Panel pushes Arizona Lottery privitization, other state government changes - East Valley Tribune: Arizona

Panel pushes Arizona Lottery privitization, other state government changes

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Posted: Thursday, July 21, 2011 5:58 pm | Updated: 4:09 pm, Fri Jul 22, 2011.

Arizona should have a private firm run the lottery, make it easier to fire public workers and even changing how the state funds public schools, a special commission recommended Thursday to the governor.

The panel also is proposing major changes in pensions for new state workers, changes far beyond what lawmakers approved earlier this year.

But that recommendation likely will die on the desk of Gov. Jan Brewer, who formed the commission last year. Press aide Matthew Benson said Brewer wants to see how this year’s changes work before making the kind of radical revision suggested.

Everything else, though, apparently remains in play, at least for the time being.

“She just received it,’’ Benson said. “The governor will be reviewing this report in the weeks ahead and looking to see what aspects of these proposals can be implemented.’’

The commission is an outgrowth of the $3 billion deficit Brewer inherited when she became governor in early 2009 after Janet Napolitano quit to become homeland security secretary in the Obama administration. Brewer proposed a combination of tax hikes, spending cuts and borrowing to bridge the gap.

But she also set up the commission to see if there were ways, over the longer term, to deliver government services at a lower cost.

An initial report last year already has had some results.

One of the recommendations was to consider privatizing state parks. While that did not gain traction amid some public outcry, the Parks Board has since requested proposals from private companies to manage some of the concession operations.

The panel consisted of some state agency directors, elected officials and business interest. State Gaming Director Mark Brnovich, chosen by Brewer to head the panel, said the goal was to give Brewer a list of things that realistically could be implemented.

“But ultimately it is up to the governor to decide what to move forward on and what she doesn’t want to move forward on,’’ he said.

One recommendation would “reform’’ the system of merit protections that exist for about 80 percent of the approximately 33,000 state workers.

These rules govern procedures for hiring, probationary periods, compensation, discipline and firing. But commission members say they make it difficult and expensive to get rid of bad workers.

The plan also would give supervisors more say over salary decisions rather than having these restricted by pay scales.

Another recommendation would farm out to private companies the process of issuing permits to let companies discharge pollutants into the air and water.

The report says that due to downsizing, many workers at the Department of Environmental Quality lack expertise in reviewing and issuing the permits. And because it is impossible to determine how many requests will come in at any given time, it forces the agency to either have staff available for any rush or delay issuing the needed permits.

That proposal is likely to meet opposition from environmental groups amid questions of whether permits requests reviewed by private firms will get the same scrutiny as those processed by state employees who are accountable to the public.

Commission members also proposed that the Department of Insurance become self-funded, keeping the fees and fines it generates. But the report cautions the possible downside is this could lead to “excessively zealous rule enforcement and perhaps even outright abuse’’ since the more fines that are issued, the more money the agency would have.

One of the more interesting changes would have the state provide funds for education not to the school districts but to the individual schools that youngsters attend.

The report says the current system results in one school getting “vastly different real dollar amounts’’ than another school in the same district of about the same size.

“School districts allocate staff to school buildings based on student formulas rather than allowing principals’ autonomy to spend school dollars to meet the needs of their individual students,’’ the report says. Under the proposal, principals would decide how to spend the cash -- and how many staffers to hire -- rather than having those decisions made by district administrators.

The money-saving aspect, according to the report, would be that school districts would not need large central offices to handle the finances.

The proposal on pension reform would scrap the current “defined benefit’’ system where the state and workers contribute to retirement funds, with workers guaranteed a certain amount of money based on their years of service.

That system has driven up state costs sharply in recent years. Part of that deals with the number of retirees and part of that is because the stock market’s condition means the pension funds do not make as much as they used to on invested funds.

The report proposes a “defined contribution’’ plan, with both the state and workers putting aside a specific amount of money each paycheck, and the workers deciding how to invest it. What they ultimately get in benefits could vary depending on how well they make those decisions.

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