Fresh ideas put to work in Indianapolis

By Joshua Benton
Blade Staff Writer

Page A9

When Stephen Goldsmith took office as mayor of Indianapolis in 1992, he faced a problem familiar to plenty of big-city mayors: the flow of people and money to the suburbs.

“On a clear day, from my office, I can actually see the dollar bills crossing the city line,” he said.

Immediately, he set out on a quest to strengthen Indianapolis by radically changing the way its government does business.

In a speech at the annual meeting of the Corporation for Effective Government on Friday, Mr. Goldsmith outlined how he has managed to do it, and along the way become one of America’s most acclaimed mayors.

His single biggest change has been to force city employees to compete with the private sector for the right to perform many city functions. Departments like wastewater treatment, fleet administration, and trash pickup – just about every department short of police and fire – have been put up for bid. Some contracts have gone to city unions, some to private contractors.

Similar moves in other cities have been decried by labor groups as blatant union busting. But Mr. Goldsmith said he has empowered the city’s employee unions, because they are allowed access to consultants and other corporate tools when formulating bids for services.

The result, the mayor said, is that unions, stripped of management bureaucracies, are in a surprisingly strong position when it comes time to choose who will perform the city’s work. He said no union workers have lost their jobs because of his reforms, although large numbers of middle managers have seen the unemployment line.

“The problem is not that public employees are less efficient than private employees,” he said. “It’s that public systems are less efficient than private systems.”

Free market conservatives such as Steve Forbes love his reforms. Mr. Forbes recently termed him tive mayors in American history.” But he has been almost universally lauded for his reforms, which have made him one of America’s biggest mayoral successes.

And statistics back up his boasts. One study released earlier this year rated Indianapolis the fourth-best city for earning-power in the country, and the city’s downtown is booming. Nonpublic safety city employees have been cut by 50 per cent. The reforms also have resulted in lower taxes. The competition has led to $400 million in savings, which he has largely put toward infrastructure improvements, he said. “It’s competition that produces value in the system,” he said.

Mr. Goldsmith said that value is increasingly important in cities like Indianapolis and Toledo, where corporate giants are increasingly fleeing for larger cities. Chicago or New York now, so we’ve got work to do,” he said.

CEG is a nonprofit corporation dedicated to the improvement of government services in the Toledo area. It performs studies on area governmental institutions aimed at finding more efficient ways to do business.