Already adopted by city governments across the country, this long-awaited paperback edition puts David Osborne and Peter Hutchinson's renowned guide into the hands of all state and local governments facing fiscal crisis. In a time when cities, counties, and school districts are laying off policemen and teachers, closing schools, and cutting services, government leaders are increasingly desperate for solutions. The Price of Government is a clear, step-by-step roadmap for change, offering concrete strategies drawn from the authors' combined thirty years of experience leading and advising public institutions. Their ideas offer a new way to look at government spending-and a new way to think about how government should work.

"David Osborne has been preaching the reinvention of government since the mid-1980s, peddling practical, road-tested ideas for delivering value for the tax dollar. Now, with Peter Hutchinson, a former state finance commissioner, he's done it again with The Price of Government." (Washington Post)

The authors are consultants-which could be considered good news or bad news. In this case, it's good news. They are founder and senior partner of Public Strategies Group, a firm specializing in the field of improving government. Osborne is author of the best-seller, "Reinventing Government." These authors have the credentials that cry out how valuable their book might be.

The five sections of the book organize their huge volume of information, commentary, and advice: Smarter Budgeting, Smarter Sizing, Smarter Spending, Smarter Management, and Smarter Leadership. Through fifteen chapters the authors describe what's been happening, the impact, what changes could-or should-be made, and what benefits will result. There are no illustrations in this book-a few charts; it's straight text in page after intriguing page. Tremendous content that can be absorbed in a straight-through read or studied in a reference book fashion.

Community leaders will find an incredible amount of material to work with in these pages. The question is how many communities will have sufficiently strong and committed leadership-political and apolitical-to overcome the resistance of tradition and self-serving turf protection in order to bring about critically needed change. If you can build the community resources to make the needed improvements, this book will be a real treasure for exploring opportunities and finding wise solutions.


Should be mandatory reading for government decision-makers   September 7, 2004
 9 out of 12 found this review helpful

The authors of this book clearly describe the current atmosphere of permanent fiscal crisis at every level of government. They describe certain trends that are scary, such as the ever-growing cost of healthcare/Medicare.

Then they lay out a practical approach that is different from the normal budgeting process. What's great is that they speak as practitioners, having done actual consulting and having seen the fruits of this approach. This is very different from the ultimately empty rhetoric of most books on "fixing government" which might sound great but are usually completely theoretical, since the books are usually written with a "this ought to work" mindset, as opposed to "this is what has worked."


Interesting concept- Too bad it does not work   October 9, 2005
 8 out of 10 found this review helpful

I enjoyed reading this book even though it is very very repetitive. I thought the book contained some great data on the price of government. It also had good analysis and explanations on why the price of government varies between states. The analysis on why government is in the fix it is quite good. The book is weak on the solution part. Their concept has never been successfully implemented. Those with budgeting experience will understand why once they read the book. For managers on a local level the book does really appreciate the effect state and federal mandates have on government operations.

The book was successful in provoking some thought about basic budgeting assumptions. The book is a worthwhile read provided you don't expect it to offer a workable process to solve budget problems.


Sounds Good, but Won't Work!   December 12, 2005
 5 out of 9 found this review helpful

The timing for this book couldn't be better - an era of skyrocketing deficits, an aging population (boosting pension outlays), inexorable increases in healthcare costs (fewer workers with health insurance, aging population), and businesses increasingly threatening to move elsewhere unless they receive tax relief.

Simply cutting budgets accomplishes little - as Osborne points out, it does nothing to improve areas retained. In addition, service recipients or proponents (usually providers) simply complain ad naseum until an opportunity to restore funding occurs (eg. tax increase or economic upturn) presents itself - thus setting the stage for the next crisis.

Osborne is also correct in pointing out that the most common budget "cures" are simply illusions - accounting gimmicks (timing "games" regarding outlays and receipts, fudging estimates, temporarily ignoring voter mandates), borrowing, and delaying maintenance.

At this point, however, Osborne goes off the track by proposing some intelligent-sounding changes in approach (eg. identify the results wanted), and proceeds to go through a lot of razzle-dazzle that simply ends up with "business as usual."

Using Washington state as an example, Osborne cites how a citizens group decided to focus on providing more early-childhood-education and implementing skill-based pay for teachers - neither a "REAL" result. During the last 30+ years innumerable education "improvement" programs have been funded, while progress has been non-existent - eg. scores by 17-year-olds on the National Assessment of Education Progress (the only unchanged large-scale test in the nation) have remained unchanged, as have drop-out rates. This, despite a more than doubling of inflation-adjusted per-pupil spending in the last 30 or so years. As for "skill-based" teacher pay, study after study has found that - after taking into account pupil differences - payment for EXISTING "skill-set" programs (teacher experience or degree levels) contribute little (only the first few years of experience) or nothing to pupil achievement. So why add another dubious dimension? If one needs any more evidence, consider the fact that most private schools only cost about half that of public schools.

Universities are another major State-level expenditure; like K-12 education, MAJOR overhaul (not rethinking budgets)is required. Since the early 1990's, professors' teaching workloads have been reduced from three classes per semester to two. Nationally, and undoubtedly in Washington also, the length of the academic year shrunk from 191 days in 1964 to only 156 in 1993. Meanwhile, only 21 cents of every funding dollar goes into the classroom - the number of non-teaching professionals (eg. counselors) has increased from 3 per instructor in 1976 to 6 in 2001. Returning to those recent productivity levels, substantially reducing admissions of the roughly half unable or unmotivated to graduate, and shortening the average 5+ years required to graduate would allow savings of about $500+ million/year in Arizona and it is assumed that similar opportunities exist in Washington.

As for healthcare, Osborne's Washington process suggested dropping coverage for low-income workers - an ACCOUNTING GIMMICK that simply transfers the costs to providers, and adding more clinics. However, what is really required is a review of incentives and other care drivers - eg. the highest-spending areas in the U.S. spend about 60% more on Medicare recipients than the lowest, despite access to care and patient outcomes being better in the low-income areas. A second problem is that healthcare providers are REWARDED for their errors - payors need to insist on adherence to quality standards. A third major problem is that care recipients have no incentives to conserve - Health Savings Accounts (allowing cashing out of any funds remaining from a set amount) do so.

Clearly Osborne's work would be more useful if it focused on outcomes - both good and bad. Associated with that should also be a discussion of benchmarking (staffing levels, compensation for staff, and benefit levels), and continuous improvement goal-setting that emphasize reducing waste and improving quality "Toyota-style" - keys to success in the private sector.

The "bottom-line" is that the focus should not be on the budget process, but on permanent reform of the biggest consumers of government funds - education and healthcare.