Lori Sturdevant: The long and winding road to reform

Bush Foundation President Peter Hutchinson -- the very model of perseverance in the public sphere-- turned up at the Capitol last week to talk about reforming government.

Five years ago, the founder of the consulting firm Public Strategies Group was stumping this state with the thought that he could be Minnesota's second Independence Party governor.

He talked about the need to move state government neither left nor right, but forward. He called for rearranging state spending to purchase outcomes rather than inputs.

He allowed that it might be good to let competition be a lever for improving the public sector, just as it is in the private one.

He got 6.4 percent of the vote.

Two years ago, Hutchinson was newly in charge at Bush.

He locked arms with several other energetic new leaders at some of the state's leading foundations -- Minneapolis, St. Paul, Minnesota Community and Northwest Area -- to advance a batch of sweeping ideas for expecting more and paying less for government. (Did I mention that Hutchinson used to work for the Dayton Hudson Foundation?)

But Hutchinson has been around long enough (he was also a state finance commissioner 22 years ago) to know that changing government takes persistence.

So with one additional foundation, Blandin, at his side, Hutchinson and his philanthropic compatriots are back. Once again, they aim to convince lawmakers that when they ask whether government should be bigger or smaller, they are asking the wrong questions.

Instead, the foundations urge in their latest report, the overarching question of this and every legislative session should be, "How can we produce better results at the same or lower cost?"

In "Beyond the Bottom Line: Ideas for the future of public investment in Minnesota," the six foundations suggest a few answers to that question. Among them:

•Charge ahead with health care payment reform, as proposed by two task forces in 2008. Pay providers to keep a population healthy, not for the number of procedures performed, and "better health outcomes" as well as up to $1 billion in public-sector savings each year could result, the report says.

•Invest in crime prevention, recidivism reduction and community-based corrections programs, and the prison population explosion that's been forecast can be prevented. Within eight years, the savings could be $150 million per year.

•Stop "paying" with tax breaks for things that aren't serving a good purpose.

The examples the report cites for that last item also explain the difficulty the foundations have had selling their ideas. They propose eliminating two income tax "expenditures" that upper-income people hold dear -- the home mortgage interest deduction and tax-free treatment of employer-provided health insurance.

That may be smart policy, but it's dumb politics. Perseverance is often necessary to bending public policy, but it's not sufficient.

But Hutchinson and the foundations are exhibiting more of what it takes. They've shown a willingness to change tactics in pursuit of their goals.

"Sometimes you need to change strategies to accomplish what you wanted to do in the first place," Hutchinson told me last week.

Foundations can be "the juice in the system that foments innovation. Innovation is the one strategy we can count on -- and it should be Minnesota's competitive advantage. It's an inexhaustible resource. We have to harness it up now."

Timing also matters -- and there are signs that the time for Hutchinson's message is more propitious now than in 2006.

To wit: On Friday, an unusual kind of legislative group, the Redesign Caucus, convened at the Humphrey Institute. A handful of House and Senate members, Rs and Ds, joined Dayton administration officials and a national consultant in what was billed as an "innovation workshop." Together, they brainstormed about how to bring innovation to bear on balancing the state budget.

One of meeting's conveners, GOP Rep. Carol McFarlane of White Bear Lake, told me before it started, "I'm trying to build a base for change where we can all win."