Legislation to encourage innovation, cost savings heads to full House

From 2013-18 a Minnesota rewards program encouraged state agency innovation and cost savings.

Rep. Duane Quam (R-Byron) wants to reinstate the State Agency Value Initiative, this time with better results.

Via the Quam-sponsored HF289 state agencies could carry forward to the following biennium 50% of their unspent operating appropriations if the savings are attributable to unanticipated innovation, efficiencies, or creative cost-savings. With approval from the Legislative Advisory Commission and Minnesota Management and Budget, the dollars could then be used by the agency to fund specific proposals or projects that “directly support the agency’s mission.”

A peer review panel, comprised of agency managers and employees credited for the cost-saving initiatives, would determine where the savings would be spent.

The other 50% would go to the General Fund.

As amended to update a date, the bill was approved Thursday by the House State Government Finance and Policy Committee via voice vote and sent to the House Floor.

“It’s timely to energize our state employees to be able to feel as if they have a voice and have their eyes open and be involved instead of going through the motions and maybe things are missed,” Quam said. “I don’t think we’ll have as much show up in an audit report if we have the engagement of employees who see that we trust them, we believe in their capabilities, and they are heard.”

When the program first existed, participation was next to nil.

According to a fiscal note, Minnesota Management and Budget received just one $75,000 request.

“We’ve got larger budgets, we’re spending tens of billions of dollars more … so I think there’s more opportunity,” Quam said.

He noted, too, that agencies can use the Information and Telecommunications Account — aka “Odyssey Funds” — to carry forward funds to the next biennium without the 50% cap.

Members on both sides of the aisle expressed support for the concept and lifting up state employees. But concerns were raised, including employees intentionally seeking savings with the idea of getting something they really want that has not been funded.

And Rep. Ginny Klevorn (DFL-Plymouth) shared an unease about the timeline to receive the benefit. Per the bill, if the Legislative Advisory Commission does not make a decision within a 30-day period it is considered a negative recommendation and would be an automatic denial.