Efficiencies might help fix budget woes

It is highly unlikely that the state can save as much money as an efficiency report claims. But the report does raise hopes that at least some of the state’s budget problems can be solved through smarter management – not by continuing to raid the state highway and children’s funds, as Gov. Sam Brownback’s latest budget plan proposes.

The preliminary report from the consulting firm Alvarez & Marsal included 105 budget recommendations with the potential to save $2 billion over the next five years. The biggest share of the savings involved insurance.

The consultants said that the state could save $360 million over five years if school districts adopted a statewide health and benefits plan. That likely is a good idea, though it’s not as simple as it might sound. Under current law, employee benefits are negotiated between school districts and their local teachers unions. Also, some districts might save money by joining a larger insurance pool while others might not.

The state also could save $123.8 million over five years if it moved all state workers to a high-deductible insurance plan, according to the report. However, the state is already having problems recruiting and retaining employees. Does it make sense to reduce benefits, which have been among the few draws of state employment?

The report also called for the creation of a centralized Office of Risk Management to oversee the state’s insurance bids, which it said could save the state $170 million over five years.

Other education efficiencies included adopting a statewide procurement plan for school districts. The change could save $40 million over five years, the report said, but it likely would upset merchants who pay taxes to support their local schools and now might not be able to sell them supplies and services. The report also called for setting recommended levels for cash reserves for school districts and using reserves above that level to offset future education funding.

Another major recommendation was having the Kansas Department of Revenue hire 54 more revenue officers and 14 auditors. The consultants predicted the staffing increase could bring in $321 million in additional tax revenue over five years.

The report said its recommendations could serve as “a route toward achieving major cost savings, efficiencies and other benefits.” But other states and cities that received similar reports have found that projected savings were exaggerated and many of the recommendations were impractical or counterproductive.

Still, the report has some promising ideas. Now it’s up to lawmakers to sort through the recommendations and determine which ideas make sense to pursue.

This story was originally published January 13, 2016 at 6:07 PM with the headline "Efficiencies might help fix budget woes."