Lessons from a recession.

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The recession and a deep drop in state revenues have prompted lawmakers in a number of states to look for ways to retool. The approaches range from consolidating departments to changing how things are done to eliminating agencies.

MASSACHUSETTS

Facing a $3 billion FY 2010 budget shortfall, the Massachusetts legislature this summer approved a plan to consolidate several transportation agencies and authorities into a single streamlined department to save about $6.5 billion over the next two decades. The reform legislation eliminated the Massachusetts Turnpike Authority and Massachusetts Aeronautics Commission, while moving the Registry of Motor Vehicles into the new department, called MassDOT.

"We had myriad different state agencies that handled transportation, and we've merged them all," says Senate President Therese Murray. "They've all been moved together under a single administration, a single board, and we expect in the long run to save money there."

The consolidation took place Nov. 1.

The legislation also created four new divisions under MassDOT, which will oversee, among other areas, the state's highways and regional transit authorities. Still undecided is whether offices from the former separate departments will physically merge.

CONNECTICUT

This fall, the Connecticut General Assembly included a provision in the FY 2010 budget establishing a new independent Office of Administrative Hearings.

The provision, supporters say, could save as much as $300,000 by combining the hearing offices of the Commission on Human Rights and Opportunities, the Department of Children and Families, the Department of Transportation, the Department of Motor Vehicles and Firearms Permit Examiners.

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"The overarching theory is that hearing officers are too stuck on their agencies and that no one really has a steady caseload," says Jim O'Neil, legislative liaison with the human rights commission. "By combining functions, people who do work for DCF could do work for the Department of Transportation and vice-versa. Everyone would stay busy and there would be no backlog of cases."

MICHIGAN

Governor Jennifer Granholm signed an executive order that will consolidate Michigan's Natural Resources and Environmental Quality departments, a move expected to save at least $1.5 million. By some estimates, the state budget gap for FY 2010 is $1.4 billion.

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"Experience has shown us that conserving natural...