Tracking Progress
Initial reports indicate that the Commonwealth's efforts to re-engineer state government are exceeding expectations

Intentioned plans to improve state government have come and gone over the years, some creating isolated improvements and others remaining buried in documents. So it was with some cynicism that taxpayers and government employees greeted the latest plan to streamline state government programs, cut costs, and improve services. EMPOWER Kentucky, Governor Paul Patton's ambitious program to make state government more efficient, has a lofty goal -- to redesign state government.

Patton began developing EMPOWER Kentucky in late 1995. He was successful in gaining the Kentucky General Assembly's support in 1996 with an initial $103 million appropriation. EMPOWER is a program that will spend millions in order to save many more millions.

The idea behind EMPOWER -- which stands for Empower our Workforce with Effective Resources in Kentucky -- is a redesign of government processes, similar to what many private companies have undergone in a process called re-engineering. Ron Bingham, the man Patton chose as project manager of EMPOWER, has experience with re-engineering in the private sector. Bingham led Lexmark International, Inc.'s re-engineering efforts, which reportedly saved more than $150 million for the company. Still, Bingham is cautious about comparing state government's experience with redesign to that of a private company.

"I'm not trying to make government look like private industry," Bingham noted. "But that doesn't mean that I can't steal from private business what makes sense. If they're doing something I like, then let's try it here."

That is exactly what Bingham has done. Over the past year, Bingham's office has started much of the major implementation of EMPOWER Kentucky. He met with budget officers in various state government cabinets and told them of reductions that would take place in their budgets.

"It was a very painful time," Bingham said. "But it was what made EMPOWER real."

He and his staff were able to convince agency leaders that they would save the money that was redirected -- plus more -- if they fully implemented EMPOWER programs.

"We have met or exceeded all savings estimates," Bingham said. "Not only have we gone past this period of pain, but the cabinet secretaries are saying, ÔHey! This works!'"

Estimates from 1997 had EMPOWER saving more than $125 million a year by the year 2003. Bingham now predicts total general fund benefits as a result of EMPOWER Kentucky could top $604 million by fiscal year 2004.

So how is the money being saved? To answer that question, one must consider each of EMPOWER's six initiatives.

Simplified administrative services

This EMPOWER project involves how Kentucky handles its cash. It covers how accounts receivable are managed, how vendor payments are processed, how goods and services are purchased, stored and distributed, and how technology can be used to optimize financial management.

Bingham points to several accomplishments in this area. One is in the elimination of many state warehouses. Over 30 warehouses have been closed so far in favor of just-in-time delivery of goods. Many more are under review and may be closed in the future.Workers in those warehouses have been reassigned, resulting in no layoffs and no employee grievances, according to Bingham.

Agencies also now use procurement cards, which Bingham said eliminated 53,000 paper pay documents last fiscal year and resulted in faster payment to vendors.

Statewide purchasing contracts have also resulted in financial savings. Things like office supplies, janitorial supplies, fertilizer and building materials are now purchased en masse rather than on an agency-by-agency basis. In some cases, Bingham noted, these contracts have saved the government more than 20 percent off the previous cost.

Improvements to personnel processes

EMPOWER Kentucky teams are also taking a close look at Kentucky's personnel system and are attempting to enhance placement and recruitment, automate the test review system, provide on-line access to personnel records, and streamline the workflow, among other things.

So far, EMPOWER has assisted in getting state job vacancies posted on the Internet, posting employee benefits information, posting testing procedures and providing state application forms online. In addition, all employment applications are stored on a new computerized imaging system for immediate retrieval by authorized personnel.

The improvements have helped lead to a significant increase in applications, meaning that state government, as an employer, can choose from a larger pool of job candidates.

Simplified revenue systems

Kentucky is also stepping up its efforts to collect money owed to the state by using technology to enhance its collection systems. For example, the state is now matching federal tax filers with Kentucky tax filers, identifying businesses that operate in Kentucky but fail to register and file Kentucky tax returns, and including out-of-state corporations with tangible property in Kentucky in audits. The state is also attempting to reduce the complexity of tax administration and, in general, manage information more efficiently.

One accomplishment Bingham recently related to a state program review committee was the identification and registration of over 800 employers for withholding tax.

Bingham noted that the various changes resulted in $5.2 million being added to the general fund in fiscal year 1997 and $23.5 million being added in fiscal year 1998. He predicts that total revenue benefits as a result of these changes will top $400 million through fiscal year 2004.

Simplified access to Commonwealth services

One of the goals of EMPOWER, aside from enhancing revenue, is to make it easier for Kentuckians to get access to health, welfare, job training, job placement and job education services. Pilot programs are now underway that explore the feasibility of virtual offices, or telecommuting. Information on local, state and federal services is also being placed on the Internet, and technology is being used to link employees in state agencies to allow them to communicate more easily.

Transportation process improvements

Improvements to Kentucky's transportation processes have included things like combining application forms for the motor carrier industry and closing a warehouse that stored license plates in favor of having the plates shipped directly to county clerks.

Several transportation processes are under review. One is an attempt to reduce the time required for the development of highway projects and to adhere more closely to project schedules. Another being investigated will upgrade a shared vehicle titling and registration system with the county clerks.

Bingham estimates that changes in the vehicle titling and registration process and transportation delivery process will save Kentucky nearly $50 million through fiscal year 2004.

Simplified regulatory services

One of the most enduring complaint citizens have about state government has to be that of navigating the red tape associated with obtaining various state permits and licenses. This area is receiving special consideration under EMPOWER.

Electronic processing was implemented for Kentucky's underground storage tank program and electronic permitting is being investigated for the state's surface mining programs. Field inspectors for the Kentucky Department of Agriculture are now using mobile computers to assist in their daily work.

EMPOWER is also assisting Kentucky's Business Information Clearinghouse and the Secretary of State's Office in the development of a computer program that will allow entrepreneurs Internet access to a complete list of state licenses and permits needed for their particular type of business. This one-stop business licensing information project is currently underway and expected to be available in early 1999.

Other processes

Many of EMPOWER's initiatives are designed to generate more money for the state's coffers. But Bingham notes that an equally important aspect of the program is to improve services to Kentucky citizens. Internet access in all of Kentucky's public libraries falls under this heading. EMPOWER now has approval to fund workstations in all 194 of Kentucky's public libraries.

Pilot programs in selected libraries have shown that "usage is far greater than we expected," according to Bingham.

Funds from EMPOWER combined with a contribution from the Gates Foundation will make Internet access in all public libraries a reality.

The players

EMPOWER has, in many ways, shaken the status quo in Kentucky government. The program is far-reaching and has touched nearly every state agency in some manner. In the early stages, some feared this redesign would hurt state employees by eliminating jobs, but Bingham and his staff have been able to considerably abate those fears. Reduction of the workforce has thus far been accomplished through attrition. Employees whose jobs were eliminated have been retrained and reassigned, according to Bingham.

Kentucky legislators, who were initially among some of EMPOWER's most vocal critics, now seem to be mostly supportive. That turnabout has taken much time and effort. Bingham credits Gov. Patton's leadership and the day-to-day influence of Crit Luallen, secretary of the Governor's Executive Cabinet, for helping ease fears. Cabinet secretaries and constitutional officers have also -- for the most part -- accepted EMPOWER, according to Bingham.

But the real test has been in gaining the support of state government employees. Hundreds of employees currently serve on redesign committees that critique the way state government does its work.

"You have to involve the workers," Bingham explained. "That really is necessary. We've allowed front line employees to look at what they're doing and say, "Hey, there's a better way.'"

Watchdogs

EMPOWER is certainly not without its critics. Some groups -- while taking no official stand on the overall EMPOWER project -- are nonetheless closely monitoring it.

The Kentucky Association of State Employees (KASE) is a union that represents approximately 3,000 state employees, most of them white-collar professionals. Charles Wells serves as executive director.

"We're just monitoring Empower Kentucky," Wells said recently. "The problem is, because it's not specifically and narrowly defined on paper, it's really hard to say what is good and what is bad."

Wells noted that some positive things have been credited to EMPOWER Kentucky, such as employee training, streamlining of services and enhancements in technology. However, his group is concerned about various pilot projects on personnel issues and opposes any attempt to "experiment with the merit system."

"We vigorously oppose that," Wells noted. "We're also going to oppose anything that would diminish employee rights."

The future of EMPOWER

Current projections show EMPOWER savings anticipated through the year 2004. But the continued success of implementation depends, to a large extent, on the support of top state officials. Patton and other state constitutional officers are now able to succeed themselves. So if Patton is successful in winning a second term, EMPOWER is likely to continue to be a priority.

The infrastructure for making EMPOWER part of the state government institution is already in place. The EMPOWER program has its own office in the state capitol and a team of employees under Bingham whose job it is to monitor the program's progress.

In addition, Gov. Patton late last year announced the hiring of Aldona Valicenti, formerly with Amoco Corporation, as chief information officer to help coordinate implementation of technology throughout state government.

Valicenti is responsible for implementing the state's technology plan, which should eventually allow state government computer systems to communicate with each other. Valicenti's hiring was the result of a recommendation by Empower committees that the state's computer technology be integrated. Currently, Kentucky has more than 50 systems, few of which can communicate with each other.

Her hiring bodes well for the overall EMPOWER project, according to Bingham, since technology does play such a large role.

Bingham is pleased with EMPOWER's progress so far.

"We're obviously committed to financial returns through 2004," Bingham noted. "But I hope that's not the end all."

Instead, he hopes that EMPOWER will be successful in encouraging officials and employees to look at state government with an eye toward constant improvement.

"If that happens, then it never ends," Bingham said.

Lisa Summers is a staff writer for The Lane Report.

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