110           
HOUSE OF REPRESENTATIVES             H.C.R. NO.            
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
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                     HOUSE  CONCURRENT
                        RESOLUTION

  REQUESTING THE LEGISLATIVE REFERENCE BUREAU TO STUDY THE
    OPERATIONS OF OTHER JURISDICTIONS THAT CARRY OUT ONGOING
    ANALYSES OF THE TRUE COST OF GOVERNMENT PROGRAMS AND
    FUNCTIONS.



 1        WHEREAS, it is a universal goal that governments and
 2   bureaucracies should operate efficiently and effectively; and
 3   
 4        WHEREAS, it is more debatable where the correct balance
 5   between efficiency and effectiveness should be struck; and
 6   
 7        WHEREAS, in economically trying times, it especially
 8   tempting to simply equate either efficiency or effectiveness,
 9   or both, with a reduction in the size of government; and
10   
11        WHEREAS, while it is true that reducing the size of
12   government would create immediate cost savings in terms of
13   general funds not expended, such a reduction would probably
14   incur longer-term and possibly much greater costs to the State
15   as a result of not addressing current needs that are met by
16   programs that are cut; and
17   
18        WHEREAS, more importantly, a reduction in government
19   should be based not on whether a department needs to be funded
20   by general funds (where funding can be cut) or is relatively
21   self-supporting through the use of special funds, so that money
22   can be "saved" by providing a minimum of general funding to
23   those departments that are relatively self-supporting but,
24   instead, should be based on knowing the true costs of specific
25   government services provided; and
26   
27        WHEREAS, for example, it would make no sense and certainly
28   be wasteful if an entirely self-sufficient agency that receives
29   no general funds is allowed to continue operating replete with
30   waste, fraud, and abuse and generates services that are fully
31   paid for but that are exorbitantly expensive, while another
32   agency that is entirely dependent on general funds is cut,
33   precisely because it competes for scarce general funds, if it
34   operates both efficiently and effectively with a minimum of

 
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                                  H.C.R. NO.            
                                                        
                                                        


 1   waste, and no fraud or abuse, and provides services the
 2   expenditure for which reasonably approximates the true costs of
 3   those services; and
 4   
 5        WHEREAS, the measure of effectiveness is whether or not an
 6   intended service achieves its purpose while the measure of
 7   efficiency is how well that service achieves its purpose given
 8   the amount of resources expended in providing that service; and
 9   
10        WHEREAS, while effectiveness is ultimately rooted in
11   policy decisions that determine to what extent a service is to
12   be provided to the public and is subject to the will of the
13   people as expressed through the Legislature, efficiency is not
14   subject to political whim but is based on technical excellence
15   in the performance of a service that incorporates not only
16   subject-matter know-how but also fiscal and budgetary know-how;
17   and
18   
19        WHEREAS, for example, the effectiveness of road safety and
20   the serving the public good is ultimately determined by policy
21   in deciding whether to lay one hundred miles of highway across
22   a lava field to serve a greater number of people, or to lay
23   twenty miles of highway to serve a smaller number of people,
24   and whether to use higher-grade but long-lasting materials or
25   to use lower-grade materials that do not last as long, while
26   efficiency is determined, after the policy decision is made, by
27   doing the best possible job of laying the highway with the
28   resources allocated to the task; and
29   
30        WHEREAS, in order to truly save costs, it is necessary to
31   know the true cost of efficiently performing a government
32   service, regardless of whether that service is provided by a
33   government department that operates on general or special
34   funds; and
35   
36        WHEREAS, knowing the true cost of services also provides a
37   more reasonable basis for evaluating possible mergers or
38   elimination of government agencies as long as policymakers
39   first decide which services to retain, regardless of which
40   department delivers it or how that department is funded; and
41   
42        WHEREAS, knowing the true cost of services would provide
43   departments with a sound basis for budgeting, and thus for the
44   Legislature to make better-informed policy decisions; and
45   

 
 
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 1        WHEREAS, if the Legislature and the private sector are
 2   serious about privatizing certain government functions, knowing
 3   the true cost of government services to be replaced is
 4   mandatory.  Without knowing this, government, on the one hand,
 5   cannot know whether privatization is cost-effective and, on the
 6   other hand, private sector businesses would not want to take
 7   over those functions if it turned out they were too costly; and
 8   
 9        WHEREAS, this cost data do not exist; and
10   
11        WHEREAS, this cost data can serve as the foundation for
12   several other meaningful government objectives such as
13   performance measurement or benchmarking and fiscal and
14   programmatic accountability that are much discussed but which
15   are essentially unachievable without this data; and
16   
17        WHEREAS, it is in the interest of the people of Hawaii,
18   for the variety of reasons described above, to obtain true cost
19   of service data for services provided by state government; now,
20   therefore,
21   
22        BE IT RESOLVED by the House of Representatives of the
23   Twentieth Legislature of the State of Hawaii, Regular Session
24   of 1999, the Senate concurring, that the Legislative Reference
25   Bureau is requested to study programs or operations in other
26   jurisdictions that carry out ongoing analyses of the true cost
27   of government programs and functions; and
28   
29        BE IT FURTHER RESOLVED that the Legislative Reference
30   Bureau is requested to report findings and recommendations for
31   establishing such a program in Hawaii, including any necessary
32   proposed legislation, no later than twenty days prior to the
33   convening of the Regular Session of 2000; and
34   
35        BE IT FURTHER RESOLVED that a certified copy of this
36   Concurrent Resolution be transmitted to the Acting Director of
37   the Legislative Reference Bureau.
38   
39   
40   
41                         OFFERED BY:  ____________________________