March 28, 2011

The Honorable Mike Parry

75 Rev. Dr. Martin Luther King Jr. Blvd.
Capitol Building, Room 309
Saint Paul, MN 55155-1606

Dear Senator Parry:

I am writing to express strong concerns related to the provisions contained in the proposed State
Government Finance omnibus bill. While the Department of Administration (Admin) supports and
implements innovation and reform, we believe it must be done responsibly. A great example is Enterprise
Lean, a process that originated in the private sector and is now coordinated by our agency to improve the
organizational performance and results in Minnesota government.

Before exploring the potential impact of this bill, it is important to note that Admin's general fund
appropriation has steadily declined. While there are various reasons for this, our agency is an example of
maintaining excellent service despite funding reductions. Through every situation, Admin practices fiscal
responsibility and stands ready to do our part in helping the state find lasting solutions to the projected
budget deficit for the state agencies and government entities that rely on us. In addition to making tough
decisions in order to reduce our own operating budget, agency staff take great pride in providing essential
government services that help ensure the success of state government.

The bill specifies a 15% reduction to our overall budget, which will result in layoffs and present substantial
challenges in our ability to serve our customers. It also calls on Minnesota Management and Budget
(MMB) to make additional reductions to executive branch agencies in excess of $475 million. This includes
over $186 million in cost reductions found through savings in strategic sourcing, building efficiency, fleet
management and tax fraud. The fiscal notes prepared by nonpartisan staff do not support the projected
savings or the additional revenue identified in this bill, and adequate information has not been available
about third party solutions to determine if cost reductions would result. Moreover, basing the state
government finance omnibus bill's savings on untested estimates from interested third parties is not a
credible or appropriate approach to solving the state's budget deficit.

Since reductions included in the current Senate Finance Omnibus Bill will likely go far beyond the 15%
agency specific reduction, its passage has the potential to eliminate or significantly reduce essential or
core services provided by Admin to state and local government and would negatively impact their
effectiveness. Many of these services provide economies of scale for other state agencies and are integral
to provisions in proposed legislation.
Office of the Commissioner
200 Administration Building, 50 Sherburne Avenue, Saint Paul, MN 55155
Phone: 651.201.2555 / Fax: 651.297.7909 / Minnesota Relay Service 1.800.627.3529

An Equal Opportunity Employer

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March 28, 2011

A few examples include:

• State Demographer – Reduction or elimination of the State’s liaison with the U.S. Census Bureau
resulting in the loss of irreplaceable expertise. This nonpartisan expertise assists with redistricting
as well as ensuring Minnesota provides complete and accurate data to the Census Bureau on an
ongoing (annual) basis as required by the American Community Survey. Many believe the outreach
this office provided resulted in Minnesota having the second highest census participation and
helped retain a Federal House Seat.
• Strategic Sourcing – Reduction or elimination of responsible, cost effective purchasing and
oversight for more than $2.1 billion annually in state procurement resulting in more costly state
and local government purchasing.
• Data Practices – Reduction or elimination of the State’s single point of expertise for data practices
and open meeting laws would eliminate technical assistance, training and resources and limit the
promotion of transparency in government. Affected customers include the public, state and local
government, the Legislature, media and the legal community.
• Minnesota Geospatial Office – Reduction or elimination of the coordinated development,
implementation, support and use of geospatial information would severely limit the state’s ability
to respond to disasters such as flooding and tornados. Agency staff are currently providing
statewide geospatial technical assistance in the State’s Emergency Operations Center.
• Real Estate and Construction Services – Reduction or elimination of a one-stop shop for state
government space needs, from construction management to facility management, will affect the
state’s assets resulting in building deterioration which will be more costly to repair and maintain.
• Council on Developmental Disabilities – Reduction or elimination of matching funds jeopardizing
over 1 million dollars in federal funds impacting thousands of individuals with developmental
disabilities, their families and the support professionals who receive information, education and
training.

If this bill becomes law, resources would not be available to provide core services resulting in increased
costs to state agencies and local government. The loss or reduction of these services will result in an
inefficient and less effective state government for years to come.

Admin looks forward to working with the Senate to find ways to responsibly fund our core government
operations so that we can continue to work together to make government more innovative and effective
while ensuring essential and cost effective state services.

Sincerely,

Spencer Cronk, Commissioner

Department of Administration

c: Governor Mark Dayton

Senator Amy Koch
Senator Thomas M. Bakk
Senator Claire A. Robling
Senator Richard J. Cohen
Senator Charles W. Wiger