Growth & Justice Blog

Less Government? We Tried That. It's Not Working.

The Star Tribune's front-page story today finds that "less government'' is the overwhelming consensus "vision'' for Republican gubernatorial candidates. Peggy Lee and most Minnesotans want to know: Is that all there is?   

Leaving aside that this mantra sounds more like hard-right, activist-energizing radio talk than inclusive vision casting — and has to be extremely disappointing to hundreds of thousands of moderate and progressive Republican voters — we need some context here.   

The Price of Government, an official state Minnesota Management and Budget measure, shows that we DO have less government over the last decade, ever since the no-new-taxes religion, like some southern invasive species, got a hold on the North Star State. (See page 13 of the PowerPoint presented at the capitol last week by State Economist Tom Stinson and State Demographer Tom Gillaspy).

The bar graphs clearly show that our governments are using about two percentage points less (15.5 percent in 2008 compared to about 17.5 percent through the 1990s) of our personal income share than those governments were spending when the economy was actually doing better. Huge income tax cuts in 1999 and 2000 left us with chronic  budget crises, and the promised payoff in sustained, tide-rising economic growth didn't materialize, either.  

Wealth concentration at the top got worse, bridge and road conditions deteriorated, public school course offerings were cut, and thousands of working low-income folks lost their health care. And our economy is slumping and beginning to underperform the national average on some key indicators.  

We surely could use some more judicious restructuring and redesign of how we do our government work. But the basic things government provides are essential for our shared prosperity and quality of life.  

NOTE: The Price of Government measure is one of the most comprehensive of all the measures we have to describe the size and role of government. It counts state and local government revenues as a percentage of total income and therefore accounts for inflation, population growth and economic growth. It was instituted at the behest and with the approval of business groups in the late 1980s.

— Dane Smith

What's the Matter with Alaska?

SEWARD, AK — So the very conservative Alaska Legislature, too often prone to bashing government and the federal government in particular, did the right thing last week and overrode former Gov. Sarah Palin’s veto of some $28 million in federal stimulus money. This provoked the erstwhile governor to say on her Facebook page that she had vetoed the energy assistance part of the stimulus because it would "further tie Alaska to the federal government."    

Nosirree, wouldn’t want that, even though the federal government has been very, very, very good for Alaska and Alaskans throughout 50 years as a state, and long before that, going back to the federal purchase of the Great Land in 1867.     

Despite this fairly obvious reality, far too many Alaskans are infected with a libertarian self-righteousness and a contempt for government in general. The vastness of the place feeds an illusion of individuality and self-reliant independence, but no state is a bigger per capita net beneficiary of federal spending, and this despite the state’s preponderance of revenue from royalties on oil extraction. Per-capita federal spending in Alaska amounted to more than $12,200 per person in fiscal 2003.

This government action has mostly been for good.

[View from the state-run Alaska Railroad]

The government built the Alaskan Highway and the Alaska Railroad (taking over the latter from a failing private effort a century ago), without which habitation and economic development would have been impossible. The state government now runs the railroad at public expense and it’s a pretty impressive operation. For decades, the state's lifeblood has come from federal investment in defense and military installations and natural resource stewardship, plus construction of all manner of infrastructure from airports to harbors to sewer service.  

Growing up in Anchorage in the 1950s and 1960s, I remember having to fill out a "federal impact statement" every September. Since statehood (I remember the bonfire in Anchorage when Congress approved it), this largesse has flowed to the state far out of proportion to its population.

And the pipeline is still open. Remember the infamous Bridge to Nowhere, which became the emblem for earmark abuse, was destined for Ketchikan, Alaska.

Alaska might actually benefit from a less dictatorial federal bureaucracy and from placing a little more of its land and resources in private hands. But its long-term economic health also depends primarily on the appeal of its magnificent public wilderness to tourists from around the world.

The captains of industry do not have a sterling record of preserving and investing in that resource. A fascinating account by Alfred O. Quinn, "Iron Rails to Alaskan Copper," documents how the Guggenheim interests extracted $200 million worth of copper from Alaska between 1912 and 1938, and then deserted the state when profits declined. Native tribes and communities in Prince William Sound are still waiting for delivery on the promise to make them "whole" after the Exxon Valdez spill 20 years ago. 

The federal government doesn’t work that way, thankfully. It’s here for good and does good for the most part.

As a proud former Alaskan, I’m also proud of my federal government’s responsible and far-sighted tending of this great land and its people, no matter how obtuse some of them are about the good their government does.

 — Dane Smith

Hollowing out the public sector affects public safety

Our continuing and increasingly dubious experiment with starving the public sector in Minnesota is producing almost daily reports of questionable budget cuts.   A Star Tribune front-page story on disappearing lifeguards at public beaches is the latest manifestation of our increasingly penurious fiscal policy.    Anti-government conservatives like to claim that much or most of government investment is unnecesssary or superfluous, and that all we really need are military forces, courts and police to protect property.   But it turns out that a relentless ratcheting down of public investment affects public safety in myriad ways:  crumbling bridges, less attention to mesothelioma incidence in northern Minnesota miners, Local Government Aid cuts that force police and emergency service layoffs, hospital reimbursement cuts that hamper emergency rooms in the midst of an ongoing swine flu pandemic, and on and on.    Public safety is a primary responsibility of our entirely legitimate and mostly effective state-and-local government systems.    Most of the things those governments do eventually have something to do with public safety and providing for the "General Welfare," an often overlooked primary goal that is spelled out in the United States Constitution.    And these systems can't be funded without fair and ample tax revenues.

Dane Smith

Minnesota compared: Colorado and the allure of limits

As the Minnesota Legislature struggles to close a gaping revenue shortfall, I'm in Colorado watching how another set of lawmakers attacks the same problem.

The two states are similar in size, ethnic makeup and per capita personal income. They are weathering the recession better than many others, but are dealing with the harsh fact that a contracting economy shrinks revenue at the same time it increases demand for government services.

So it’s not surprising some of their budget-balancing efforts look similar, too.

They’ve both searched out one-time infusions beyond federal stimulus dollars. (Colorado is testing whether it can draw upon reserves in the state-founded workers comp insurance company, and Minnesota has proposed borrowing backed by tobacco settlement revenues.) Lawmakers in both places consider rescinding hundreds of millions of dollars in tax credits and exemptions — called tax expenditures — that divert money that would otherwise flow into the tax system.

And, Democratic Gov. Bill Ritter, like Minnesota Gov. Pawlenty, has been raising fees, which may look like taxes but — like all these other measures — don’t constitutionally quack like them.

In fact, the greatest similarity may be this urgent pantomime of raising enough revenue without appearing to raise taxes. The main difference? Colorado is constrained by constitutional amendment; Minnesota, by a tax-averse governor.

Strict revenue limits and no-tax pledges were enabled by a growing economy that supplied sufficient public dollars without the states having to face severe consequences… until later.

Colorado went furthest in imposing what the state’s Bell Policy Center calls “the most restrictive tax and spending limitation in the country” — TABOR, the Taxpayer's Bill of Rights. Designed to hold down taxes and shrink government, TABOR requires voters to approve tax increases that exceed a certain formula of growth. About 90 percent of revenues are dedicated, leaving little room to deal with changing conditions. Fed up with how the state was shortchanging education and transportation, Coloradoans have twice voted to loosen TABOR’s revenue straightjacket.

An inflexible, rule-based approach appeals to those who want the pre-emptive accountability of a bathtub-sized limited government. But it has little to offer the majority who have a broader definition of accountable government. They want the overall tax burden to be distributed fairly and expect spending programs and tax breaks to deliver their promised benefits.

On paper, Minnesota’s more flexible accountability framework looks pretty good.

The Legislature enacted a law in 2008 to revive the Minnesota Milestones established by Gov. Arne Carlson in the 1990s that mark progress against long-term goals for the state, and now there’s an Accountability Minnesota website that reports on the milestones by category and agency. Many legislators from both parties also have initiated goal-setting and accountability initiatives in the Legislature.

But reporting on progress against long-term goals and high-level priorities is only part of holding government accountable for results. The real test of these principles comes at budget time when dollars are scarce and choices must be made.

The scrutiny forced by scarcity can be healthy. For example, both states are finally taking a serious look at whether tax expenditures actually achieve their intent, and how they tend to benefit businesses and higher-income taxpayers over those whose benefits must go through the appropriations process.

According to a recent Public Strategies Group report, “Minnesota’s Bottom Line,” [Download pdf] regular legislative review is already required to evaluate the cost, effectiveness and fairness of this $11 billion in “hidden spending.” Yet cost is the only aspect publicly reported by the Department of Revenue.

And that’s a general shortcoming. Measuring cost is relatively easy, since expenses are routinely captured in the system. Determining effectiveness is more difficult and costly, particularly when the greatest payoffs come from education, health care and transportation systems that deliver value over the long term.

Minnesota needs to know what works as well as what things cost. It’s the most fiscally responsible way to govern and the only way to ensure government can deliver what we expect. 

The apparent simplicity of rules that limit revenue and formulas that disperse money has some appeal in a complicated and changing world. But it’s not the way to manage for results. Maddening as it may be to muddle through this year and push some problems into the next, Minnesota is on a better path  — provided we continue to emphasize fairness and effectiveness, guided by facts and a long-term vision for Minnesota.

— Charlie Quimby 

Unenforced regulation benefits no one

Spending some quality time in another state inevitably invites comparisons back home. Nearly every day, I read a story in the Colorado press that evokes a comparison with Minnesota.

The story that prompted this post describes a suit against the Colorado insurance commission and department of public health:

State officials have allowed nursing homes to operate without insurance in violation of state law, leaving vulnerable residents without recourse when they are abused and neglected, lawyers charged in a lawsuit filed Friday.

Colorado state law requires nursing homes to have liability insurance. When the industry complained that the required $3-million policies were getting too expensive, the department of health adopted a policy allowing the homes to self-insure if they submitted affidavits to the insurance commission stating they had set aside up to $1 million to handle claims.

The lawsuit claims at least one company with a poor record with regulators submitted false information to the state, which did nothing to verify it. The suit asks the courts to require the state to make sure the homes are properly insured.

Stories like this raise broader questions about whether regulation is working the way it should, as well as arguments that government should not be regulating so many aspects of business operations.

The anti-regulation screed sounds something like this: "This is just one more example of a nanny state failure. Regulation adds to business costs and doesn't actually protect consumers who assume the government is taking care of a problem. Citizens would be safer if they took responsibility for their own affairs, instead of trusting government to regulate private businesses."

When small government advocates look for places to cut "non-essential" government services, this sort of regulation might well be on their list.

It certainly sounds like an agency fell down on the job — at least to the extent it trusted a national company to file truthful reports. We also know Colorado is one of the lowest-spending states on a per-dollar-of-personal-income basis, and in 2006 it ranked last among states on spending for public welfare. Presumably, officials in state agencies have to prioritize where they will spend their limited dollars. Monitoring compliance with insurance regulations may seem like a lower priority than making sure all patients are being taken care of appropriately.

If the company named in the suit was indeed skirting the liability coverage regulations, what other corners were being cut? And how do we know those shortcomings will come to light?

Starving government starts with starving inspections and audits that show taxpayers their dollars are being well-spent. Then, when problems surface, that's used as an example of how regulation isn't working and should be abolished.

But what's the alternative? If an underfunded agency can't verify a company was properly insured, how will individual consumers make that determination? How efficient is it for companies to handle individual queries that could be handled on a statewide basis? And what are the costs to society if "the marketplace" doesn't self-regulate?

These questions are not just about this specific issue of nursing home liability insurance. They apply broadly to the roles we want government to play on our behalf and what happens when we set the expectation without funding the follow through.

Finally, I wondered, does Minnesota require similar liability insurance coverage or reserves to handle claims? Speaking as a member of the general public, I can't easily tell whether state agencies or the nursing home companies have addressed this. And speaking as a taxpayer, I don't know how much those assurances would be worth to me.

[Note: Lee Egerstrom of Minnesota 2020 comes at insurance regulation from another angle, how closely the state reviews insurance products offered to consumers.]

— Charlie Quimby

Put Federal stimulus dollars to work for our students

The American Recovery and Reinvestment Act (ARRA) has a lot to say about the value of education. Now the question is how Minnesota will get the most value from its share of the money.

Nearly 13 percent of the overall federal stimulus package — about $100 billion — is directed to education. That amount is nearly double the U.S. Department of Education’s annual budget.

The newly-minted secretary of education, Arne Duncan, appears ready to be a prudent steward of these unprecedented dollars. Secretary Duncan has built in several methods for establishing transparency, accountability and results. When applying for ARRA funds, state governors must specify how they will address key reforms, provide baseline data, demonstrate record-keeping and transparency, plan for improvement and provide evidence of progress.

Around half the stimulus money ($53.6 billion) is in State Fiscal Stabilization Funds (SFSF) directed at keeping and restoring education-related jobs. This is a wise move. Adding unemployed public sector employees on top of unemployed private sector employees is no help to our current economic situation. These stabilization dollars will first be used to back fill any cuts in K-12 and higher education that states have had to implement. 

About $25 billion is directed at increasing special education/IDEA ($12 billion) and Title I ($13 billion), which will be allocated over the next two years. These additional funds nearly double the federal government’s current allocation to these programs. The remaining $36 billion or so will be distributed through federal government formulas and higher education tax credits and Pell Grants.

The Pawlenty budget: what it doesn’t do that federal stimulus does

What this means for Minnesota, according to the latest release of figures on state allocation [Download PDF], is that our state stands to see $1.135 billion dollars in federal aid — about three times what we received in 2008. The bulk of this will be $816 million in new money for state stabilization — which will go through the governor’s office. Another $200 million will go to special education, and about $95 million will be distributed to local districts in the form of Title I aid.

U.S. governors are increasingly driving their state education agendas. The ARRA money creates a new tension between the governor’s office and the federal role, since the state fiscal stabilization funds are received based on a governor’s application — which would likely reflect the governor’s agenda. 

Gov. Pawlenty has already spelled out his education agenda in his budget proposal, “Transforming Minnesota’s System of Education” [PDF]. He calls for: transforming the system of education; recruiting, retaining and retraining effective teachers; and utilizing innovations for improving student achievement. And, he has asked for $188 million in additional dollars from the legislature to advance his agenda.

While we welcome his affirmation that our economy will increasingly be dependent on skilled workers and his move to invest more in our state’s education systems, there is not much of this modest amount directed at Minnesota's students.

Instead, the governor will assign the majority of his “transformative” dollars to testing and professional development for teachers and principals.

So, what about our students? Less than $10 million (about 5 percent) would go directly to students — in the form of a summer school program for 8th graders struggling in math.

Some important areas of investment are missing from Gov. Pawlenty's new budget:

• Readying young children for school success — even though we know we get the greatest return on our investment by starting early, and by starting early we increase the likelihood of students reading well by the end of 3rd grade.
• Providing rich learning environments in and outside school that challenge student thinking, promote learning by doing, provide higher-order thinking skills and develop engaged learners and engaged citizens.
• Encouraging best practices in curriculum that have proven to move students from below proficiency in math, reading and science to above average and college-ready.

Minnesota should be thankful that the federal government is providing crucial supplementary aid to support the governor’s agenda with funds for teacher effectiveness, funds for data systems that track student progress over time, and funds for raising standards that are aligned with higher quality and meaningful assessments.

But those investments don't very directly address these realities. One fourth of Minnesota’s students are not proficient on the MCA –II in 3rd grade reading. Almost half (46 percent) are not proficient in 8th grade math — even though No Child Left Behind requires that all students take and pass Algebra I in 8th grade by the year 2013. And what of the 34 percent of Minnesota’s students who need remedial instruction in their first year of post-secondary education — costing the student an additional year of high-rate tuition, plus moderate state aid to fund the classes?

It is clear that the governor’s budget aims at holding the education system accountable for outcomes. But where is the investment in Minnesota’s students that will have a strong impact on those outcomes?

What districts can do

Local education agencies and districts can make the most of unbudgeted ARRA stimulus dollars by making discretionary use of Title I monies to invest in best practices shown to improve student outcomes.

Growth & Justice has worked with state and national scholars and economists to develop a list of proven and promising practices that "work best at the best price.” (See the table below with links to more information.) These will move the needle by addressing the whole student — in- and out-of-school, from 3 years old to the end of high school, and encompassing social and financial as well as academic needs.

In this list, educators may see practices they have already established in their districts and would like to expand, or practices they have wanted to implement but have not had the funding to do so. We hope educators will act swiftly, judiciously and with student improvement in mind as they move to take advantage of this historic opportunity to “reinvest” in our students.

— Angie Eilers, Research & Policy Director

Cost Effective Interventions to Increase Student Achievement

Prenatal to Age 4
Nurse Home Visits
Financial Assistance to broaden access to quality childcare 

Age 4 to Grade 3
Chicago Parent-Child Center

Elementary School
Success for All

Middle to High School
Advancement Via Individual Determination (AVID)
Achievement for Latinos through Academic Success (ALAS)

High School
Talent Development High School
First Things First

Out-of-School Time
Big Brother/Big Sisters
Check and Connect

Transition to Higher Education
Admission Possible
Talent Search
Financial Access/need-based aid

Consumer demand isn't the only reason to put public records online

The Sunshine Week 2009 Survey of State Government Information found that for 20 types of records it deemed of broad interest to the public, Minnesota made 13 available for free online [Download list by type], putting the state slightly above average. Texas was the only state that provided all 20 types of information and Mississippi ranked last, with four.

The Star Tribune's headline on a story about the survey — "Survey: 65 percent of Minnesota government records online" — is misleading, since the sponsors certainly did not measure all types of records, and 100 percent of all records would hardly be a desirable goal. As Doug Neville, a spokesman for the Minnesota Department of Public Safety, said, "If we were to take everything we do and put it online, it would be harder to find that information."

Most Minnesota consumers might not feel left in the dark by the state's failure to post gas pump overcharge records or by the lack of a state database of consumer complaints. Availability of child care center inspection reports may be of intense interest to a few taxpayers and of no value to many others.

But taxpayers should care that we can't yet access an online database of state expenditures — or, as a previous study by Good Jobs First found, that Minnesota ranked “dead last” on public disclosure of state contracts. Since we have to make choices about where to invest public resources and staff time, it should be in the comprehensive systems that make government more accountable overall. 

We're getting there, but as I wrote when the Good Jobs First study came out:

Making information more accessible to the public is only a small aspect of developing a culture of fiscal discipline and accountability. The really hard work, which no state does very well, is ensuring that public dollars are spent to achieve specific outcomes and holding government bodies accountable for what we expect them to achieve.

Sunshine Week is not the end of sunshine activities in Minnesota. The Minnesota Coalition on Government Information will be the host for the 2009 Freedom of Information Summit in Minneapolis June 5 and 6.

— Charlie Quimby

LGA and tax rankings can be deceptive

Real disparities among communities will be a major topic of discussion as legislators and the governor wrangle over local government aid (LGA) in the coming months. Some cities will no doubt be held up as poorly managed and leaching off more "successful" communities.

A story this weekend illustrates why it's not helpful to the debate to simplify the issue down to "Chaska, frugal" and "Minneapolis, profligate."

Chaska residents paid the least per capita in city taxes — $184, compared with the Minnesota-wide city average of about $500 per resident, according to a story in the Star Tribune. My own suburb, Golden Valley, ranked in the bottom 10 in the state, at $746 per capita. The costs were figured by combining the cities' tax levies and LGA and dividing by number of residents.

Since the two cities are roughly the same size, both well-governed, good places to live and receive essentially no LGA, I thought I'd take a quick tour of their financial statements to see what accounts for the disparity. (I compared 2006 numbers on revenues and expenses, since those reports were most immediately accessible, so these comparisons won't align precisely with the 2008 data reported in the Strib. [Golden Valley PDF] [Chaska PDF])

The story quotes Lena Gould, a policy analyst for the League of Minnesota Cities, as saying the per capita figure is an indicator of local government efficiency. Well, maybe. Though this is hardly a deep analysis, it's fair to say that this ranking should not be taken as the story's headline suggests: "Chaska, thy name is frugal, in city taxes list."

It's true that Golden Valley raises more than twice the amount of revenue from property taxes that Chaska does, but its tax base is 27.2% commercial and industrial compared to 15.8% in the more rural suburb, so the impact on households is muted. (Both cities have higher than average commercial/industrial development to diversify the tax base.) Chaska benefits considerably more from restricted operating grants and capital grants that are often attached to development activity.

Chaska has a median age ten years younger, with larger average households, which means more of those "capitas" are children, not tax payers. And it has other advantages. Some of its success may be traced back to continuing some of the vision from the planned community of Jonathon and its relative lack of legacy costs that go with being a still-growing community. Chaska also has a revenue stream from its city-owned electric utility that contributed more than $2 million in "franchise taxes."

Golden Valley, as a first-ring suburb, is built up and hemmed in. Its homes have a higher average market value.

When you compare expenses, the two cities had essentially the same total costs for government activities in 2006, with Golden Valley expending more for public safety and public works for the year and Chaska spending more on economic development; it was also carrying more debt.

All these factors make the straight levy/LGA comparisons deceiving — not just between the two suburbs, but any cities on the list.

A new website called Thank LGA has just launched to weigh in on the side of maintaining LGA.

Another useful comparison in the Citizen League's 2008 Residential Homestead Property Tax Profile, which calculates the effective tax rate on a community's average value home. By that measure, Golden Valley's 1.272% ranked 7th out of 117 metro-area communities and Chaska's 1.131% ranked 33rd out of 117 — lower, but hardly the best in the state.

— Charlie Quimby

Accountability is essential to a government that works

In his inaugural address, President Barack Obama said: “The question we ask today is not whether our government is too big or too small, but whether it works.”

It’s question state and local leaders in Minnesota must ask, too.

Minnesota citizens hold state government accountable for many of the public outcomes they care most about — quality education, good jobs, clean air and water, safe and reliable infrastructure, affordable healthcare and accessible public spaces.

But the truth is, we don’t have comprehensive ways to answer whether policies in those areas are working as well as we expected or are delivering sufficient bang for the buck.

More than ever, the public demands better performance and more accountability for results. Yet the realities of funding and delivering a wide range of services — through a complex, multi-layered web of providers to diverse constituencies — almost defy effective management, oversight and comprehension.

So we citizens tend to judge government’s performance by anecdote, cherry-picked statistics and isolated example — all seen through a veil of ideology, special interests and changing events. And when people can’t easily understand or trust information about how government is performing, the political climate encourages them to assume the worst.

An example of this distrust — or more positively, the cry for long-term accountability — can be seen in passage of constitutional amendments that dedicated state sales taxes to transportation, environment and the arts. Ballot measures to allocate or limit spending are a weak substitute for effective management of public assets. But absent a fiscal framework that inspires confidence and delivers the outcomes taxpayers want, voters will go with what they can get.

Budget review should look at more than dollars

With the state facing a massive budget shortfall, the discussion will inevitably focus on size — whether revenues are sufficient and which expenditures have priority. We can see the governor is heading toward tax cuts and program cuts. But lawmakers should not only look at program dollars. They should also ask whether budgets provide the ingredients to succeed, to reliably assess performance and to hold the right players accountable for future results.

Earlier this month, the state Budget Trends Study Commission offered recommendations supporting more informed budget and policy decisions. It was striking how much of its advice echoed eight prior fiscal advisory groups going back to 1984, and how much had been inconsistently implemented or ignored since then. 

Eleven months ago, a group of  state legislators outlined a set of principles and proposals aimed at better linking connecting policy goals, funding and results. The ideas were drawn in part from work on “governing with accountability” in progress at Growth & Justice. [Here's the report we produced in March.] The response from the news media and the public was somewhere between a yawn and silence.

But let’s assume that the current crisis finally has refocused  our attention on making governments work better. What would be required to tackle this?   How about these guiding principles, for starters?

Principles for governing with accountability

1. Leadership Commitment. It’s motherhood and apple pie to say accountability starts at the top of an organization. The challenge is establishing it long term in an environment where power is distributed between parties, policy goals compete and legislative and executive leadership roles can shift with political winds. However leaders may differ on specific programs, they should reach consensus on governing with accountability as an enduring commitment. Now would be a good time to start.

2. Long-term outlook and clear priorities. Partisan concerns are best transcended by raising our sights to agree upon a long-term vision for the state and the key indicators of success. Each year, we should report on our progress and set annual priorities for closing the gap.  Follow-through on innovations and cost-saving opportunities too often fails when improvement efforts are not part of a larger, ongoing accountability framework.

3. Straight talk and open books. As anyone who has navigated the state’s financial reporting can attest, budget transparency isn’t the same as clarity. Bottom line, the public wants to know total cost of government, coupled with an honest assessment of how it is performing. A useful accounting must be fact-based, avoid gimmicks and include both direct expenditures and tax expenditures (which lower revenues through exemptions, deductions and incentives).

4. Fiscal responsibility. Consistent budget practices, asset stewardship, accurate cost projections and broad, fair taxation foster the revenue stability needed to provide effective and reliable services. As the Budget Trends Study Commission said, this is harder than it looks. The place to start is agreement on a strategic management framework and maintaining consistent practices over time.

5. Efficiency and effectiveness. No one, inside government or out, loves bureaucracy, red tape, duplication and waste. The governor has championed a “Drive for Excellence” initiative that adopts ideas of business enterprise transformation to streamline operations, and all levels of government have been chipping away at costs and becoming more customer focused for years. But there’s still plenty of room for improvement, especially in the area of increased empowerment, flexibility and incentives that encourage performance and accountability of public employees. 

6. Accountability for results. We like to talk about elected officials being accountable, but day-to-day, public services and other policy outcomes are delivered by a network of agencies, private service providers, non-profit program operators and various beneficiaries of subsidies and incentives. Governing with accountability makes all of these players accountable for delivering the results for which they received public funds.

By more rigorously defining policy intent, specifying expected outcomes and public benefit, and linking results to fact-based indicators, legislators and administrators have better ways to judge whether initiatives are working — and whether they should be revised or eliminated.

That’s a lot to take on in the midst of a budget typhoon. Probably the best we can ask this year is that lawmakers keep these principles in front of them as they make tough decisions.

But until the state better addresses the gaps between intent, implementation and outcomes, we can look forward to repeating this unpleasant cycle again and again.

— Charlie Quimby

Fixing Minnesota's Budget: Don't take more income off the "kitchen table"

As it became clear the state was facing a profound budget shortfall, I braced myself for a hoary scene to be propped before us repeatedly in the coming months. Right on cue, its first official appearance for 2009 came in Gov. Pawlenty’s state of the state address.

Yes, it’s ma and pa at the kitchen table, back for another go at the family budget.

On the table are bills, notices and a notepad with a budget that's tighter than it's ever been. Hope and fear are also at the table.

If the kids weren’t already put to bed, I’d half expect Tiny Tim to enter, lay his crutch across the table and deliver the governor’s lines:

Please don't add to their burden by increasing their bill from government.
 
Please don't take more of their hard earned money.
 
Please don't raise their taxes.

I don’t mean to make light of real families facing real financial challenges, but this beloved GOP set piece is calculated to appeal to our emotions. It does not illustrate the common sense of the “typical Minnesota family” or realistically portray their approach to financial management.

Most Minnesotans understand that a budget is composed of income as well as expense. A real family facing a real budget squeeze would not just cut the frills, darn the socks, eat more ramen noodles and turn down the thermostat.

Most people would also consider trying to find more money.

I happen to know members of struggling households who have gone out and found temporary and part-time work, even in this economy. They’ve become more resourceful in using coupons; they’ve taken in roommates, shared rides and baby sitting; they have each other over for dinner; they hock some non-essential possessions. They sell plasma. And yes, they visit food shelves and make use of government assistance.

Most of these measures are not much more fun than the cost cutting, but their effect is to put more dollars on the table to keep life going at a reasonable level.

There are some other cracks in this rhetorical diorama.

For example, the mom and dad are always alone — unless you count the spectral revenuers gathering outside their door. I’m all for self-reliance and plucky independence, but Minnesota didn’t get to be a great state simply by everyone solving tough problems on their own. Some challenges take a village, and some require the involvement of a whole nation.

Also note in the scene how we’re encouraged to envision a mismatched dinette set piled with overdue bills, and not a polished granite counter top set with a gourmet meal. Who is advocating “increasing the bill from the government” for families on the edge of solvency? But not everyone in Minnesota is hurting, and those of us feeling the least pain also happen to be paying a lower effective tax rate than the folks being portrayed.

And finally, if we transport the kitchen table to the capitol as the governor suggests, his metaphor becomes nonsensical, because he proposes cutting taxes as part of his solution. In ma and pa terms, that means one of their first priorities would be asking their employer for a pay cut!

Let’s agree with the governor that solving our budget imbalance will require resetting priorities and doing some things differently. The next two years will be no picnic. But let’s not buy the version of kitchen table “common sense” that only takes money off the table.

— Charlie Quimby