February 12, 2013
Albany, NY

Governor Cuomo Announces Sage Commission Releases Final Report to Modernize and Right-Size New York State Government

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Governor Andrew M. Cuomo today announced that the Spending and Government Efficiency (SAGE) Commission has released its final report on modernizing and rightsizing New York State government. The final report identified initiatives that represent the most comprehensive reorganization of State government since those undertaken by Governor Al Smith in the 1920s. Collectively, they are expected to save over $1.6 billion once fully implemented, improve service to citizens and businesses, and increase transparency and accountability.

 

“The SAGE Commission was tasked with finding innovative ways to transform a state government synonymous with clutter, waste and out-of-control spending to one that is modern, efficient and works for the taxpayers,” Governor Cuomo said. “Over the last two years, my administration has worked closely with the Commission to begin implementing ways to improve state government operations, and they have already shown real progress. Today the Commission has issued their final report with recommendations that have the potential to save New York State over $1.6 billion. The Commission took on a real challenge, and they have truly delivered for New Yorkers. I thank Lieutenant Governor Duffy, Director Paul Francis, Deputy Director Derek Utter, and members of the Commission for their hard work.”

 

The SAGE Commission was created to undertake a comprehensive review of New York State government and identify structural and operational changes that would help make it more modern, accountable and efficient. The Commission focused primarily on the “operations” of State government the work performed directly by State agencies and authorities as opposed to services funded by the State but delivered by other entities, such as Medicaid and education.

 

The SAGE Commission was appointed by Governor Cuomo in April 2011 and includes 20 private sector leaders and four legislative members. The Commission was led by Lieutenant Governor Robert Duffy who served as Chair, Paul Francis, Vice Chair and Director of Agency Redesign and Efficiency, and Derek Utter, Deputy Director of Agency Redesign and Efficiency.

 

The Commission worked closely with the Cuomo administration to identify and implement initiatives to help the state government achieve savings, improve service to citizens and businesses, and increase transparency and accountability. Many of these initiatives have already been announced, completed or are currently underway.

 

The final report issued today is organized into three parts:

  • Reorganizing State Government
  • Reducing Costs and Improving Service
  • Building a Culture of Performance and Accountability

 

An overview of initiatives and estimated savings is below:

 

Reorganizing State Government

  • Consolidations and Rightsizing of Facilities: Savings of approximately $294 million annually to be realized through closing excess prisons, reducing the need for residential facilities, de-institutionalizing mental health and custodial care facilities for persons with developmental disabilities, eliminating excess leased office space by “restacking” State agencies, and consolidating warehouses, printing and laboratory operations.
  • Consolidations of Functions: Savings of approximately $241 million annually to be realized through consolidation and modernization of back-office and support functions, including finance and HR operations, procurement, asset management and call centers.
  • Consolidations of Agencies and Authorities: Mergers and consolidations involving a total of 14 agencies and authorities have been completed or proposed in the 2013-14 Executive Budget. If the additional merger and consolidation options identified by the SAGE Commission for future consideration are also adopted, the number of major agencies and authorities will be reduced by 23% since Governor Cuomo took office.
  • Coordination of Interagency Activities: Savings of approximately $100 million annually to be realized through formal coordination mechanisms for critical interagency activities, including the NY Works Task Force for infrastructure and capital planning, Regional Economic Development Councils, and a statewide Master Plan for all energy efficiency initiatives in State facilities.

 

Reducing Costs and Improving Service

  • Information Technology Transformation: Savings of approximately $290 million annually from (i) organization of the State’s 3,300 IT personnel and infrastructure operations into a new Information Technology Services organization; (ii) modernization of IT infrastructure, including data centers, the conversion from traditional landlines to voice over Internet protocol (VoIP) telephone service, email standardization and user-identity management; and (iii) the acceleration of the development of IT projects that have a high return on investment (ROI) or a high impact on customer service or other types of performance.
  • Improved Customer Service and Process Efficiency: Greater convenience of licensing and permitting through an e-licensing platform that will allow online applications for more than 400 types of licenses issued by State agencies; significantly improved customer service at DMV; streamlined management of the State’s contracting process with not-for-profit and other third-party providers; and savings of approximately $100 million annually through the Design-Build procurement process.
  • Modernizing the Workforce: Savings of approximately $421 million from cost controls through new collective bargaining agreements with no salary increases in the outset of the contracts, increased employee contributions for health insurance, and a new Tier VI pension plan that will save the State and local governments more than $80 billion over the next 30 years.
  • Workforce Flexibility: Increased flexibility in hiring and managing employees.

 

Building a Culture of Performance and Accountability

  • First-ever Statewide Performance Initiatives: Performance-based school aid and teacher evaluation system; a statewide performance management system for all major agencies and authorities, to be launched publicly by the end of 2013; and initiatives, such as Open New York, to increase State government transparency and expand access to State government services, records and data.
  • Focus on core mission and effective implementation: Framework for review of activities that are not central to advancing the core mission of State government; and implementation of government redesign initiatives through the use of LEAN management process and by leveraging private sector resources and expertise.

 

Upon full implementation, the initiatives identified in the Commission’s report are expected to save the State more than $1.6 billion. A breakdown is included below:

 

 


Savings Upon Full Implementation

Annual Savings (MM)

Consolidation and Rightsizing of Facilities

Closing Excess Prisons

$174

Community-based Juvenile Justice Strategy

44

Deinstitutionalization of Mental Health and Developmental Disabilities Care

50

Office Space Re-stacking

26

Consolidation of Functions and Enterprise Shared Services

Business Services Center

63

Procurement and Strategic Sourcing

160

Cluster-based Call Centers

18

Coordinated Health Insurance Purchasing

104

Consolidation of Agencies and Authorities

Mergers and Consolidations

75

Information Technology

Organizational Restructuring

90

IT Infrastructure Modernization

100

High ROI IT Projects

100

Process Improvements

Design-Build Procurement

100*

Energy Efficiency Master Plan

100

Modernizing the Workforce

Tier VI Pension Plan

**

Increased Employee Contribution to Health Insurance

260

Controlling Wage Increases

161

Total

$1,625

 

*Represents 10% savings on the estimated amount of annual infrastructure spending affected by the Design-Build authority under the Infrastructure Investment Act. Excludes savings from the Tappan Zee Bridge project which are estimated to be at least $1 billion.

 

**The Tier VI pension plan will save the State approximately $21 billion and localities approximately $61 billion over the next 30 years.

 

To view the full report, go to www.governor.ny.gov/assets/documents/SAGEReport.pdf.

 

Lt. Governor and Chair of the Commission Robert Duffy said, “I am proud that the work of the SAGE Commission has successfully assisted Governor Cuomo’s efforts to make New York State government more modern and accountable. As a result of the Commission’s efforts, initiatives are already underway in key areas such as government savings, improved citizen and business service, and government transparency. As we continue to build a new New York, this final report includes important recommendations for the future. It has been a pleasure to act as Chair of this commission, and I commend Paul Francis for his guidance, all of the commission members for their invaluable contributions, and most of all, Governor Cuomo for his vision and leadership in continuing to prove that state government can be both efficient and effective.”

 

Paul Francis, Vice Chair and Director of Agency Redesign and Efficiency, said “The SAGE Commission has identified a total of 100 discrete initiatives, of which 78 have been completed, are in process or have been proposed in the 2013-14 Executive Budget. Another 22 initiatives have been identified as future options once more progress is made on the work already underway. These initiatives are making State government more efficient and cost less to run. They are also helping State government serve the public good.”

 

Senator Liz Krueger said, “How we operate government needs to be dynamic and under constant review for what works and what does not. As a legislator, I was so glad to participate in this process where people in and out of government attempted to drill down on a broad array of assignments and to come up with better models of government service delivery. The report recommends such a diverse set of changes that it would be impossible to agree with every item, and of course the real work is operationalizing the proposals and then ensuring ongoing metric evaluation of outcomes. I am proud of the work of this commission and want to thank the excellent staff the governor assigned to these complex tasks.”

 

Assemblywoman Jane Corwin said, “Creating efficiency in government operations will not only save taxpayer dollars but will improve delivery of services to the residents of this state. The recommendations put forth by the SAGE Commission will do more to reduce the size of government and bring back accountability than any initiative taken to date. I thank the members of the Commission for their efforts to reduce the bureaucracy and put state government on a better path.”

 

Assemblyman Steve Englebright said, “The SAGE Commission has developed ideas that represent thinking outside the box in many areas. This is what the Governor charged the Commission with doing. The Final Report shows a range of both provocative and plausible initiatives that will not only save taxpayers money, but improve the services provided to New Yorkers as well.”

 

Commission Member Peter Solomon said, “From my past experience in government and the private sector, I know how easy it is to be consumed by policy crises and therefore to not focus on the nuts and bolts of running the government. The Governor deserves credit for recognizing the opportunity for improvement in operations and the need to change in light of the overall fiscal constraints of the State.”

 

Commission Member Andrew Spano said, “The State workforce is 14% smaller now than it was 4 years ago. This smaller workforce could not function effectively without the technology initiatives and various consolidations of SAGE."

 

Commission Member Robert Samson said, “The State's IT transformation adopts the best practices of the private sector. This new approach to technology is modernizing the State's IT infrastructure, provides more tools for agencies to work with and improves customer service while increasing efficiency and saving money. This IT transformation is making New York State the leader among states in information technology.”

 

Commission Member Robert Zimmerman said, “Governor Cuomo proposed a very bold initiative that has not been undertaken, since Al Smith was governor 85 years ago. The leadership of Governor and Lt Governor has put in place a blueprint for a more efficient, responsive and leaner government. Their efforts and the work of the Commission are essential in helping New York assume its place of national leadership in the 21st century.”

 

Citizens’ Budget Commission President Carol Kellermann said, “The SAGE Report is a roadmap for smaller, better government in New York State. When these innovative initiatives are fully implemented, they will significantly reduce the cost of government and improve the quality of services delivered to the people of New York.”

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