Friday, March 12, 2010

Post Budget Speech Analysis "...pretty soon it adds up to real money"

Governor Quinn delivered this speech to the General Assembly, Senate and public at the 5th grade reading level Last year his first address after stepping into the role of governor was at 7th grade level. He seems to be more aware than ever that the public needs to have the message delivered very, very clearly since they increasingly do not trust the words and actions of politicians.

Naturally, he used several old ploys from the old guard playbook: He called the tax increase the state was not going to level a "1 percent surcharge" (it is not a 1% increase but an increase from 3 to 4 percent which makes it an increase of 33% over last year. First, it is not a surcharge, it is a tax. Just as the national Congress and other states have tried to called taxes "revenue enhancements", "investments" (in the country), "user fees" (where nearly everyone is a user), "privatization" (the selling of our parking meters, bridges, toll ways). One of my favorites is from my own university where the slight lowering of tuition increases that had been around 6% for over a decade was called a "reduced increase". Surcharge also implies a temporary action. Is there a sunset law attachment?

A year ago in the midst of a major economic crisis the governor was being "optimistic". He did not act as if the state was in crisis. This year is says he is "realistic". He is certainly slow to change. If the leadership of the state had acted over the past decade to plan and manage more carefully; we might not be facing a 11-13 billion dollar debt. At this point it is unlikely that we can simply grow our way out of the debt with an healthy economy (which we don't have).

It is painfully humorous to note that last November a member of the State's leadership asked the state's legislative research team what zero-based budgeting might be. I guess the legislators don't have access to Wikipedia. From my work as a budget staffer for the Department of Justice in Wisconsin and with a former governor, I have been a fan of ZBB. Former President Jimmy Carter (then an outsider) pitched his outside status as a governor of Georgia who had succesfully implemented ZBB to help his state. If you know what you are doing in state leadership you know that trying a ZBB on all the agencies at one time can be an almost impossible task. It has worked well in stages. However, we may not have the luxury of waiting.

Mr. Bradley proposes the "butcher cleaver model" of budgeting. He asks for a 10% cut across the board. This is bad public policy. Some departments might be eliminated, some might need more revenue, some might be merged to save overhead (universities like Northwestern need to do this - next blog topic). With ZBB you do not assume that any existing program should continue. For years tricky budgeters (including me) have put in small requests that grow as "continuing items" rather than "new items". This is how budgets and programs that are "nice to have" grow and attract sponsors and friends.

I don't think we can use the ideas of Bradley or Quinn to manage the 55.1 billion dollar budget even if they pretend that they can only control 27.4 percent of it. By the way, gaming expansion is not the answer either. Pretty soon, as U.S. Senator Ev Dirksen said (there is some debate) " "A billion here, A billion there, pretty soon it adds up to real money". (