The 29th Public Square: Discussing Government Reform with Bob McDonnell

•On Monday night,

The Times-Dispatch held its 29th Public Square at our downtown offices. The featured guest was Gov. Bob McDonnell, who outlined his plans for reforming state government. It was the governor's first public appearance to specifically discuss his goals for the Commission on Government Reform and Restructuring, whose members he announced the previous Friday. McDonnell answered questions and took suggestions from a large, civil, and deeply engaged crowd. Our publisher, Tom Silvestri, moderated. Below is an edited transcript of the conversation. To watch the entire event online click here.

Tom Silvestri, publisher: Governor, last week you appointed a 31-member commission on reform. What's the overview on your intent, and how are you trying to use that to make government more efficient and effective?

Gov. Bob McDonnell: Thanks, Tom, first of all, for hosting this town hall. And for all of you, for taking time on an evening away from your families to come here and invest in good government, and to have a dialogue with me and some of my team at the Governor's Office about how we can make this government of yours work better, more effectively, and more efficiently . . . .It's a terrific privilege to be your governor . . . .It's also an enormously difficult time for governors all over the country. I've met many of them at the National Governors Association, talked to many of them on the phone. And many of them are going through the same things we are as they manage, in an extraordinarily difficult economy. Perhaps the most difficult economy in 80 years or so, since the Great Depression. Everyone's -- except for a couple states -- facing major budget shortfalls. This year, we balanced the budget without raising taxes, with a $4 billion budget deficit. And I think that was an extraordinary bipartisan accomplishment -- that we were able to get that done with only one day of overtime in the session.

We've had about three meltdowns in the last 10 years, where other governors have had to go into lengthy overtime just to get an agreement. This year, we were able to work those issues out . . . .Between Gov. Kaine and I, we've cut about $10 billion out of Virginia's budget. And as I campaigned last year, and started taking the helm of being the governor this year, so many people said, "Look, it's a tough economy. We're making a lot of sacrifices in our personal life. We're limiting our discretionary income. Our businesses are deferring investment, or deferring investment, and laying people off." So in business and personal lives, people are having to make changes. And government needs to do the same. I talked about that both during the campaign, and as governor.

Even though I signed this Executive Order No. 2 on day one of my tenure as governor -- on Jan. 16 -- we just appointed the commission a couple of weeks ago, and we'll get started here in the next few weeks. I believe the first week in June will be the first meeting. And so what this is all about is this: Whether you're in the military, or you're in a small business or a large business, or whatever your profession is, from time to time, an organization needs to look at ways to renew itself. To ask itself the tough questions about, "How can we do things better? How can we be more efficient? How can we serve our clients or customers better?"

I've got 7.8 million clients. That's you: the voters, the residents of the great Commonwealth of Virginia. And you've entrusted me with helping to manage this state for four years. You've also entrusted me with about $75 billion of your money that we spend every two years. And you're telling me, in very clear terms, you want to see the best bang for your buck. You want to see your dollars stretch farther. You want to see government work efficiently. You're tired of excuses. You're tired of seeing inefficiencies. You're having to make the adjustments in your personal life and your business, and you want to see government work the same. So, that, Tom, really is the genesis of this . . . .

It's very much bipartisan. We've got pretty much an equal number of Republican and Democratic legislators [on the commission]. I've got people that have been chief of staff for Democratic governors. My chief of staff will be helping to support the effort. And then I've got a lot of top leaders from the private sector. People that have been successful CEOs. People that are successful change agents, and in what they do for a living.

We want to go through various aspects of government and answer the question, "How can we make it serve you better? How can we do this service for less money? How can we use privatization, innovation, consolidation, technology, thinking outside the box, to deliver services to you better?" Now, a lot of governors have taken this up. Gov. Allen did something similar to this in '94, with the Blue Ribbon Strike Force. Gov. Warner had the Wilder Commission back in 2002. They did some things that contributed to government reform and renewal. Some of those things got implemented, some didn't. So, the starting point for us will be looking at those old reports, finding out what we can use.

I've outlined a couple things already during the campaign, and during these first couple months as governor, that I'm already going to pursue, before we even start. One, I believe we ought to privatize our ABC -- our Alcoholic Beverage Control system. Thirty-two other states do it. We do it with beer and wine. We don't need to have government in the alcohol distribution business. I believe -- and Gov. Wilder's estimated -- there's hundreds of millions of dollars in licensing fees and ongoing revenue sharing that we can get from a privatization that we can put into transportation. That's part of the plan.

We want to find agencies that we can consolidate. Right now, we've got 156 agencies. We've got 103,000 state employees full-time. We've got another 16 or so thousand part-time. We've got multiple boards and commissions, 200-plus. The question is, do we need them all? Do they work well? Do they overlap? Do they cost us money that we don't have to spend? Are there better metrics we could put in place to measure what kind of value you're getting? You're the shareholders of Virginia government. I want to be able to help to measure for you, with that $75 billion you give us every year, how much are we getting in value to you? Are there better ways to deliver technology services, or transportation services, with the private sector that could perhaps add more value with less risk.

Those are the types of things that we're going to be looking at. I would like to get to the point. If we've got enough meritorious ideas in the next three, four months, my intent would be to call a special session, to do the privatization of ABC. The basic consolidations. And some of the other things that I think will be maybe easier to do in the short run, to plough those savings back into transportation, or the general operating budget. And this commission will stay in place for several years. There are some things that are easy to do, that are tactical. There are a number of other things that we want to be able to do, that are more strategic. That will take a longer time to put together -- but also will take a longer time for me to convince the General Assembly to vote for, and I might have to take through next session or the following session to get some of these changes.

But I know this: An organization that doesn't question itself as to how well it's doing, doesn't constantly look for ways to reinvent itself to deliver better customer service, that isn't focused on the customer -- I mean, we're a monopoly; let's face it, there are a lot of things you can only get from the government -- but I tell my people all the time, I don't want you acting like you're a monopoly. I want you acting like you're there to serve the customer, like you're trying to earn the clients. And let's approach government with that perspective, so that we can serve the citizens better. I think that's what you need out of government. That's why we're here tonight.

I'd like to hear from you about things that you see that don't make sense in government, that are a nuisance. Whether it's the DMVs aren't open on Saturday, or we don't have a one-stop shop for all these different government services, or whatever. From what you have seen in your own encounters with government, what do you think we can do better?

Silvestri: Do you see success as a gradual or a revolutionary approach? You mentioned the commission being around for a long period of time. How are you going to measure success on this reform? Because, quite frankly, there have been skeptics who say reforms come and go.

McDonnell: I'd say incremental progress and marginal changes would be unacceptable. I'd say big ideas and big thinking and big changes would be what I'd expect. Now, we're still warming up a work plan, with meetings over the next three to six months. We want to start with big ideas, like this privatization of ABC, and some other major consolidations of agencies. But I look for really big ideas to be the norm. I didn't run for governor just to nip around the edges a little bit. I really want to see some bigger, systematic changes. The companies that are most successful in the private sector are ones that talk about total quality management. That are constantly looking for the new technologies to come in, to make their companies work more efficiently. That are looking for ways to build that better mousetrap. That are not accepting of the status quo. They don't just want their employees to come to work every day thinking it's a job, but want to have enthusiasm. Want to have it as a mission. Want to be excited about coming to serve the 7.8 million Virginians. That's what I want to see out of state government. So, I'm looking for big ideas.

We've got a lot of very talented people, Tom, that have been asked to serve. We're going to have a lot of opportunity, like tonight, for people to come and testify. So, we're looking for the big ideas. We've looked at some things that [Gov.] Bobby Jindal has done in Louisiana, that [Gov.] Haley Barbour's done in Mississippi, that other governors have done -- Mitch Daniels in Indiana -- where they've got some fairly significant, thinking-outside-the-box approaches to transportation, health care. And so we're trying to look at those best and brightest ideas, find out how we can bring those into Virginia. I can give you, over the next couple of months, perhaps better yardsticks and barometers. But small changes aren't acceptable. We want to really find ways -- even though I think we've got a very good and decent and open and honest government that is rated fairly effectively by most magazines -- I say we can do a lot better.

Silvestri: All right. Well, we'll go over to the microphones . . . .

Mary McFarland: I'm proud to say that I am a personal care attendant. And I, along with help from Tina Brown and Gwen McFarland, care for my daughter, Amy. And with the consumer-directed personal care program, Amy is able to work 25 to 30 hours a week, and she contributes as a taxpaying citizen to our wonderful state. She also has been able to give back to the community by volunteering for many years in such wonderful programs such as the Red Cross 9/11 fundraisers. Every year, she volunteers with the Salvation Army Angel Trees, blanket drives, food drives, etc., in our community . . . .

Without our personal care attendants, Gov. McDonnell, Amy would be sitting at home, once again isolated -- or in a nursing home, costing our state money instead of contributing back. And Gov. McDonnell, PCAs are a win-win situation for Virginia. Not only because we save our state approximately $1.1 billion yearly, versus nursing homes, but also because most older adults and people with disabilities do want to be in their own communities, surrounded by their loved ones, and not just viewing their lives behind windows, in an institution or in a nursing home. So, this year in your budget proposal to the state legislature, you proposed to completely eliminate the Medicaid Waiver with Consumer Direction program, the very program that allows Amy and others just like her to work, volunteer, and be a part of their community. Why would you propose this, to eliminate a valuable program, not only to Virginia, but to Virginians?

McDonnell: . . . I really appreciate you coming and giving me that direct question. I can tell you, over the last five years -- well, up until about two years ago -- my dad, an Alzheimer's patient, who's now 94, lived at home. And we had a personal care attendant take care of him. So, I'm personally acquainted with the value that your attendants bring . . . . So, the value that personal care attendants bring to our health care system is well-known to me. And you're correct: The savings versus the average rate in a nursing facility, or an assisted-living facility, is significant.

Let me tell you about the budget we faced this year. There were a lot of very tough and unpleasant choices. I faced a $4 billion deficit when I walked into office on Jan. 16. I didn't ask for that, but that's the state of the economy that we have. What I decided is that the previous governor had proposed a $2 billion tax increase. I thought that was wrong for our economy. I thought it would not help us to recover. And so I asked the General Assembly to find ways to cut another $2 billion. Yes, I sent down $2.3 billion of budget amendments, six times more than any governor in Virginia history. And it wasn't pleasant. I spent three weeks going through the budget, my first three weeks in office, while we were trying to manage blizzards at the same time. But I really wanted to say, "What are the things that I can do? Even though these decisions are going to create some pain for people. What are the things that I can do, the best I can, with the resources I've got, to reduce our spending $4 billion but still try to take care of as many people as we can?"

There was a consensus after a while from the General Assembly that health care and K-12 education were the two areas that had grown fairly dramatically over the last decade, and had experienced relatively fewer cuts to their budgets, compared to public safety, transportation, higher education, and other areas. So, yes, we made a number of cuts that we knew were going to be painful, to K-12 education and to health care. In the hundreds and hundreds of millions of dollars. One of the areas that I did recommend to the General Assembly that I would approve if they chose was a cut in this area. It was one of a series of very, very tough choices to make. So, Mary, all I can say is, when you cut $4 billion, there aren't great choices. That's why I'm doing this commission. Because over time, I think we'll have a strategic plan to be able to properly manage and consolidate and make government more efficient, as opposed to me, with 30 days, to try to make a series of cuts to make a budget work . . . .

So, I understand. I really applaud you and what you're doing to take care of your daughter. It is a cost-efficient method. And over time, we're going to find more of those cost-efficient methods, with managed care, with things of that nature, to allow people to live more independent lives at home, as opposed to in a facility. That's certainly been true in my own life. So, I applaud you for that.

Daniel Payne, Hanover: I'm 32 years old, I'm a father of two, and I live in Hanover County. I'm a VMI graduate. I'm a small business owner. But more importantly, I'm a person in recovery from addiction to alcoholism. God willing, I'll be celebrating eight years coming up this year. I'm also the director of a nonprofit called the McShin Foundation . . . .I've been involved -- with the foundation -- down here in the city, with Richmond and Virginia, and the bureaucracy, and all the different levels, trying to get care for individuals like myself, who are trying to recover in the early stages. Our small business, we employ only people that are in recovery and trying to get back on their feet, so they're surrounded by peers. And I've just noticed throughout this short time, the numbers and all those things, they can baffle me at times. But when it's time for us, the recovery community, to sit down at the table . . . .Were ready to help. I just want to say, how can we help? . . .

McDonnell: Well, one, thanks for your courage in coming forward and telling us your story. And thanks for what you've done for eight years to be an example for others . . . .One of your colleagues, we recognized during my State of the Commonwealth speech, to the members of the General Assembly, as sort of a testament for how people caring for one another, with, really, without any government support, can make a difference . . . .I've visited The Healing Place. You're familiar with that, which is a home for people with substance abuse who are also homeless. And I really think that we have a lot of opportunity in this area, to do some positive things. We're finding out that people with substance-abuse problems, or people that are -- even worse -- that are just out of jail or prison that also have substance-abuse problems, those are the folks that if we could make some investments, particularly whether it's public or private, we can turn some lives around. And in the long run, save a tremendous amount of money in the public safety net. And more importantly, save people from being revictimized. So, tomorrow, just as a for instance, we're going to have a fairly significant press conference to talk about a prisoner re-entry program that we're going to announce. It'll help some of you folks who have substance-abuse problems and have decided to commit crimes. We really think that 90-day golden window after people get out is when you can make a difference, as to whether that person goes back to the life of crime, or whether they have the appropriate support, the mentorship, the church community helping them, transportation, medical -- some of those basic things so that they can turn around and make a difference in their life. So, we'll have more to say about that tomorrow.

I would encourage everybody from the foundation to realize that there are great opportunities. Doesn't matter what situation you were born into, it doesn't matter what bad choices you've made in the past. Every day in this great state of Virginia, you've got the chance to make a decision as to whether you're going to follow the straight and narrow, and be productive, and create opportunities for yourself, and follow the golden rule, and follow the law, and help other people, and earn a decent living -- or whether you're going to go back to some of those bad habits that lead to a less-than-productive life. We want to work with you. We know that -- particularly people that have come out of programs like McShin -- you can be a great role model to others . . . .Why don't we follow up with you, especially as part of this government reform effort, as we look at ways to engage the private sector, the faith-based community, to make a difference in this area, and how we can work together with our social services network, to save money and do good things for people.

Janet James, Richmond: Governor, my suggestion is to do away with term limits. In other words, let governors -- and even if it doesn't help us out of this crisis, I'm looking at the legacy for Virginia. This is a great state . . . .If governors didn't have to leave after four years -- if you have a good governor, he's going to stay. And not only is he going to stay, he's going to have his cabinet members and different ones to stay . . . .Versus this constant turnover. And all the rigmarole that comes up every four years. And so I would like your thoughts on that. Full disclosure: I work at the Virginia Department for the Aging. And I am saddened that we might get a new commissioner, because she's doing such a good job. And so I started thinking, "Wait a minute. If this is going on over the state every four years -- every four years, new this, new this, new that. Reappoint this, do this." How much better would it be? The last thing is, it would also force people to clean up their messes. And I don't mean any disrespect.

McDonnell: . . . In Virginia, the only job that's term-limited is mine. Every other job -- attorney general, lieutenant governor, all the members of the House and the Senate -- are unlimited terms. So, we're the only state in the nation -- most of you probably know that -- that has a one-term limit. I've been in public office since 1992, and I've worked with about six governors over that time. And you're correct, every four years there is turnover. In fact, if you don't get a lot of things done in two years, a lot of times the public's just looking to who's the next guy or gal that might come in. And so a lot of governors feel in a hurry to get things done. I certainly do, but that's because I want to get things accomplished.

I think there's been a robust debate for as long as I can remember. There's been a bill introduced, a Constitutional amendment, to change that one-term governor for 20 years, and it's failed every year. And I think the reason for it is that the governor of Virginia's a powerful office. You've got line-item veto, you've got 4,000 boards and commissions to appoint. You can do an enormous number of things with the power that's vested in the governor by Constitutional statute. So, the General Assembly's objection to putting that measure on the ballot is that you've got to rebalance power. If you give the governor two terms, then you've got to take away a little bit of power from the governor and put it back into the legislature. So, that balance of power that our Founders thought was so important means legislative, executive, judicial, stays intact.

I think we'll have a discussion about that next year. Many people have told me they support it, particularly in the business community and state agencies, because they want more continuity. And the flip side of that is, we're the only state in the country that has it. But we're also the best-managed state, the most business-friendly state, the best place in America to raise a child. So, a lot of people are going to say, "What's the problem?" It maybe that this turnover of governors is a good thing, because you don't have power invested in one person. You know, one thing that's good about being governor for one term is, I'm not running for re-election. And I can be able to do what I think is the right thing to do, because it's what I think is good for the people, without having to worry about re-election. So, that's the flip side of that. But on balance, because of so much I've heard from the citizens, the business community, and others, I think having the opportunity for you all to re-elect -- or not hire, again -- a governor, is probably the better choice for democracy. You don't like 'em, throw 'em out. If you like 'em, keep 'em in. But right now, you don't have that choice like the other 49 states. And it's probably the better approach. I think we'll have that discussion again next year.

Rick McDonald, Richmond: I'm going to see if I can help you on that financial end. The topic is efficiency. And of course, dollars are a component of efficiency. And VDOT is in the process of spending $1 million per mile on a bike path. The bike path is on Route 5. The next phase is going to run on Route 5, in front of Sherwood Forest. It's a multi-year effort. Given the current economic situation, given the limited tax dollars out there, $1 million per mile -- that doesn't include the cost of right-away acquisition. It doesn't include the cost of utility relocation, it doesn't include the annual maintenance expense. I'm of the belief that that's not the most prudent use of our limited taxpayer dollars, be they federal or state.

McDonnell: I was not aware of that. VDOT has a $3.8 billion budget. That's a lot of money. Even though it's probably not enough to do all the things we need to do. I believe that there's some things we can do better. One of the things we got done this year, as you know, and I'm addressing this tangentially, is that I requested legislation this year to audit our major state agencies, starting with VDOT. So, that bill has passed, a performance audit, to determine: How can we use those transportation resources better? Everybody tells me -- particularly in Hampton Roads, Northern Virginia -- that we've got to have better programs for congestion relief. In other words, more roads, bridges, rails, and other resources.

We've got to find out how to use that $3.8 billion better. So, we've got a performance audit that's being put in place. That big one about three years ago in Washington state found $110 million in savings they recommended. That's a good story. We've also got an internal financial audit, because there's so many pots of money at VDOT that my new transportation secretary, Sean Connaughton, is digging through to make sure we properly account for and spend every dime. I've got two major audits. We've got some great people at VDOT. I tell you, the work that they did during those three blizzards in January and February was extraordinary. Twelve-, 18-hour shifts, virtually no loss of life. Really, them and the National Guard, extraordinary effort.

But at the same time, that's a lot of money that we've got to be spending more wisely. So, between those audits for efficiency and other things, we'll make sure the dollars are spent as best we can. I'm not familiar with the Route 5 bike path. But sometimes money's spent to try to enhance quality of life, that doesn't do anything for traffic congestion, unless you're going to ride your bike, I guess, from Charles City County to downtown Richmond. That's a long ride.

Julien Williams, Richmond: I've written several letters to the editor about the '08 and '09 legislature that frustrated me to death, when they were asking for ways to raise revenue for transportation purposes. And nothing came out of those sessions, that I saw. But then I heard your planks, and one was tolls on I-95. My letters to the editor suggested, among other things, one toll on 95, and one toll on 81, going in one direction. The news tonight said you rolled out your proposal to have a toll on 95. My suggestion would be to have one in Virginia and one in North Carolina . . . .What do you think the probability of the feds approving a toll on 95 is?

McDonnell: It's one of the things I talked about during the campaign, about 12 different ideas to fund transportation without tax increases. You had user fees and general funds and bonds and public-private partnerships, all to improve our transportation system. We're a world-class state. We're the eighth most affluent state in America. And yet, I think our biggest need from an infrastructure standpoint is roads. So, one of the ways to do that is to use user fees. And that's what a toll is. The idea here is to take existing tolling authority that we have on I-81, and ask the federal government to transfer that to I-95. It's the busiest road in Virginia.

Now, a couple things. One, we'd only have it at the border of North Carolina. That means a lot of people from North Carolina to Florida would be helping pay for Virginia roads. Right now, they don't do that unless they stop for gas. It's a free ride through Virginia. Most of the states north of here, all but three, from here to Maine, toll 95. We don't. I think our chances are better than some other states that have asked for this waiver authority from the federal government, for this reason: The only reason that I'm asking for this is, we want to make improvements in that 95 portal. Don't use it as a cash cow for anything else. If you're going to toll 95, use it to improve 95, all the way from here to the 14th Street Bridge. Anywhere in the corridor . . . .

It can generate anywhere from $30 million to $60 million a year. If you bond it, it's $1 billion or so in bonds. So, we're still looking at those details. But until we get approval from the federal government to do that, we're not going to be able to make that change. So it's a request to the federal government. If we get it, we'll be able to implement it. But again, part of my frustration is, for both the state and the federal level, it takes so darn long to get things done. That's one of the reasons that we're doing this commission. There are so many reasons for the federal government -- this will take months to get an approval. We have to do an environmental impact statement to put up a tollbooth. I mean, it is agonizing, how slow our government works. And I think that's a disservice to you. That's one of the reasons we launched this commission. So, we're going to try to get this -- all of these things with transportation, whether public-private partnerships, or patching potholes, or opening the rest stops, or whatever -- we're going to try to get these things done quickly. But as soon as we get the approval, we'll start making arrangements to get that. I think there's a reasonable chance.

Bill Stewart, Colonial Heights: I spent most of the 1990s teaching English in Taiwan, one of the Asian Tigers. And the most recent decade, I spent most of that working in local government here in Virginia. So, I kind of have an interesting perspective from both sides. I guess one of my general observations, and leading to a quick question, is -- obviously I've seen things over there that the Asian Tigers do very differently, in turning government revenues into delivered services. There are a lot of ways where they do it more efficiently. Particularly education. Their education system is radically different than ours. They can produce better, more capable, more skilled graduates, for less money than we can. And I'm just curious, is there any way -- it would take too long to explain in the two minutes here. But, is there any kind of mechanism for input to this commission, to kind of come up with these suggestions?

McDonnell: : Absolutely. First of all, thanks for that advice. And you bring up really a larger point. I went to Taiwan in 1999, and briefly in 2001 . . . .I'll tell you, it's miraculous what's happened the last three or four decades over there. And now the mainland is catching up in some of those areas around Beijing and Shanghai. The education system, extremely focused on science, technology, engineering, math, health care. The things that are going to lead to a good job. And many of those folks, after school, they'll go and work a four-, eight-hour shift. It's really amazing, the entrepreneurial enterprise that you see in some of the Asian countries. As a result of that, some of these recent statistics have said that we're falling behind a lot of the Pacific Rim countries, in engineers per capita, scientists per capita.

That's a real concern that I've got long term about our higher education system, and about the future of our country. Most of you probably are believers in American exceptionalism. We believe that this is a great and mighty country. But we've got to realize, we're not going to be able to stay that way -- for the military, for technology, for a lot of other industries -- unless we can start producing bigger numbers of people from both our K-12 system, in technical fields, and also from our universities. So, I'm having another commission -- commission No. 3, and those are the only three big ones I'll do this year -- that's focused on higher education reform. This is an area that I'm very interested in: Having more accountability and stewardship of those dollars in our higher education system.

It's unsustainable, to double tuitions every ten years. Unsustainable. Can't do that. Price some young folks out of the price of a college education, or saddle them with a decade of debt. And we don't focus enough on those areas that lead to the best-paying jobs in the future. Science, technology, engineering, math, and some of those. So, I think, absolutely, there's some things that we can learn from China and India and Singapore and Ireland and Vietnam and others that have had fairly significant refurbishing of their economy, with appeals to capitalism -- or use of capitalism and free enterprise to attract business. That's why we're losing businesses from America that are going over there. Which is why our top focus right now is job creation and economic development. So, the answer--the long answer and the short answer together -- is, yeah. We can learn something from those education-slash-work-study models in some of those other countries, and try to use some of those things here that will lead us to the kinds of high-tech graduates that we're going to need to sustain our economy going forward.

John Kmec, Chesterfield: The state operating budget grew from $21 billion to $38 billion over the past ten years. That's a 25 percent increase in spending on a per capita basis, after adjusting for inflation. So, clearly the issue we face, as I'm sure you know . . . is one of the excessive spending, and not revenue generation. So, I have five suggestions on some areas to get spending under control. First, as the commission gets started, I would hope there would be a considerable time spent to define just what should be the role of government. Are there just some basic needs that government should provide, or does government exist to satisfy everybody's wants? Government programs have been created, grown, and evolved over the years as a response to special-interest groups as politicians seek to be re-elected. Today, there are thousands of such groups seeking to get politicians to transfer money from one group of citizens to another. Perhaps a reform such as term limits would help to alleviate this issue.

Second, the commission should look at what's been behind the increase in spending over the past ten years. What new programs have been added or expanded? Also, what programs have outlived their usefulness? An example of the latter is taxpayer funding to public broadcasting. You might have been able to convince me that that was acceptable 40 years ago. But with the hundreds of cable channels today, it's time to stop this waste of taxpayer money . . . .

Third, reform the tax code so that, with few exceptions, everyone who has income pays some level of state taxes. I don't know what the percentage of households in Virginia that are exempt from state taxes. However, I did read that 47 percent of the households in the country paid no federal income tax last year. So, now we have half the country who have no skin in the game, who get to keep and vote for things they want, that the other half has to pay for. That's a recipe for a train wreck in the not-too-distant future. Fourth, adopt pay, benefit, and employment measures of the private sector. Lifetime employment in a government job should not be considered a right. Fifth, work with other state governors to reduce the regulatory burden, red tape, and unfunded mandates from the federal government.

McDonnell: You made some excellent points, that I fully subscribe to. One of the first things we're going to do -- I talked to my staff about this afternoon -- is to look at all aspects of state spending. Let me just take a show of hands. How many people think that government at all levels is spending too much? [MANY HANDS RAISED.] How many think the government's not spending enough? [A COUPLE OF HANDS RAISED FOLLOWED BY LAUGHTER.] OK, that's about right. That's about what I hear everywhere I've been in Virginia, which is a symbol of what you're saying. I think one of the reasons I ever got elected, I talked a lot about spending, at the state and particularly the federal level, where right now $110,000 per American family is our debt. The average American family has a $17,000 credit card bill. But with federal spending, we've got over $100,000 per family. It's an unsustainable level of spending, John, and everybody knows it.

Your point is exactly correct -- and this is another reason that I signed this executive order the day I got inaugurated -- that state spending before this meltdown of last year, we had actually grown 90 percent over the last decade. That's how much the spending in Virginia had grown . . . .Adjusted for inflation, it actually grew 28 percent faster than the rate of growth in population and inflation. Now, listen. We did a lot -- there were a lot of good things that were done. But just like families and businesses have to live within their means, so does government. So, that report, and the statistics you quoted, will be the first thing that I ask every member of this commission to read, to see where that spending has grown, why it's grown, and then to start looking at how can we increase productivity, use technology, use consolidation, use better budget controls, in order to put a check on spending in those areas, so that we can invest -- hopefully the savings -- either in refunds to the taxpayers, or in things like transportation, where we don't have enough money.

Ali Anderson, Richmond: Standards need to be consistently applied across all levels of government, including the legislative, the judicial, and the executive branches of government . . . .We need to delete unnecessary files from the servers, OK? So, all -- every single agency, we could have a summer clean-up, and just delete unnecessary files. If you don't need it, it needs to be deleted, period . . . .No. 2. We need to add metadata to every single document that's created . . . .We need to add proper metadata to every file. And this is a responsibility of every employee, including cabinet secretaries, you, managers, supervisors, and employees . . . .Let's make sure our code is valid. HTML is the universal language of the web. Out of 50 states, only five states are routinely producing valid code on their portals. Unfortunately, Virginia is not one of these states. Valid code is the key to usability and interoperability . . . .And you want to talk about out-of-the-box thinking? Let's try some corncob media, to soak up the oil off the beaches. And we might want to consider cow manure. Dry cow manure. I know that sounds crazy, but I want to talk to somebody.

Tim E. Dirr, Petersburg: I want to give thanks for some of the work you've done so far. First, I'm thankful that you made a bold and courageous decision to allow the state police chaplains to be able to pray in the name of Jesus again. We applaud you for that, sir. Thank you. Secondly, I want to thank you for the work you did when you were a delegate, and you were chairman of the Courts of Justice Committee, and moving forward the Covenant of Marriage act. I thank you for that, sir. I know that's been on the back burner now for a while, but I've been trying to move it forward, mostly by prayer . . . .Is there any way that you can make the same kind of bold decision that you've made with the police chaplains and restructure the subcommittees so when you bring -- or if you bring, and I hope and pray that you do -- the Covenant of Marriage Act back on the table, that it won't die in the subcommittees as a lot of good legislation does?

McDonnell: . . . The question of structuring of committees is solely in the province of the legislature . . . .Last year, I know the Covenant of Marriage bill, we had -- in fact, Gov. Kaine and I, he was lieutenant governor at the time. He and I teamed up, and worked that pretty hard. We actually got it out of the House of Delegates, and it was killed over in the Senate. But I think there's a lot of support for the proposition that here in America, the stronger that we have our families, the more families stay together, the less disruption for children, and the less reliance on social services -- meaning all of us paying for the breakdown of the family -- I think that's something where there's broad agreement.

How to keep those families together, and what the role of government is? That's where the debate has been. The Covenant of Marriage was simply an optional form of marriage where people pledge perhaps a more significant level of commitment, when it comes time to navigate the difficult waters of arguments that happen, probably, throughout most people's lives. So, hopefully we'll find ways through the public and the private sector to continue to strengthen that institution.

Charles Bush, Richmond: [I'm] with Energy and Environment U.S. Green Energy. We're the only solar manufacturer we have in Virginia . . . .We're in Fredericksburg . . . .What are we going to do about making Virginia better for renewable energy?

McDonnell: I think this is a marvelous opportunity for Virginia. When we're looking at, how do we put back to work the 7.4 percent of our people who are unemployed? How do we create more jobs and opportunity? How do we get this dream of reducing America's reliance on foreign countries, such as Venezuela and Russia and Iran. Which is not a long-term good policy for a country. How do we do something about that? I think it's exactly these kinds of industries we're talking about.

I've set a goal, a rather bold goal. Virginia should be the energy capital of the East Coast. We should make this one of our core competencies and core industries that we can gain tremendous economic development and investment here in Virginia. We've got tremendous resources in those traditional supplies. Coal, natural gas in the Southwest. We've got more private nuclear capacity than any state, most of it headquartered in Lynchburg, Virginia, with major nuclear companies there. And we've got tremendous offshore resources. I know we've had a setback here with the gulf, but we've been named the first state by President Obama to drill off the coast for oil and natural gas. Once we've figured out what happened, then maybe that can proceed back on track.

Of all the energy that you use here in Virginia, only 3 percent comes from renewable sources -- wind, solar, biomass, and related. The rest is all the traditional sources. And it will be that way for a while. Because right now . . . without significant government subsidies, at this point, wind, solar, biomass is fairly significantly more expensive than traditional sources like coal, natural gas, and nuclear. But that's going to change over time with economies of scale.

Here's what we did this session. One, I'm a strong supporter of offshore wind. I think we ought to give that a try. Now, right now it's about 2 ½ times the eight cents per kilowatt-hour that you're enjoying as residents of Virginia, that we're getting right now. Well, I joined the Atlantic Governors Wind Energy Consortium, with the other Atlantic Coast governors, working with the Secretary of the Interior Ken Salazar, to form a group where we can start using more wind energy. Offshore in Virginia, I've kidded my friends in the General Assembly, we've got the best winds outside of the General Assembly right off the coast of Virginia -- but we don't use it. It's shallow water, it's high winds. Perfect combination. It's very expensive, though. But if we bring those jobs here for wind, we're going to be able to have tremendous industry right in Norfolk and Hampton Roads. Same with solar, your industry. We don't quite have the climate that's as good as a Phoenix or a Santa Fe. But we do have . . . a fair amount of decent weather. The solar industry, as well as the biomass industry, can play a significant part of energy independence. So, we passed a bill this year to create green-energy job tax credits, $500 a job, which started an Atlantic Coast Wind Energy Authority, to help foster wind energy. We've created some other regulatory processes here -- about nine different bills to promote alternative energy. And so, I really think your energy, along with wind and biomass, is going to slowly take off. It'll reduce the carbon footprint, and it will also provide alternatives. Right now, those costs have got to come down in order to make it competitive with traditional resources. But I think, long term, it's going to be part of the overall mix that makes us more independent.

Luqman Sh-hersi, Petersburg: I am a junior public administration major from Virginia State University . . . .I'm glad that the rest stops are open, so we can find a place to eat, and use the bathroom. And one quick question. Has your administration also looked into finding jobs for college students?

McDonnell: First of all, thanks for coming from Virginia State. It's sure good to see young people here. I mean, it's good to see all of you here. But, particularly young people that want to learn and care about the future of our state and our nation -- this is terrific . . . .It's a tough time for young people getting out of college that want to go live and pursue the American dream, when we've got 7.4 percent of our people unemployed. Now, it's below the national average. But I tell you what, if you live in Martinsville or Danville or Pennsylvania County -- you had 16, 20 percent in Martinsville. It's heartbreaking. And so that's why I've made such a focus on this issue of job-creation for you young people. The job is what gives you access to the American dream. The job is what gives you your sense of dignity and self-worth. And that's why I'm very focused on all these things that we can do on this task force to reform government. And on our job-creation task force. So, yeah. We're looking at all those, whether it's entry-level jobs for a young person coming out of college, or somebody that's 50 years old and just got laid off at International Paper. We want to take care of needs for all those.

We've had some announcements over the last couple weeks that have created jobs, but we've got a lot more to do. And especially for young people like you. Getting that start, and getting you encouraged and engaged in our society, so you can start paying back those student loans, is very important.

Jonathan McDonald, Richmond: I'm the secretary and board member of Richmond First Club . . . We contacted you to support your campaign position on bipartisan redistricting. At this point, since it has failed in the General Assembly, wanted to know where you stand now, what action and plans you have for pursuing this?

McDonnell: Bipartisan redistricting is an idea that's had a pretty robust debate over the last couple of years in the General Assembly. We will engage in redistricting next year, as we do every ten years, to account for the Census. It is a concept that initially I had a lot of questions about, but I think that overall, that having our citizens have input into how districts are drawn, as opposed to the legislators solely drawing their own districts, without public input, is a meritorious idea. I have said that I will try to find ways, if the General Assembly does not pass a bill -- and they've still got another year to do it. But if they don't, to try to find a way through my own executive powers, to provide for citizen input, through some sort of bipartisan work group that can provide that input before I'm able to review and sign a redistricting bill. So, the Senate has passed the bill. The House and Delegates has not passed the bill. I think it'll probably do some good. Other states have done it. It's helped a little bit in the area of the congressional races, the legislative races. You know, we've had such intense competition, that I know that was one of the purported purposes of bipartisan redistricting. But, frankly, the competition over the last couple cycles has been pretty intense . . . .

The thing that I think that brought this to bear is that parties, for as long as I can remember, have gerrymandered. For the benefit of that party. But you know what? For the last three cycles, it hadn't worked in Virginia. The party that's drawn the lines has lost seats within the two or four years immediately after drawing the line. So, it really hasn't been everything that I think people thought it would be. It hadn't worked to the benefit of the majority party since 1980. The second thing I would say is that the statutes already require the lines to be drawn by the legislators, to include communities of interest, contiguity of land masses, and other factors that were in this bipartisan redistricting bill.

In other words, the General Assembly's already supposed to do this. So, part of the problem, I think, is one of enforcement with the General Assembly itself. Anyway, the bottom line: I will try to find a way, working with the legislature. I encouraged people to consider one of these bills this year. They chose not to do it in the House. And we'll try to find some other ways, if they don't, to get some input from the citizens so that it's not solely the General Assembly drawing the lines.

Joe Andrews, Richmond: I'm a former retired state employee of the Virginia Department of Social Services, as well as the Department of Corrections. So, I've worked in state government, and I know a little bit about it. And so with that background, I offer this suggestion, which I trust you will receive kindly. One area of state government services that can be made more efficient and effective is that of human services. Government officials and politicians often look at the cost of these programs, but often fail to consider their benefits. Admittedly, it is often difficult to ascertain the value of these services, because of the lack of follow-up evaluation research. The tools for evaluating such programs are out there. However, they are rarely used, especially when it comes to examining social services. One such tool is cost-benefit analysis, which has been used by the U.S. Corps of Engineers since 1936. In the era of scarce government resources, it might be wise to consider this approach to evaluating human services.

When sound evaluation methods have been applied, they have shown that well-designed human service programs can show positive results. For example, in Wisconsin, it has been discovered that high-quality pre-school programs return an average of $10 for every dollar invested. Home visitation programs generate $5 for every dollar spent. Therapeutic intervention services return an average of $9 for every dollar invested. Well, it costs $68,228 per year to incarcerate a juvenile offender in Wisconsin, but an effective delinquency intervention program costs a little less than $10,000 per year. The cost-benefit analysis of human service programs, along with good methodological research, can ensure that the taxpayer's money is being spent wisely and efficiently. How do you respond to that idea?

McDonnell: You're absolutely right. We don't have great metrics in state government to see, really, what's working. We institute a lot of programs, but then we don't put performance measures at the back end, and review them periodically. That's one of the major reasons I started this commission. We got to go back, whether it's a 10-year-old program, or 100-year-old program, and ask those hard questions. Does it work? Is it getting the results? Is the cost of the program yielding the benefits? Your exact analysis. And is there a better way to do things in the 21st1st century than we did 50 or 100 years ago?

Adria Scharf, Richmond: I'm the Director of the Richmond Peace Education Center . . . .The way we define efficiency and cost saving really matters. And efficiency can be defined narrowly, or it can be defined more comprehensively. And there are times when cost savings, or measures that seem to save costs on the books, in fact have implications and impose costs on the larger society, sometimes unintendedly. And I think the first woman who spoke, from Winchester, was sort of a classic example of that -- of the cost that cost savings sometimes can have. And conversely, investments by government and prevention programs in health care, in education, can be essential to insuring that we have a productive work force, productive population, and effectively running society. And when I go out in the community and hear people, what I'm hearing is not so much a sense of urgency about the redundancy of programs, but rather a sense that there just is an insufficiency of support, given the pain of the recession, the pain of the budget cuts. And sort of the erosion of program and support services over time in certain communities, especially in Richmond.

I wanted to ask for your commission to bear in mind the larger definition, the larger conception of efficiency. In addition to thinking narrowly about immediate cost savings on the balance, to really think generationally, to really think long term about the impact of cost cuts, and about -- again -- the larger vision of building a better community, in which opportunities are shared widely, and in which we have a healthy and productive population.

McDonnell: There's tension sometimes between -- it's back to the cost-benefit analysis, more broadly-defined, as you said. When government is growing at a spending rate of 25 to 30 percent adjusted for inflation in population over a decade, and yet there are other needs out there, as you say, that may be not being met -- what do you do? What is the obligation of government at that point? And I think it starts with making sure that those existing dollars are spent absolutely the best that they can. Making sure government is as lean as it possibly can be, so that there are those unmet needs, as you've described in the community. That that's where some of the savings could go. I think the other thing is that -- the gentleman that gave the statistics before, about how many people really are invested in Virginia, in America right now. When you have 47 percent of the people that don't pay taxes at the national level, that's a real problem.

Scharf: That statistic doesn't include payroll taxes. So, people are paying out of their --

McDonnell: That's true. The point being, that number has grown at a frightfully large rate over time. And -- look, we all know as human beings, if you're invested in something, you care more about outcomes. If you're not paying for things, then you are a greater consumer of those government services. That's just an aspect of human nature. So, I think as a society that is compassionate, that wants to have a good safety net, we also need to be concerned for all the taxpayers. For instance, about a Medicaid system that's grown 1,600 percent over the last 25 years. That's an unsustainable level of spending, from $200 million to $3.4 billion, with the new federal health care plan that's going to go up another $1.5 billion in the next decade. So, yes, make sure that those who are less fortunate in our society are properly cared for. But also realize, we've got a strong fiduciary duty -- I do, to 7.8 million Virginians -- to make sure that those bucks are being spent wisely. And when we have spending that far outstrips population inflation, we start asking the questions, "How do we do this better?"

Julia Newton, Norfolk: This is my son Anton, and my daughter. I'm here as a personal care assistant, a mother, a mother of a child with disability, a taxpayer, and a voter. I provide incontinent care baths for hygiene, preparing meals, administering meals, transportation to schools, and other community activities, doctors' appointments. I also provide mental and physical support, a safe and positive environment with quality care. My wages are low, I have no benefits, but I love my job. The program you propose to cut, the Elderly, Disabled Consumer Directive Waiver, provides services to my son, and it provides a great deal of relief to families like me, who otherwise would have to institutionalize our loved ones. When I first heard of these cuts, I felt like someone had thrown me and my son under the bus.

I will go from being a taxpayer to a tax burden. I didn't know what my son would do, because he needs 24-hour care. I cried. And I would like to know, why did you propose a cut that had the support of the Democrats, the Republicans, the House and the Senate, and saved the state $1.1 billion a year? Can the PCAs count on you, to help us to continue to save the state money this year and every year to come?

McDonnell: I can just tell you, we cut $500 million out of health care this year to balance the budget. Those weren't easy choices. That was one that I made, among a series of tough choices. As we do a better job creating jobs and getting more taxes to be paid through economic expansion and free enterprise, then we'll be able to restore some of those cuts. That's my goal. But when you're $4 billion short, ma'am, there are a series of tough choices. That's one that I recommended to the General Assembly, among a series of tough choices. I know it works a personal hardship on you. But, frankly, most of the recommendations that I made and the General Assembly made this year in health care work some hardships on people. I think over time, one of the things we do have to do with what's happened now at the federal level, and what we're going to do at the state level, is to find ways to make those ever-burgeoning health care dollars go farther. And that's part of what we're doing here with our health system and reform, and with Medicaid reform, that I've asked Dr. [Bill] Hazel, my health secretary, to start looking at, so that we can, on the one hand, make these dollars work better so that cost efficient things like you're doing with your son are still in place, but that we don't double Medicaid every couple years, which is what we're doing right now.

So, it's that same tension I was describing before. But listen, I appreciate that. I know that you're telling me directly that what we recommended, that the General Assembly considered in some areas, was a reduction for you and your family. But when you're the governor of Virginia, you've got to make a series of tough choices when you're cutting $4 billion. And those are the decisions that we made this year. And I hope that with our efforts to create jobs, next year is going to be better.

Mukul Paithane, Glen Allen: I'm president of a small company that specializes in organization transformation. I want to relate back to your opening comments, when you began talking about reform, etc. Reform is policy reform and execution reform -- how you execute the policies. As we know, there's a lot of discussion on what policy is good. That is required for the government. But on how we execute, is that where the reform commission or committee you're forming will focus on? And if it focuses on how best to execute the policy, do you think the zero-dollar budget of the $15,000 expense budget you have allocated there would really do justice to the payback that you're expecting? I'm assuming you're expecting a payback of $500 million to $1 billion out of this committee, at least . . . .Even if it's at 1 percent of a $75 billion budget, that's significant. So, the question is: Is it really wholehearted from the government's standpoint to have zero dollars allocated to such an important effort? . . .

McDonnell: I'm very blessed that on the three commissions I put together, everybody on that commission -- from the private sector -- is volunteering their time. Nobody's getting paid. They're not getting per diem. In this tough budget time, people aren't getting paid. I know I've had my cabinet take a pay cut. We took a pay cut. We reduced expenses. We're trying to do our part along the way. And so what I don't want to do is create commissions that spend a lot of money, until -- you know, I want to be able to prove we can get results.

Silvestri: What role do the citizens have in the future, in adding comments to the reform?

McDonnell: I can tell you, after 19 years in elected office, the government only works if you all care and you all do what you're doing tonight. I know you could have been shopping, been at a ballet recital, been at a soccer game, doing something else. But you chose to come here and tell me and my team things that are on your heart, that are important to you. Some of you disagreed with things that I did. I accept that. Some of you had good ideas about what we need to do in the future. Some of you just came to listen. That's great. But I tell you, I am passionate about making democracy work. All of you know, I had a daughter in Iraq a couple years ago. You know, when my daughter was there, 70 percent of the people in Iraq came out to vote. When I got elected governor, 45 percent of the people showed up. I think that's a disgrace. Our democracy only works well if people like you care about what we're doing, want to stay involved, give us input. Whether you're giving us constructive feedback, or whether you're chewing us out for something we're not doing, that's fine. We accept that. But that is something we have to do. We have to increase civic engagement. We have to increase the level of civility and discourse in our government. And we have to find ways to make things work.

I bet most of you would tell me -- you're probably less concerned about Republican or Democratic rhetoric. But what you do want is, you want to see government work for you. And I really believe that. President Obama's talking about that as well, and I think more and more people in public life that do that are going to be more effective. So, I guess the way to close the time is, having the RT-D, the paper of record for the capital city, hosting this, is very important. It's a statement that you care about citizen input as well. And I'd like to ask you, go to our web site, which is www.governor.virginia.gov.

Tell your friends and neighbors to do it. Because I can tell you, in the 19 years I've been in office, I've introduced probably 350 bills. I did about 80 the last couple years, last year as governor. A lot of those ideas came from other people. Wasn't something I thought up in the shower. Somebody else had a good idea, and came to me. I was just smart enough to recognize it as a good idea, and pursue it.

Representative democracy has absolutely been the linchpin of America for 234 years. And that's why this is so important here tonight. I hope you'll keep it up. Go to the website, e-mail us, give us your good ideas, and we'll make this commission work for you. Thanks.