Budget Fight: What Public Employees Really Cost

Are they coddled, exploited or just misunderstood?

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Greg Miller for TIME

Every state is different. In North Carolina, firefighters have a stable, well-funded pension, proof that fiscal discipline is possible

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Georgia was one of those places. Perdue plastered all over the state the motto "Faster. Friendlier. Easier." His task force produced 130 recommendations to make government smarter. Of those, 127 have now gone into effect. Motor-vehicle titles now take five days (not six weeks) to process. Parents can sign their kids up for Medicaid in 15 days, down from 113 days. The state's 32 call centers report monthly performance data, including average hold times (three minutes as of 2010).

In 2008 the Pew Center on the States ranked Georgia among the best-managed states in the country. In 2010, Perdue was named one of Governing magazine's public officials of the year. Around the same time, all three rating agencies rewarded Georgia the highest bond rating, a triple A.

Perdue, who was term-limited out of office in January, understood this mission as an existential one: "On the campaign trail, Georgians told me that they felt like government wasn't working for them, and I promised to change that ... Government is like a co-op. We are all owners and users, and we are all better off when it works." At least four other states — Virginia, Minnesota, Texas and Kentucky — made their bureaucracies smarter over the past decade, implementing more than half the performance-boosting recommendations made by their commissions. What happened in the other states? Not much. They failed to turn proposals into reality — sometimes because no single senior-level person was accountable for seeing the effort through and sometimes because the task forces did not work with the legislature to get it done. "You need a group focused on delivery. It sounds so generic, but it's not there now," says Mendonca, the McKinsey productivity expert. "The problem is not ideas. The problem is making it happen."

Colorado is trying. Last year, teachers' unions, state employees' unions, retirees, state patrol officers and legislators from both sides of the aisle agreed to pension reforms — including caps on annual cost-of-living adjustments for current and future retirees. The state also passed a groundbreaking law tying teachers' job security to measures of students' progress, including test scores.

When Brandon Shaffer, the Democratic president of the Colorado state senate, talks about these victories, he speaks as though he's discussing a painful personal matter. "Nobody enjoyed voting for pension reform," he says. His mother is a retired teacher, and his wife currently teaches fifth grade. "We knew it was urgent, and it would just get worse if we procrastinated."

Colorado still has plenty of problems. A lawsuit has been filed to overturn the pension reforms. And if the economy falters again, more changes may be needed to keep the fund solvent. But Shaffer says he has been surprised by taxpayers' reactions so far. "People come up and thank me for stabilizing the [pension] system. Usually those are people in the system themselves."

Shaffer says politicians from other states have contacted him to hear how Colorado did it. He tells them that what mattered the most was that he and the former Republican minority leader trusted each other. "We linked arms and said, 'We're doing this together, no matter what.' The outside forces couldn't control the process." He also reminds them that voters actually crave a more meritocratic government. "People aren't against making a tough decision in hard times," he says. "But they want to know that it's a rational decision."

— With reporting by Katy Steinmetz / Washington

Ripley is a Bernard L. Schwartz fellow at the New America Foundation.

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