MADISON, ST. PAUL – Citing a unique opportunity for reform in the face of difficult economic circumstances, Wisconsin Governor Jim Doyle and Minnesota Governor Tim Pawlenty today announced a nation-leading effort to identify potential shared services between their states. At ceremonies in Madison and St. Paul and today, Governors Doyle and Pawlenty signed Executive Orders directing state agency commissioners and secretaries to identify possible cooperative service agreements between Wisconsin and Minnesota’s state agencies.
Residents and businesses in Wisconsin and Minnesota are currently experiencing difficult economic times. Both states are facing multi-billion dollar budget shortfalls and similar challenges in meeting demands for state services with limited revenues.
“The people of our states are used to seeing neighbors cooperate to get through challenging times,” Governor Doyle said. “This is a common sense way to cut government spending while protecting essential services during a tough economic time for our country.”
“We’re not proposing to merge the Vikings and the Packers, but we are going to seek out every area where we can save money and improve services by working together across state lines,” Governor Pawlenty said. “This is an historic agreement between our two states that can serve as a model for the rest of the country.”
Potential Shared Services
Three areas that could offer significant efficiencies through cooperative efforts include:
Procurement
Both Minnesota and Wisconsin were pioneers in cooperative purchasing efforts and cooperate on a number of contracts, including pharmaceutical products. More potential opportunities to combine the purchasing power of the states exist, including these examples:
· Road salt – Winter creates similar demand in both states, and Minnesota and Wisconsin combined buy more than 600,000 tons of salt
· Heavy equipment – Both states have similar needs for tractors and bulldozers.
· Institutional Food – Cooperating on similar menus could save money.
· Software – Licensing agreements typically depend on volume.
Facilities and vehicles
Minnesota and Wisconsin will examine their fixed assets, such as real estate, to see what value can be captured by sharing these resources. Wisconsin’s Department of Natural Resources, for example, may be able to rent helicopter service from Minnesota in order to save Wisconsin money and generate revenue for Minnesota. Other potential opportunities include:
· Other specialized vehicles, such as patrol boats
· Sharing DNR and DOT aircraft
· Warehouse space
Cooperative Functions
Wisconsin and Minnesota will look for opportunities to consolidate functions or capture efficiencies through sharing and specialization. Some common functions may be able to work cooperatively and more efficiently at a larger scale. Others, such as nursery and hatchery operations, may gain efficiencies by swapping products. Areas to examine include:
· Call centers
· Collection operations
· Licensing functions
· Back office functions
· Agricultural, fishery and nursery operations
· Prison industries, programs and facilities
· Duluth/Superior operations
Executive Orders
Governor Doyle and Governor Pawlenty have agreed that cooperative service arrangements between the state agencies of Wisconsin and Minnesota could result in significant improvements to the delivery and cost effectiveness of state services. Both Governors today issued Executive Orders directing state agency heads to work with their counterparts across the border and identify specific areas to implement cooperative service models.
The identification of potential areas for cooperative service arrangements is intended to be an initial step in the process and both Governors have directed their state commissioners to be creative and flexible in their approach and to identify the maximum potential areas for further review and consideration.
Wisconsin and Minnesota’s commissioners and secretaries will report back to their governors by February 27, 2009. Each report must identify the specific activities, programs and services currently provided by their state’s agency that could be met through a cooperative service arrangement with the other state.
To view a copy of the Executive Orders, please visit: http://www.wisgov.state.wi.us/journal_media_detail.asp?locid=19&prid=3893.
