Wow, the man doesn’t learn, does he?

Gov. John Baldacci is doing it again, this time with the three natural resource agencies: Inland Fisheries and Wildlife, Marine Resource, and Agriculture, Conservation and Forestry. Just as he did with school consolidation, he is ordering agencies to merge in an unrealistically short time frame and booking as yet non-existent savings before they even have a plan.

It didn’t work for the schools, and it won’t work for the natural resource agencies. Here’s what is happening:

In the latest supplemental budget, the governor has proposed a task force to find a way to merge the three agencies and save $1.25 million by 2011. If they don’t come up with a plan to merge and achieve that savings target, he will go ahead and cut their combined budgets by that amount anyway.

I favor merging the three agencies and achieving structural savings over the next few years, but the governor is showing tremendously flawed thinking or getting bad advice (or both) if he thinks that three agencies can be merged and produce more than a million dollars in savings almost immediately. It shows he has no grasp of organizational management and the nuts-and-bolts required to achieve real — not phantom — cost-savings.

These are the same bad planning and hollow promises that he gave us with school consolidation. He ordered schools to consolidate and achieve $37 million in savings. He booked the savings immediately and declared himself a hero, before anyone even had a concrete proposal on the table. His implication was that if the school districts can’t generate the savings, then they are either stupid, insubordinate, or both.

Here’s why it won’t work:

What Baldacci doesn’t understand is that almost all mergers cost money in the short run before they can save any money in the long run. For example, when corporations merge, they take a one- time charge against earnings (often in the millions) to cover the cost of the merger — new computer systems, disruption of services, human resource overhead, buying out some employees or paying out retirement to others, consolidating real estate, purchasing new signs and printed materials, etc. Mergers are usually seen as an investment of time and dollars in hopes of a payoff from efficiency, synergy, or new market share down the road.

But, in fact, most mergers fail to meet those objectives. The business literature shows that only one in three corporate mergers ever achieves the expected efficiencies or synergies. Merging organizations is hard work; people have to be re-trained to do new jobs or understand new services or customers. It often creates turmoil, ill feelings, rivalries, inefficiencies, glitches — all things that cost money and create problems that erode the efficiencies expected. Unless there is a careful plan, we could see some real problems from a merger of these agencies.

Many school districts are trying valiantly to merge and find the magic savings Baldacci demands. But many have learned that consolidating will cost more in the short term. Savings might ultimately be possible after several years, but meanwhile the higher costs are passed on to the towns and ultimately, taxpayers, along with much of the turmoil and ill-feelings.

Faced with the choice from the governor, my advice to the natural resource agencies is to take the cuts straight up with their existing organizations. Taking the cuts and merging at the same time will cost far more.

I repeat. I favor merging the agencies, but not under the preposterous time and cost constraints Baldacci is demanding. He has proven that he has no idea how to implement his mandates. It’s easier to simply order it done and leave other people to do the impossible, while he pats himself on the back for being the guy who made the cuts.

His term won’t end soon enough for me.

Rep. David Van Wie (D-New Gloucester) represents District 105: Durham, New Gloucester and part of Lisbon.


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