Commentary

Reason.org
July 20, 2006

Managed Competition in Florida
Jeb Bush's focus on efficiency has changed state government
By Jack R. Furney, Jr.

More than a decade ago, Florida's economic outlook was bleak. The state government was forecasting a fiscal shortfall, couldn't balance its budget, and even shut down operations for a short period.

Adding to these challenges, Florida, with an economy largely based on tourism, was hit hard by the national economic downturn in the early 1990s. Add to that the most expensive natural disaster in U.S. history, at the time, Hurricane Andrew, which struck southern Florida in August, 1992. All of these served as a wake up call that resulted in a management change by Florida's voters.

In 1998, Jeb Bush was elected as Florida's 43rd governor. Gov. Bush brought a vision to make Florida fiscally solvent while pursuing an aggressive agenda to decrease the size of government, lower taxes and eliminate wasteful spending. Voters liked his approach and made Bush the first Republican governor in Florida history to win re-election. Bush's goals and philosophy are simple yet powerful—embrace and utilize the power of the free market and competition to deliver high quality services to taxpayers while holding the line on spending.

Implementation required forward thinking and "outside the box" tools though. In order to achieve a "smaller, more efficient government," Bush actively sought the private sector. Being a businessman he understood that the private sector could perform many functions, especially non-essential, non-critical ones "better, cheaper and faster" than government. Further, Bush knew that a competitive market rather than a big-government monopoly would be beneficial to Florida taxpayers.

Since 1999, the Bush administration has implemented many initiatives to make Florida both a better place to live and to do business in. Such projects include streamlining law enforcement communications, revamping Medicaid 3rd Party Liability recovery services, and privatizing toll collections. In total, his administration has conducted more than 100 managed competition initiatives that have saved taxpayers more than $550 million. Further, these initiatives have helped Florida to shed almost $20 billion in taxes.

Florida has weathered the storms and recession under Bush's leadership. Today, Florida's government enjoys a rainy day fund with more than $6.5 billion in it. Its government has been transformed into a more efficient and accountable operation to taxpayers. Further, spending on core programs like education, public safety, health care and protecting the environment has increased. All of this being done without a state income tax and without raising other taxes…in fact, lowering them.

Recently some of Florida's many outsourcing successes have been overshadowed by the high-powered media spotlight on the few projects that experienced difficulties. After learning from those mistakes, today Florida is doing a better job. Rather than abandoning the goal of a "smaller, more efficient government," Gov. Bush took measures to make Florida's competition efforts better, and well, more efficient. He issued an executive order in March 2004 that created the "Center for Efficient Government" to "promote fair and transparent best business practices in government in order to foster accountability, competition, efficiency and innovation in the way state agencies deliver services to Florida's citizens."

Bush has since issued a subsequent executive order to assist agencies in the development of a reemployment and retraining assistance plan for employees not retained by the agency or employed by the contractor. Recently these concepts were codified into law securing Bush's legacy and impact for future administrations.

The new law establishes a standardized method for procuring and managing contracts that will result in more accountability, visibility and competition. Doing so has increased the public's confidence and has mitigated perceptions of impropriety. Injecting competition allows the state to realize the best value and wisely spend taxpayer dollars. There's no doubt, government contracts are big business opportunities for the private sector. The bottom line is that government is capitalizing on these opportunities by providing the taxpayer with the best bang for the buck.

By implementing properly managed competition initiatives, Florida has benefited in terms of dollars saved, efficiencies gained and improvement of services to citizens. Even with some mixed results, the state has saved more than half a billion dollars while reducing more than 6,500 positions, not to mention the $20 billion in tax avoidance. The savings generated from Florida's competition initiatives have enabled tax dollars to be redirected into mission-critical, core citizen services that help families, children, the environment and the elderly.

During his tenure, Jeb Bush has brought fiscal solvency to the state, reduced taxes, and eliminated wasteful, non-essential government functions by continually challenging state entities to identify and focus on their core functions. He has made Florida's government smaller and more efficient by embracing competition and the free market.

Florida's residents and taxpayers should not only commend Bush's efforts, but give him a pat on the back when he leaves the capitol building in January 2007. Florida should hope that his successor uses the tools Bush has left behind, embraces competition and continues to take Florida down the path of economic viability and vitality.

Jack Furney is a policy analyst at Reason Foundation and previously served as Chief of Policy and Budget in the Center for Efficient Government under Gov. Jeb Bush. An archive of Furney's work is here and Reason Foundation's government reform research and commentary is here.