Saturday, May 8, 2010
How to Cut State Government
Gus Murphy of Brooklyn had written to our local newspaper, the Olive Press, asking how to cut government. Here is my response:
Gus Murphy asks for specifics as to how to cut government spending (May 6) and the Wicks Law is one of many.
30-50% of New York State's budget is waste. Medicaid and other health-related fraud amounts to billions. A nurse at the Kingston/Rhinebeck Tea Party told me that in her opinion nearly half of Medicaid spending is for waste. Until this year New York's per capita spending on Medicaid was double that of California's. If she is even half right, the savings from Medicaid fraud and waste alone amount to ten percent of the state's budget.
One national statistic is that the average public sector employee's pay is $39.22 per hour and the average private sector employee's pay is $27.42 per hour. How about if public sector employees, starting with school teachers, earned parity with the equivalent work in the private sector using comparable worth (pay evaluation) methods?
Moreover, why can't school teachers be paid for productivity? School vouchers would do this through competition. Too many public schools have become ideological brainwashing centers and have failed to teach the three 'rs. Diane Ravitch shows in her book Left Back: A Century of Battles over School Reform that "Progressive" education techniques have demonstrably failed, yet education schools, school districts and teachers insist on them. Vouchers could cure this, and cure excessive administration and pay levels.
Procurement is a problem. The balance of quality and low bid practices depends on management knowledge that government cannot develop because it depends on annual budgets rather than long term performance measures. Leasing decisions are made that make this year's budget look good at the expense of next year's. Infrastructure repairs cost money this year but save money over the long term. Bridges and roads become more expensive to repair as time passes. Vehicle fleets are allowed to fall apart, in part because public perception favors state employees driving older cars, but the older cars are more expensive because of repair bills.
As of the early 1990s the state did not know and could not value its own land holdings. Land was being given away to various parties such as charities without knowing the land's value. The Erie Canal was a major tract and the state had to do a major survey just to figure out what it owned before it could start re-development.
Because public sector accounting remains obfuscatory, it is difficult to compare state operations across states, which is essential to good management. Rather than fighting for coherent budget and financial statement categories that can be compared across states, and for integrated accounting system within the state, the Governmental Accounting Standards Board was set up in the mid 1990s and created half-way measures. Depreciation still is not charged against state buildings, for instance. Programs cannot be compared to programs across states. Budgets for construction are backcharged to agencies and made difficult to compare because they are co-mingled with other program costs.
The bottom line is that no one can look at the operation of a program, say a commission on banking, and compare its costs to a comparable commission in other states. That is no accident. No media source has raised the desirability of having this. No media source has discussed the effects of annual budgeting on long term costs. No media source has made an issue of accounting practices since the 1970s. The attitude in New York is: if it's broken, don't fix it; and if money is wasted, so what?
After decades of Democratic Party rule in this state, millions have fled, services are dismal, and the economy is in steep decline. Here we see the result of the ideologically driven school system, because the public cannot figure out that if you keep raising taxes and squandering the money, the state will become poorer and decline. New Yorkers are going to need to learn for themselves what the Greeks are learning for themselves. And like the Greeks, given 12 years of brainwashing that they went through in school, New Yorkers will blame everyone else in the world and will call them "racists" but will not blame the true culprit: the voters and public of New York State that has voted for self-destructive policies and the Democratic Party.