Thursday, April 17, 2014
Almost every day we hear some politician or talk show host griping about welfare abuse or oversized social programs. "Government is larded with waste, fraud and abuse," they bellow.
The people who enthusiastically agree believe that the world's problems will be solved by making government go away. Another group thinks that's crazy, having fallen almost hopelessly in love with the power of government to employ people, fix every inequity and resolve all our social ills.
The rest of us don't really love or hate government very much. We appreciate how many great teachers are out there helping our kids move forward. We value the long hours and tough jobs of firefighters and the police, and the many people who work in town hall or state agencies because they care. We want government to competently and efficiently run schools, keep us safe, maintain a good transportation system and offer a safety net for the most vulnerable among us.
As a small state with an aging population, how we deploy our limited public dollars is a very big deal. We have to be frugal and efficient, of course, but we also have to make smart investments in the future. We can't grow the economy without a good education system, for instance, or solid infrastructure and robust business development.
Unfortunately, we have limited ways to pay for those things. Raising taxes any further will make us less competitive with other states. Wholesale cuts in big social programs will leave too many people out in the cold. That leaves us with only two options: Make government much more efficient and establish spending priorities.
We've been avoiding those tough decisions and masking our spending problem for a long time. Even though the state constitution requires a balanced budget each year, we haven't had an honest, balanced budget for much of the last decade, and probably longer, thanks to a deep well of artful budget gimmicks.
We've used hospital and pension payments like cash advances from credit cards. Pushed operating costs forward to take them off the current year's books. Leased new office buildings rather than build and own them at a lower cost. Sold assets like the liquor contract at fire sale prices. Then, each year, celebrated our "balanced" budgets.
The current governor, finding the bag of tricks nearly empty, has resorted to another more time-worn approach: shifting costs to towns so property taxpayers pay the bill and local officials take the heat.
If you'd like to try that at home, just follow these simple steps. First, make all your December payments in January, so it looks like you only have 11 months of expenses this year. Next, sell your house to a friend and lease it back for 30 years. That would give you lots of cash to spend at the casino. Then, max out all your credit cards on those great cruises. Finally, send some of your bills to your relatives while you look for the nearest exit.
I never appreciated the scope of this problem until I co-authored a small book in 2010 called "Reinventing Maine Government," which took a hard look at government spending in Maine and compared us to similar rural states across the country. The results were sobering. We spend 13 percent more of our income on government than the national average and 19 percent more than similar rural states. To make matters worse, we spend it on the wrong things.
We've developed a bad habit of attacking a weak economy with programs that help people survive poverty without a similar emphasis on creating new jobs so they can lift themselves out of it. We've also protected large parts of state government and education from any real modernization that might reduce payrolls anywhere.
As a lifelong Democrat, I take no joy in saying these things. They just need to be said.
A smarter government isn't all about cutting things; it's about redirecting resources to intelligent investments in a new prosperity. We've made big investments in K-12 education over the last few decades, for instance, and it's beginning to show good results. But we spend almost 20 percent below the national average on higher education and community colleges. We also spend less than just about anyone else, ironically, on economic development.
Why does all of this matter? Because unless we get our spending under control and free up resources to invest in Maine's next economy, we can expect another decade with a flat or declining economy, with more people struggling and even more leaving.
Alan Caron is the president of Envision Maine, a nonpartisan organization that promotes Maine's next economy. He is also a partner in the Caron & Egan Consulting Group, which advises companies, governments and nonprofits on strategic planning and communications. He can be reached at firstname.lastname@example.org