was federal money. Kennedy said there were but could give no specific
amount, and said regardless of source, low priorities should be eliminated. He
also said renegotiation was possible to save money, and said maybe an amendment
could add that.
Tony Ligi asked
whether the bill would prevent those rejected or vetoed items from reappearing
in contract form, as Kennedy testified he had found at least 24 instances. Kennedy
said not, but an amendment would be welcome.
wondered whether the priorities such as poverty reductions would not get short
shrift. Kennedy said federal dollars probably will start declining for this
area anyway, and on the state side priorities would be upheld with bureaucrats,
although legislative review would provide greater assurance. Smith said that addition
might be too costly and time-consuming.
said that with all of the questions that were out there and with the amendment
suggestions, why not convert the bill into a study resolution? Kennedy said the
Commission on Streamlining Government in essence had done that, and he thought the
problem was obviously rendered through its review.
representative of the Secretary of State said even this cut would lop off in
federal contracted money what they argued were priority and irreplaceable.
Kennedy said another amendment could allow for an escape provision. Chairman Jim Fannin said
even with that, it would push greater reductions onto others.
of Administration Paul Rainwater spoke in opposition, saying that the Gov. Bobby
Jindal Administration already had cut over 9 percent in contracting from
the previous year, and 15 percent the year before and this could be checked through
budget authority granted. He said the budget process existed to vet contracting
money requested (except for emergency adjustments). He also noted this could be
a barrier to privatization as well. He claimed overall the present process was
working and provided greater flexibility than the bill’s approach.
asked whether vetoed legislation was reappearing in contracts. Rainwater said
he had not heard of that and it would be something that would draw a serious
response. However, some areas of government are granted autonomy, especially
higher education and for everything under $20,000, where this might happen. But
an arbitrary approach, he noted, was what the bill did and would not work as
well. Kennedy responded by saying it would not be arbitrary, in a small breach
of protocol as this was happening during to the opposition testimony phase.
Burrell also asked Rainwater about the utility of a study bill, who said more
information was good when regarding the many unintended consequences that could
occur with the bill.
to questions by Smith, Rainwater noted the inspector general’s office, his
divisions own resources, the Legislative Audit Advisory Committee, and the
Legislative Auditor all were existing methods to review contracts, that a
process was in place. Smith recommended agencies themselves conduct these kinds
of review to justify. Rainwater pointed out that a large number of the examples
Kennedy had brought up had come through federal dollars that the state would not
have gotten anyway and had become extinct. Some were required as part of other
high-priority items by federal law.
wondered whether the 30-day escape clause in contracts would not be used as a
tool for renegotiation. Rainwater said that would be on legally shaky ground as
a tactic, because it would circumvent the legal bid process. They could reduce
demands on contractors for lower amounts, and had been.
Kennedy said the time was right to proceed, and not to study it. There was no objection
to favorable passage.
Richard’s HB 328
would reduce 5,000 jobs over the next three years in the executive branch as
well. Kennedy said attrition should take care of this, and it would force
reorganization to make state government less top-heavy, which the Legislative
Auditor said was the case. Or, spending cuts on personnel could do the same,
which he said constituted $8 billion in all compensation. Even if some was
forced onto the state by federal jobs, significant reductions still could
again spoke in opposition. He said strategic cuts were necessary and they were
being done, both in numbers and jobs – producing the lowest numbers in 20
years, claiming $1 billion in savings. However, benefits costs were driving
compensation costs per employee higher. Plus, responding to questions, he said while
some agencies like higher education had autonomy in hiring, they still had to
adhere to their budgets.
closed by saying the cost of labor was not being controlled as it should be,
and this bill could do it. He said at the salaries that cabinet secretaries
got, they should be able to do this strategically. Without objection, it
OF THE DAY:
you can't find $250 million to cut from this, you must be from Ole Miss.
Kennedy, in his closing remarks on HB 327.