February 13, 2014
Restructuring. Streamlining. Eliminating
waste, fraud, and abuse. A top-to-bottom review.
Over the last
five years, we’re heard it all -- again and again and again.
The Great
Recession induced the creation of dozens of blue-ribbon panels charged with making
state governments leaner. The list included the Commission on Privatization and
Efficiency (Arizona), the State
Government Reorganization Commission (Iowa), the Senate Government Management
and Cost Study Commission (Pennsylvania), the Commission on Streamlining
Government (Louisiana), the Legislative Commission on Government Efficiency
(Michigan), the Spending and Government Efficiency Commission (Nevada), the Budget
Planning and Management Commission (Ohio), and the Government Reform and
Restructuring Commission (Virginia).
At the hearings
and press conferences, the talk was tough. Final reports were often voluminous,
concluding with detailed recommendations.
It was good
stuff. Hopeful, even. But it’s now clear that at the broadest level, as catalysts
for meaningful, lasting corrections, the commissions were clunkers. Nothing
much has changed. Data compiled by the National Association of State Budget Officers show that the “laboratories of
democracy” did not reduce expenditures:
2008 $1.48 trillion
2009 $1.56 trillion
2010 $1.62 trillion
2011 $1.67 trillion
2012 $1.64 trillion
2013 $1.72 trillion (estimated)
Significant labor-productivity
improvement has proved illusory, too. According to the U.S. Census Bureau, the
number of full-time-equivalent
state employees did not decline (estimates for 2012 and 2013 are not yet
available):
2008 4.36 million
2009 4.41 million
2010 4.38 million
2011 4.36 million
It’s a grim
postmortem. Most commissioners were sincere and diligent. They homed in on many
promising reforms. But appointees, unlike legislators and governors, do not face
voters. The Obama administration’s “stimulus” served as a conduit for federal
revenue to flow to the states, and pols eschewed reelection-risky cuts. Washington’s largesse
buttressed the spendaholic status quo until the economy reversed its freefall,
and drifted up to a tepid expansion. The
Wall Street Journal reports that
“growing revenue and mounting surpluses have states putting the recession
behind them.” Expenditures, particularly by the education monopoly (“universal
preschool”) and welfare complex (Medicaid), are likely to return to their
pre-Great Recession rate of growth.
The failure of
budget-revamp commissions should teach the pro-taxpayer community a lesson: Making
government -- at any level -- smaller, cheaper, and more accountable shouldn’t
be confined to an occasional extravaganza. Pressure must be applied constantly,
to every branch, by indefatigable elected officials, credible wonks, and
politically savvy activists.
It’s not as if
new material isn’t constantly generated by the people who scrutinize bureaucracies
for a living. Ironically, the kind of digging done by “streamlining”
commissions is already the job of the loneliest men and women on state-government
payrolls: auditors. Some have stand-alone offices. Others are staffers for
secretaries of state, legislative committees, or comptrollers. But capitols’ green-eyeshade warriors generate
a monotonously reliable flow of disturbing findings. In recent months:
• New York auditors exposed what
the (Albany) Times Union called “more
than $1 million in questionable paid leave expenses” at the University at Albany. In addition, investigators
disclosed that the “State University
of New York system never implemented findings recommended 22 years ago to
ensure paid leaves for faculty actually benefited the campus.”
• Excessive
prize payouts were uncovered in a performance audit of Colorado’s lottery. In addition, The
Denver Post noted, “as most
state workers between 2009 and 2012 were enduring pay cuts or freezes, bonus
payments to lottery employees ballooned nearly 500 percent.”
• West
Virginia legislative auditors found problems with their state’s “Rural
Rehabilitation Loan Program,” including possible conflicts of interest, no
formal approval policies, widespread borrower delinquencies, and inadequate
collection efforts.
• In what the
Deseret News reported was said to
be its first performance audit “in its 92-year history,” internal controls were
found to be poor at the Utah Division of Rehabilitation Services. The findings
were “particularly concerning because the division expends millions of state
and federal dollars annually.”
• Connecticut’s
auditors issued
a blistering examination of the Department of Public Health, revealing, among
many other blunders, drugs for tuberculosis and STDs “expired or unaccounted
for” and a contract-management process that “results in duplication of effort,
delays in processing, disputes between operating units, and customer
dissatisfaction.”
It’s natural, one
of the Enlightenment’s brightest luminaries observed, for liberty to give
ground to government. State budget commissions,
however respected and high-profile, lack the authority to enact their prescriptions.
The appointees go back to their regular jobs, while the world of policy and
politics remains largely untouched.
Propitious in
theory, impotent in practice. Establishing a commission isn’t the answer to
right-sizing state government. We’ll have to do better.
D. Dowd Muska (www.dowdmuska.com) writes about government, economics, and technology. Follow him on Twitter @dowdmuska.
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