1 Unnatural Acts: Managing for Results… Even If No One Cares Indiana Governor Mitch Daniels October 12, 2007

2 Major Initiatives  Balanced Budget  Funded Infrastructure Shortfall Major Moves Major Moves  Indiana’s Economic Revitalization  Hoosier Homegrown Energy  Telecommunications Deregulation  Health Coverage for the Uninsured

3 Controlling Annual Expenditure Growth Fiscal Year

4 From Deficits…

5 …to Surpluses

6 Growing Cash Surplus (Cash Balance – Liabilities)

7 Major Moves: Fully funded, 10-year transportation infrastructure plan

8 Indiana’s Economic Revitalization  Indiana ranks #1 in foreign direct investment  Personal earnings outpaced the nation the past 2 quarters  Unemployment lowest in region and down full point since 2005

9 Unemployment – Nation (July 2007)

10 Indiana Biofuel: 2005

11 Indiana Biofuel: 2007

12 Telecommunications Deregulation  One-step, statewide franchising  Expanded broadband access to 102 new rural communities InvestmentNew Jobs AT&T$250 million1,500 AT&T$250 million1,500 Verizon$100 million300 Verizon$100 million300 Comcast225 Comcast225 Embarq$18 million Embarq$18 million Small telcos$65 million Small telcos$65 million Total$433 million2,025

13 Health Coverage for the Uninsured  Market-based program that will cover 130,000 of Indiana’s chronically uninsured  Not an entitlement  No employer mandates  Individual accounts and preventive care  Dedicated funding from cigarette tax

14 Managing for Results  Centralization  Competitive Sourcing  Everyday Management

15 Centralization  IT Consolidation  Procurement One Indiana One Indiana Buy Indiana Buy Indiana  Asset Management

16 IT Consolidation  Savings of $14 million annually IT operations staffing reduced from 360 statewide to 190 within new Office of Technology IT operations staffing reduced from 360 statewide to 190 within new Office of Technology

17 One Indiana  Estimated annual savings exceed $50 million with total savings projected to exceed $200 million to state and local governments BeforeAfter Hearing Aids$1,800$900 Hearing Aids$1,800$900 Desktop PC’s$977$690 Desktop PC’s$977$690 Public Safety Radios$3,828$2,250 Public Safety Radios$3,828$2,250 Cell Phones (per mo.)$52$32 Cell Phones (per mo.)$52$32 AA Batteries$1.61$0.89 AA Batteries$1.61$0.89 Staplers$6.02$0.96 Staplers$6.02$0.96

18 Buy Indiana

19 Asset Management  Vehicles Identified and sold over 2,000 unneeded cars & trucks Identified and sold over 2,000 unneeded cars & trucks  Aircraft Reduced the state’s under-utilized aircraft fleet from 20 to 12 Reduced the state’s under-utilized aircraft fleet from 20 to 12  Leases for State Offices Saving 20% on new leases compared to previous rates Saving 20% on new leases compared to previous rates  Surplus Real Estate Sales to date: 33 properties, $6 million Sales to date: 33 properties, $6 million

20 Competitive Sourcing Savings Savings Prison Food Services$11 million / year Printing & Mailing$8 million / year Prison Management$3 million / year Janitorial Services$500,000 / year Welfare Administration$1 billion over 10 years

21 Competition Works Both Ways  Competitive Contracts Awarded to State Employees Logansport Hospital: Food Services Logansport Hospital: Food Services Department of Correction: Community Re-Entry Centers Department of Correction: Community Re-Entry Centers

22 Increased Employment in Critical Areas  Child Welfare Caseworkers Goal to reduce caseloads Goal to reduce caseloads  State Police  Excise Police

23 Everyday Management

24 Bureau of Motor Vehicles  Average visit time down from over 40 minutes to 10 minutes  Customer Satisfaction survey rating up from under 80% to 95%

25 BMV Website

26 Department of Child Services  Percentage of Current Child Support Collections

27 Public Employees Retirement Fund  Percent of Retirements without Payment Interruption (first check within 30 days)

28 Department of Revenue  Percentage of Personal Tax Refunds processed within 15 days

29 Department of Environmental Management  Total Water Permit Backlog (in Permit-Days)

30 Meth-Free Indiana Initiative  Drug Lab Seizures & Arrests

31 Traffic Safety  Increased enforcement has led to a decrease in traffic fatalities

32 Program Performance Evaluation  P.R.O.B.E. process – Program Results: Outcome-Based Evaluation OMB evaluated 420 government programs OMB evaluated 420 government programs Made more than 200 recommendations on how government could improve performance Made more than 200 recommendations on how government could improve performance

33 Pay-for-Performance  Annual Salary Adjustments

34 What We’ve Learned  Progress starts with data What gets measured, gets done What gets measured, gets done  Set the bar high  Align incentives Reward employees financially for their performance Reward employees financially for their performance Recognition by leadership, and make it visible to other state employees Recognition by leadership, and make it visible to other state employees  Move fast Ask for forgiveness, not permission Ask for forgiveness, not permission