Creativity part of the game plan for governments facing budget shortfalls

With budget negotiation under way in many government subdivisions across the country, budget cuts have caused many state, local and federal government executives to become innovative in the way they approach the upcoming fiscal years’ budgets. Government executives are constantly looking for innovative ways to further reduce spending while seeking new sources of revenue.

Because these government entities must meet certain mandated services for their citizens, creative thinking and new and innovative solutions are the norm.

These are some of the ways government officials are responding to budget shortfalls and increasing demand for services:

Privatization

Privatizing services has become common in the areas of auditing, bill collecting, utility meter reading, landscaping, maintenance and security. Even more services are being studied to see if privatization will be beneficial after governmental staffing has been reduced significantly within many government jurisdictions. New services being outsourced include human resources, internal training, vehicle maintenance and the operation of public transportation systems. Interestingly enough, public officials in many parts of the country are openly soliciting ideas about privatization options.

Cooperative Purchasing Programs

Numerous public agencies no longer can allocate the internal resources required to oversee major procurements. As a result, they are turning to cooperative purchasing programs as a way to streamline their purchasing and contracting activities. There are dozens of cooperative programs that work nationwide. And, the Federal Cooperative Purchasing Program began offering services last year to all public officials interested in purchasing computers, network equipment and telecommunication technology. This approach saves taxpayers money and helps the state remain within its budget. Government contractors should watch this trend carefully because not being connected to a program could soon limit contracting opportunities.

Consolidations

Consolidations at the county level is a trend that is increasing within municipalities and school districts. The most common consolidations historically have occurred in the areas of economic development, law enforcement, library services, tax billing, 9-1-1 programs and dispatching. Counties and cities will continue to work together to consolidate programs and services related to fire protection, water and sewer services, health care, information technology, EMS/EMT, facilities, highway and street maintenance.

Public-Private Partnerships (P3s)

P3s are gaining in popularity. Public-private partnerships being instituted by governments include major construction projects, asset sale/lease back engagements, water system design/build and operate projects and almost any other type of initiative that will require a large capital outlay of funds. P3 conferences are being held throughout the country and many European firms are making large investments into this marketplace in the United States. Corporate America should definitely take a long hard look at public-private partnerships because the marketplace will be huge and the opportunities diverse.