Virginia’s Commission on Government Reform & Restructuring Releases Final Report

Virginia’s Commission on Government Reform & Restructuring (CGRR) released its final report earlier this month outlining strategies to reduce costs and improve public service delivery. The strategies outlined to cut state spending by 2% are expected to yield savings and/or cost avoidance exceeding $100 million. Governor Bob McDonnell established CGRR in January 2010 under Executive Order No. 2.

In addressing the first meeting of the Commission, McDonnell said its purpose is “to make government smaller, simpler, and more efficient… [And to] develop ideas, weigh the pros and cons, and make recommendations that (the state) can implement either by executive, legislative, or budgetary action.”

The Commission released 133 observations and recommendations from four Committees: Government Simplification & Operations, Consolidation of Shared Services and Enterprise Architecture, Intergovernmental Relations and Customer Service, Performance, Accountability and Transparency.

The focus on practical application makes the report worth reading in its entirety. That said, some highlights include:

  • Privatizing of the Virginia Department of Alcoholic Beverage Control (ABC) distribution and retail system: While Virginia is one of 18 “control” states where the government has a monopoly on distribution of sale and distilled spirits, the Commission recommends the state privatize its distilled spirits enterprise. CGRR states that the distribution and sale of spirits is in no way a core governmental function. The state would maintain effective health, safety, law enforcement and marketing regulatory authority, as it currently does for 6,657 private sector beer and wine retailers. Reason Foundations’ Leonard Gilroy has written about Virginia ABC privatization extensively here, here and here. See’s recent piece on the subject, “Virginia Is For (Liquor) Lovers.”
  • Developing and enforcing broad asset management: CGRR recognizes that many state agencies have not complied with Virginia state statute requiring an annual cataloging of state property. The Commission recommends that existing state law be enforced, whereby all state agencies would provide an inventory of all real property assets. The goal of this inventory is to then seek if public assets could be sold, leased or exchanged for other lower cost alternatives. This would lead to common sense solutions, such as pursuing divestiture for multiple agency buildings and consolidating to one larger and less costly facility. Reason Foundation’s Anthony Randazzo explored this approach in this recent policy study.
  • Expanding insurance and benefits bidding: The Committee suggests allowing localities and state agencies to bid together for services such as health, vision and dental insurance. This is one of many simple reforms that, if enacted, would immediately save taxpayers money.
  • Integrating shared services, such as payroll and human resources: CGRR lists a number of departments and agencies that would benefit from consolidating payroll and human resource services. For example, it recommends the Virginia Community College System consolidate payroll services for all 23 member-institutions. This is a smart, proven approach to achieving greater efficiency in government. For example, a 2005 study by Reason Foundation and Deloitte & Touche USA LLP (available here) found that shifting just a quarter of tax dollars spent by school districts throughout the U.S. on non-instructional operations to shared services, for example, could potentially yield savings in the range of $9 billion.

Other noteworthy recommendations include:

  • Eliminating the requirement that the Virginia Department of Transportation advertise RFPs in the newspaper;
  • Encouraging state employees to telecommute and use alternative work schedules
  • Establishing standard electronic forms for all agencies;
  • Eliminating arbitrary and uninformative maximum employment level requirements for state agencies;
  • Evaluating the 500 mandates the state places on local governments, and eliminating unnecessary ones; and
  • Eliminating a number of state commissions; such as the Chesapeake and Ohio Canal National Historical Park Commission, which has not been filled since 1997.

Virginia is not the only state seeking to cut costs and improve public service delivery. Last year, Louisiana’s Commission on Streamlining Government released a set of over 230 reform recommendations estimated to save the state at least $1 billion per year. In New Jersey, the Privatization Task Force established by Gov. Chris Christie released a report earlier this year; and in Arizona, Gov. Jan Brewer established a Commission on Privatization and Efficiency (COPE) that released its initial report this past September.

Since its establishment in January, the work done by the Commission on Government Reform & Restructuring has been both comprehensive and substantive; and the McDonnell administration is already following its counsel. For example, the Virginia Department of transportation consolidated its local toll-free numbers into one call center, reducing overlapping staff from 100 down to 25. It will be interesting to see how other recommendations in this report fare in the coming years.

Harris Kenny is a research assistant at Reason Foundation