The UrgencyOf Change

Public Division Leadership BoardJanuary 23-24, 2009

“I want to make government cool again.”

Barack Obama:

“A government big enough to give you everything you want is big enough to take everything you have.” — Barry Goldwater

40-Year War Against Government

“The nine most terrifying words in the English language are: ‘I’m from the government and I’m here to help.’ ”

— Ronald Reagan

40-Year War Against Government

40-Year War Against Government

“The era of big government is over.”— Bill Clinton

“They want the federal government controlling Social Security like it's some kind of federal program.”

— George W. Bush

40-Year War Against Government

New Attacks on State, Local Government

“Conservatives need to put as much focus and attention on reducing state and local spending over the next years as they do on the federal budget.”— Grover Norquist, right wing strategist

States Are In TroubleStates with Funding Shortfalls (in yellow)

Revenue Shortfalls are Huge

• For FY 2009 (the current fiscal year)

– 45 states with shortfalls– $91 billion– $1 short for every $8 needed

• For FY 2010 – Even more states with shortfalls – Likely $145 billion or more

No decline

> 30%

10 to 20%

0 to 10%

20 to 30%

Sources: Fiserv Lending Solutions, Moody's Economy.com, OFHEO

Property Tax Declines Hit Local GovernmentProjected Peak-to-Trough House Price Declines

New Attacks on State, Local Government

Public ServicesIn the Crosshairs“Spending limits will do to government what Japan did to the auto industry.” — Grover Norquist

How Big? How long?

($40)

($75) ($80)

($45)

($91)

($145)

($180)

2002 2003 2004 2005 2009 2010 2011 2012($200)

($150)

($100)

($50)

$0

State Revenue Shortfalls by Year ($ in billions)

Last Time This Time

Estimate

??

• Warped tax system, unsustainable budgets for government

• Damaged image of public employees

• Deregulation lets Wall Street, banks and investment houses run wild

• Layoffs and service cuts

40-Year War on GovernmentHas Undercut Public Services

The biggest economic crisis since the Great Depression

2 Million Jobs Lost in 2008; 1 in 7 without a job

$2 Trillion in Pension Wealth Wiped Out in Financial Meltdown

$15 trillion in at risk mortgages, 1 in 10 mortgages foreclosed or delinquent

“Things are going to get worse before they get better.”

What Does it Mean for Us?

Today, We Look a Lot Like The UAW Once Did

• Growing

• Employer-paid healthcare

• Employer-paid pensions

• Job security

• Generally good wages

Today1950s-1960s

Like SEIU today, the UAW was innovative, visionary

and led the labor movement

Flint Sit-down Strike – 1936-37

Like SEIU today, the UAW was a progressive

leader in America

Walter Reuther and Cesar Chavez

Walter Reuther and Dr. King

But Then…

The UAW stopped challenging the Big 3

and became a defender of the

status quo

As Reuther predicted, private healthcare and pensions were not sustainable and forced the UAW

to take positions at odds with the community and the common

good

As a Result…

The public today sees auto workers as just another special interest

So…

Widespread opposition tothe auto bailout even though it puts millions of good jobs at risk

1969

1.5 million

2008

400,000*

UAW Members

• Ignored quality for too long

• Faced lower standards in the non-union South

• Eventually could not sustain pay and benefits much higher than the rest of the workforce

• Took public positions that lost public support & moral high-ground

The UAW: A Cautionary Tale

* Even though total auto industry jobs grew during this period

Could It Happen to Us?

How would the leaders of the UAW have answered that question in their heyday?

Making the Connection: Auto Industry = Public

Services“I would analogize it to what thegovernment is doing with theauto companies. Congress said, we’ll give you the money but you have to show us a plan for sustainability. Now government is in the same position of the auto companies, but they haven’t come up with any plan for sustainability.”— Robert Bixby, Director, The Concord Coalition, 1/7/09

The Right is Gearing Up a

New Wave

Their Aim is Starting

to Point Directly At

Us

They Have a Powerful Message“Every person in every town in America will know the reason their library is closing early is that public employees have defined benefit pensions.”

Grover Norquist

Even Our “Friends” Are Lowering Standards

Union Sues Gregoire for Not Funding Contract

Corzine to Cut Payments to Pension Plans

Paterson Offers Draconian Budget Cuts

Strickland orders another $640 million in budget cuts

We Know What’s Coming

• Layoffs

• More pressure to privatize

• More pressure to cut wages and benefits

• More demand for services while the staff to provide them shrinks

• Greater reliance on technology vs. people

How do we get out of this mess?

Short-Term Thinking Won’t Work

We can no longer limit our thinking to the next contract or the next budget. In this environment, having a contract is a legal position, not a guarantee

We can’t wait – we need to merge short- and long-term strategies right now

• Government more as “arranger” than “provider” of public services

• National health and new medical technology will have huge impact on public budgets and health programs

Change is Coming

• More government by “network” – Wisconsin/Minnesota may share prison food and salt purchasing; merge call centers & licensing

• Prison inmate releases and less prison construction will mean more community-based programs

Change is Coming

• More technology vs. people delivering services (websites, kiosks)

• Increased contracting out

• Increased globalization

Change is Coming

Quality is Job 1

Can We Meet the Challenge with Real Change of Our Own?

When reality and hype don’t match up people see right through it

• Every local with a quality committee that constantly works to improve services?

• Every local with a “Blow the Whistle on Waste and Fraud” operation?

Can We Lead the Change?

• Every local insisting on more energy efficiency and environmental responsibility?

• Demanding that all budgets be transparent and online?

• Demanding that all tax breaks or cuts show who benefits, who pays?

Can We Lead the Change?

Could We Imagine a

“Make GovernmentCool Act”

Introduced in all of our states, cities, counties, and school districts – all on the same day across America so we take the lead on quality, efficiency, and innovation?

Other BIG ideas?

Adjusting to Our New Reality

The UrgencyOf Change

Public Division Leadership BoardJanuary 23-24, 2009