Recognition of the need to focus public investments and programs on results was certainly not limited to Oregon. In fact, that and similar concerns were shared by federal policymakers in both the executive and legislative branches. As study and action unfolded in Washington, the policy climate became ever more favorable to experimenting with a new hybrid in intergovernmental relationships.
Interest in reforming intergovernmental systems was equally strong in legislative and the executive branches. Federal changes were spurred along by the Government Performance and Results Act (GRPA) authored by Senator Roth. The adoption of GPRA attracted little fanfare. But its provisions presented new promise for reforming the operation of federal agencies and programs. Under GPRA, all federal agencies are to develop long-term strategic plans, generate performance measures, and report regularly on progress toward their achievement.
Pilot efforts were also authorized under GPRA as an initial step toward full implementation of the law. These pilots are to help build a base of experience on the long road to transforming the federal sector to results-oriented governance. And Alice Rivlin, then-Director of the Office of Management and Budget (OMB) and a long-time advocate for rethinking intergovernmental relations, was eager to attempt an intergovernmental pilot.
The intergovernmental system was also reviewed by the National Performance Review (NPR), the federal government-wide reinvention effort. The NPR recognized that real progress on many of the nation's highest priorities would necessitate more effective partnerships with state and local governments. NPR's critique of the existing intergovernmental system was clearly drawn:(1)
"... the myriad of federal mandates and regulations that accompany grant programs are cumbersome and very costly to administer, lack a coordinated implementation strategy between levels of government, and are not achieving the intended outcomes. Each separate program has its own array of rules and regulations that must be observed, regardless of their impact on the effectiveness and quality of customer service. States and localities have limited ability to customize service delivery by integrating programs because of competing, often conflicting federal rules and requirements..."
NPR's prescription for addressing the ills of the intergovernmental system was also clearly formulated. In the first annual NPR report, Vice President Gore cited four reform objectives:
New directions in intergovernmental relationships were also favored in the political shifts of 1994. As the congressional elections shifted control from Democrats to Republicans, attention was drawn to adopting provisions of the new Republican majority's Contract with America. Curbing the federal government's regulatory powers, trimming spending, devolving authority to the private sector and state and local governments, and reshaping and consolidating federal categorical grants were all among the Contract's goals.
Between 1992 and 1994, Oregon Progress Board director Duncan Wyse and Barbara Dyer, director of the Alliance for Redesigning Government, developed strategies for promoting more direct linkage between the Oregon Benchmarks and the burgeoning federal interest in revamping intergovernmental systems.(2)
They promoted the idea in meetings with federal officials. And they sought opportunities to draw more attention to the potential for a partnership built upon the foundation of the Oregon Benchmarks. Support from the Alliance for Redesigning Government and advocacy by Governor Roberts culminated in an important step forward in mid-1994.(3) In May, an Alliance Advisory Board meeting drew together top-level state and local officials from Oregon with federal representatives. During the May forum, Governor Roberts joined Multnomah County chair Bev Stein and Portland Mayor Vera Katz for a review of the Oregon Benchmarks. That presentation offered a panel of federal officials from the NPR, OMB, and the Department of Health and Human Services an in-depth review of the Oregon Benchmarks.
Capitalizing on the interest generated by the Alliance meeting, Governor Roberts proposed a special, wide ranging partnership between the federal government and Oregon's state, county, and local governments.(4) The Oregon Option proposal was designed to test a fundamental redesign of the intergovernmental service delivery system to achieve results.(5)
Through the proposal, Oregon sought federal agreement for a pilot that would focus on implementing key elements of the state's top strategic priority -- their human investment benchmarks.(6) The proposal also was designed to address deficiencies in the existing intergovernmental system, principally the excessive number of narrow funding categories, voluminous regulations and paperwork requirements, an emphasis on remediating problems rather than preventing them, and the absence of measurable outcomes.(7)
In late July 1994, DHHS Secretary Donna Shalala and the NPR convened a federal interagency group to hear and discuss the proposal.(8) The interagency meeting involved representatives from the White House, OMB, and secretaries and deputy/assistant secretaries from seven federal agencies.
Interest in the proposal generated by the July meetings spurred efforts to move forward on the Oregon Option proposal. A "working visit" to Portland, Oregon was organized for September 1994. In Portland, about 100 people -- including 40 federal staff from Washington and federal regional offices and 60 state, local, and community representatives from Oregon -- refined a memorandum of understanding, further defined the benchmarks, and began mapping strategies needed to achieve them.(9)
The Memorandum of Understanding (MOU) drafted in September was quickly transformed into a partnership proposal. On December 5, 1994, the MOU, which had already been signed by Governor-Elect John Kitzhaber, was officially signed in a White House ceremony by Vice President Gore, many Cabinet officials, Governor Roberts, and a number of state and local officials. Vice President Gore best captured the spirit of the new commitment:(10)
"This is a day that, from the very beginning, has been part of our vision of a reinvented government ... It was envisioned in one of our original guiding principles -- help communities solve their own problems. This partnership for results that we are entering today with the state of Oregon, and her county and city governments, is exactly the kind of thing we had in mind."
Governor Roberts stressed the impact the new partnership was expected to have on the people, families, and communities of Oregon:(11)
"This is a great beginning on a long, long road toward a new vision... Under this agreement, we will begin our first projects focusing on children's health, family stability and workforce development. Our shared success will mean thousands of children vaccinated, self-sufficiency and jobs for struggling welfare families, and family-wage jobs for citizens with improved job skills. And as we learn from our new improved model of working together, we will move to broader efforts that change the lives of our citizens. The challenges -- and the promises -- are huge."
Six principles encompassed in the MOU guide the partnership:(12)
The Oregon Option partnership is testing a new way of doing business in the intergovernmental system. It proposed to sweep away the traditional hierarchy, a top-down model, to be replaced by partnership. All the partners were committed to making shared investment, sharing the risks, and sharing credit for gains.
In principle, the Oregon Option was not about funneling more money to Oregon.(13) The partnerships' mantra has been boosting effectiveness, not spending. Nor would the agreement grant any new authority to change benefits, or to abrogate fiscal or reporting requirements.(14) Rather, the agreement committed the parties to work together to identify benchmarks, strategies, and measures that provide the performance framework for improving intergovernmental service delivery and to identify and, where possible, eliminate barriers to achieving these goals.
Even before the media attention and bright lights of the MOU signing ceremony, the hard work of translating the words of the MOU into action was already underway. If the signing ceremony was the "icing on the cake", the batter mixing and baking had begun in September during the federal/state/local partnership meeting in Oregon.
The MOU committed the parties in principle to a bottom-up intergovernmental collaboration. The staffing structures created to implement it converted the principle into practice.
Five intergovernmental, interagency subteams, or clusters, were formed around specific benchmarks and cross-cutting issues. The clusters were to develop strategies and changes needed to achieve specific benchmarks.(15) These clusters, the main operational structures of the Oregon Option, included:
The clusters were augmented by a coordinating group (Intergovernmental/Interagency Action Team) guided by NPR's intergovernmental reform expert, Bev Godwin. Active federal participants in the Action Team were drawn from the White House Domestic Policy Council, OMB, and seven agencies (Health and Human Services, Labor, Education, Justice, Commerce, Agriculture, and Housing and Urban Development). The state component, organized by Oregon Progress Board director Duncan Wyse, included all comparable Oregon agencies and some local and private sector representatives. During the initial stages of implementing the Oregon Option, the Action Team met weekly with conference calls to link in federal regional staff in Seattle and Oregon and the state/local officials from Oregon. As action shifted to the cluster groups in 1995, Action Team meetings were held monthly.
Two important changes were also made in Oregon in 1995 to support implementation efforts. The first was the appointment of an Oregon Option director, Connie Revell, who was an active participant from the earliest planning stages of the initiative. Second, Governor Kitzhaber appointed top officials from his staff and cabinet secretaries to an Oregon Option oversight council.
From December 1994 on, the Oregon Option has drawn a great deal of attention. Whether it was front-page articles in The Oregonian and The Washington Post, a meeting of the President's Domestic Policy Council, speeches by the Vice President, a meeting of the nation's governors or mayors, or the second annual report of the National Performance Review, the initiative has been applauded and emulated.
President Clinton, for example, proposed six Performance Partnerships, largely modeled after the Oregon Option, in his February 1995 budget proposal. Connecticut and federal officials created a similar partnership to support urban redevelopment in that state's hard-pressed neighborhoods. Senator Hatfield championed a bill to create the Local Empowerment and Flexibility Act to promote implementation of partnerships with local government offering flexibility from federal regulations and statutes in exchange for improved results. And some members of Congress looked to the Oregon Option as they grappled with grafting performance accountability into emerging proposals to block grant many federal intergovernmental programs.
But the spotlight has not drawn the focus away from the challenge of transforming the Oregon Option MOU into an effective, accountable new way of doing business. All the partners -- federal, state, and local -- can rightfully boast of some hard-earned accomplishments through the first 16 months. In brief, some of these include:
But the Oregon Option, an ongoing experiment, has many more challenges to tackle in the months ahead. Sustaining support through implementation of innovations currently in development, continuing a high level of engagement with key officials and the public, and creating an effective accountability mechanism will all test the effectiveness of this new partnership.
Much of the work to keep the Oregon Option moving forward rests with the cluster groups. The following sections review efforts to develop and implement three human-resource-oriented cluster groups -- workforce development (Chapter III), family stability (Chapter IV), and healthy children (Chapter V).
(1) 1993 Report of the National Performance Review.
(2) Author's interview with Duncan Wyse, former Director of the Oregon Progress Board. December 1995.
(3) "The Oregon Option: Project Status Report", December 5, 1994, National Performance Review.
(4) "Oregon Benchmarks and the Oregon Option: Background Information for Ceremony to Sign Memorandum of Understanding on The Oregon Option", December 5, 1994. Page 4.
(5) "The Oregon Option: A Proposed Model for Results-Driven Intergovernmental Service Delivery", Oregon, July 25, 1994.
(6) "The Oregon Option: A Proposed Model for Results-Driven Intergovernmental Service Delivery", July 25, 1994. Page 1.
(7) "The Oregon Option: A Proposed Model for Results-Driven Intergovernmental Service Delivery", Oregon, July 25, 1994. Page 1.
(8) "The Oregon Option: Project Status Report", December 5, 1994. National Performance Review.
(9) "The Oregon Option: Project Status Report", December 5, 1994. National Performance Review.
(10) From remarks of Vice President Al Gore at the Oregon Option Signing Ceremony, December 1994.
(11) Remarks at Signing Ceremony for The Oregon Option, by Governor Roberts, December 5, 1994.
(12) "Memorandum of Understanding Regarding The Oregon Option", December 5, 1994. "Oregon Benchmarks and The Oregon Option: Background for Ceremony to Sign Memorandum of Understanding on The Oregon Option", December 5, 1994.
(13) "Memorandum of Understanding", See V. Authorities. Also, "The Oregon Option: An Intergovernmental Partnership for Results -- Summary of Proposal", December 1994.
(14) "Memorandum of Understanding", See V. Authorities.
(15) "The Oregon Option: Project Status Report", National Performance Review, December 5, 1994.