Texas's Cost-Cutting Measure, a Model, Moves to Phase 3

WHEN Vice President Al Gore began the White House effort to reinvent the federal government, he looked to Texas.

John Sharp, the Texas Comptroller of Public Accounts, began a crusade against wasteful spending in 1991, and his ``Texas Performance Review'' has since become a national model copied by about a dozen states as well as the Clinton administration.

Now Mr. Sharp is taking the Texas cost-cutting project to a new, more ambitious level. In shrinking the government's budget, a priority that both Democrats and Republican agree on, Sharp may be setting a new standard.

Last week, he released his third and most radical set of recommendations. While earlier audits recommended fairly mundane changes in accounting procedures and administrative matters, the latest installment suggests cuts in funding for teacher pensions and the abolition of the state treasury.

In all, Sharp's new plan has 400 recommendations, including a freeze on government hiring and the collection of sales taxes on purchases made by prison inmates. If all the proposals are adopted, they could save the state $2.1 billion over the next two years.

Sharp's plan was promptly endorsed by Republican Gov.-elect George W. Bush. Karen Hughes, a spokeswoman for Mr. Bush, said he ``certainly embraces the concept as outlined by Sharp of limiting the growth of state employees. He believes in a more limited and efficient state government.''

The Texas Performance Review began in 1991, when the Texas Legislature, facing a $4.6 billion budget shortfall, authorized Sharp's agency to inspect every facet of state government. He took the job with zeal, enlisting a small army of accountants and investigators to sift through the Texas bureaucracy.

Other states, including Florida, Wisconsin, North Carolina, Oregon, and Minnesota, are also pursuing performance reviews. But Texas leads the pack, saving taxpayers about $6 billion since 1991.

While Sharp's performance review has won friends in the GOP, his most powerful admirers are in the White House. Shortly after the 1992 election, Sharp sent a 12-page memo to congressional leaders and the Clinton administration, detailing ways the federal government could follow the Texas model. ``We figured if we ran into the mess we ran into here, it must be a real sewer in Washington,'' he said.

He didn't find immediate interest. Sharp recalls that House Speaker Tom Foley told him the proposal was ``a personal insult to the Democratic Party.'' The Texas comptroller found a more receptive audience with Vice President Gore, who invited Sharp and his top aide to advise the administration.

In September of 1993, at a press conference in Houston with Sharp at his side, Mr. Gore launched the National Performance Review (NPR), promising to cut 252,000 federal jobs and save $108 billion over five years.

A recent analysis of the NPR by Donald Kettl of the Brookings Institution says the program has ``accomplished far more than cynics suggested might be possible.'' Mr. Kettl, a political scientist at the University of Wisconsin and a nonresident senior fellow at Brookings, likes the ideas behind the NPR. He says some 60,000 federal jobs have already been eliminated and another 74,000 jobs may be cut next year.

But Kettl warns that the federal effort is not ``self-sustaining. The easy part is shrinking the number of employees,'' he said. ``The hard part is making government into a leaner more efficient entity. You want to leave government leaner and meaner, not smaller and dumber.''

Sharp thinks the move toward more efficient government crosses party lines because the debate ``is not necessarily whether you ought to have one program or another program.'' He says the goal is to make sure we ``do it right.''