Haslam Offers Some Broadstrokes On How To Cut State Spending

By Kleinheider Posted on March 2, 2010 at 9:25 pm

Mike Morrow reports:

“I think we have an opportunity in the whole purchase-management side,” he said. “Those of us who have been in business understand you can make as much money by how you buy things as much as how you sell them.

“The state is a $28-billion-a-year business. I think we can improve in terms of how we coordinate our purchasing.”

Then, to make his point, Haslam offered what he prefaced as a “dumb example,” but it did explain what he meant.

“We have 21 different cell-phone contracts in the state,” he said. “We’re not going to save $1 billion on cell phones, but we can consolidate that purchasing and have a lot more purchasing power. We can do that in areas across the state. I’ve spent some time in other states that have done that and made some considerable headway.”

He explained that in Knoxville the city saved a lot of money by revamping health insurance plans by giving employees incentives for healthy behavior.

“That has really cut down on the growth in the cost of health insurance,” he said. “It was going up 14%-15% a year, and now it’s up 5%-6%, which is a big difference. It’s still not great, but it’s a big difference.”

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