DLC | Model Initiatives | June 30, 2008
Charter Agencies

New Dem Play | Enhancing government efficiency through flexibility and accountability
Where It's Working | Iowa
Players | State and local officials

More Budget Plays

The common stereotype of slow, ineffective government bureaucracies is so ingrained in the American psyche that it is a part of our common narrative. While the slow-motion stereotype is certainly not the case for all public agencies, there is no question that government entities are in need of constant reform and reinvention. Governments need to rid themselves of the unnecessary and duplicative rules, regulations, and protocols that make them less effective and drain the ingenuity and energy out of hard-working public employees. Managers complain that they lack the authority to actually manage and ground level workers must wade through a maze of regulations to solve a simple problem. These hurdles have caused many citizens to lose faith in our government systems.

To end status quo governing and better serve the citizens of Iowa, state legislators -- led by former Gov. Tom Vilsack, developed a "new bureaucracy-busting deal" called charter agencies that affords participating departments the freedom to innovate and deliver timely results. In exchange for greater flexibility, charter agencies must commit to producing measurable benefits and creating cost savings for the entire state. Specifically, the charter agencies must pledge to collectively save $15 million each year.

The gained flexibility allows these agencies to bypass many bureaucratic procedures and rules, retain proceeds from cost saving techniques, and receive exemptions from employee caps and across-the-board budget cuts.

Since 2002, six (the maximum number allowed by the Iowa law) Iowa departments have volunteered to participate in the charter agencies and accept the call for greater accountability and savings for the freedom to make better decisions. Despite critics' fears of waste, fraud, and abuse, Iowa's charter agencies have produced promising results. For example:

  • The Department of Human Services implemented the Preferred Drug List for Medicaid and saved the state $1.7 million in 2005. They also increased the number of children with health insurance by 33 percent;

  • The Department of Natural Resources reduced the amount of time it takes to obtain air quality, wastewater construction, and landfill permits without sacrificing any environmental standards or quality; and

  • The Department of Revenue increased the number of income tax returns filed electronically from 55 percent to 67 percent. They also improved the number of income tax refunds issued within 45 days from 75 percent to 94 percent.

    When a Department of Corrections vehicle crashed into a deer, leaving the car totaled, they were able to get a new car in less than a week. Previously, it would have taken 15 months to get a replacement car. Due to the Department of Correction's charter agency status, they were able to cut through the red tape and replace the car quickly without extra costs.

    Other departments such as the Alcoholic Revenue Division and the Veterans Homes made similar gains. In FY04 the charter agencies collectively saved the state more than $22 million, exceeding their $15 million agreement. The momentum of these charter agencies makes way for more creative thinking, improved morale, and greater energy among agency staff. Charter Agencies give Iowa state employees the stamina and ability to better serve the state and save money simultaneously.

    Resources For Action

    Iowa Charter Agencies
    http://charter.iowa.gov/

    Additional Reading

    Iowa's Charter Agencies Win Prestigious Innovations In American Government Award
    www.psg.us/resources/newscharteragencywins.html

    A Reinventive Relationship in Iowa
    www.psg.us/customers/iowacustomerstate.html?top=1736
    &mid=2218&siteObjectID=3709

    Contacts

    Jim Chrisinger
    Team Leader, Accountability and Results
    Iowa Department of Management
    Capitol, Room 12
    Des Moines, IA 50319
    (515) 218-6537
    (515) 242-5897 (fax)
    Jim.Chrisinger@iowa.gov

    Katie McMinn
    Policy Analyst
    Democratic Leadership Council
    600 Pennsylvania Avenue, SE, Suite 400
    Washington, DC 20003
    (202) 546-0007
    (202) 544-5002 (fax)
    kmcminn@dlc.org