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Governor
Mark R. Warner has submitted his budget amendments
to the General
Assembly for refinement, changes, and political
posturing. His recommendations are heading in the
right direction, but the General Assembly can do
much more.
Since
1977, the Thomas Jefferson Institute for Public
Policy has been advocating several reforms in the
budget and spending process in Richmond.
Some of these are now being promoted by the
governor and
by many in the General Assembly.
Consolidating
state agencies makes good sense.
Refocusing mental health to the community
level is a good idea. Taking firm control of the state purchasing
process and the state’s technology development
also are sound business decisions that are long
overdue.
And
selling the ABC stores should be just the start of
ridding the taxpayers of state assets that are not
needed, nor the proper role of state government to
own. If
the ABC stores are carefully divested from state
ownership, preserving the current distribution
and enforcement procedures, money could be
generated for the state treasury
above and beyond the price of the sale which
some feel could be $600 million or more.
Other assets of land, buildings and
activities should be sold to the private sector to
get the state out of land management and other
commercial activities.
But
at this particular time, when state spending must be
carefully and dramatically changed, the long-term
impact must not be overlooked for short-term fixes
that will not help us avoid similar financial
problems in the future.
Here
are five reasonable suggestions that would have
long-term impact on the state budget, would allow
the General Assembly leadership and the Governor to
work together, and would be in the long term
interests of the taxpayers of Virginia.
First,
the 37,550 full time state jobs that have been
identified by agencies as able to be done in the
private sector should be analyzed and bid out to the
private sector. The savings in the bi-annual budget would be
in excess of $650 million in the first two years alone.
Second,
the accounts receivable due our state should be
parceled out to the private sector for collection.
If
Virginia’s accounts receivable over 90 days old were the
same as on
June 30, 1995
over $500 million more would be in the state
treasury. This
lax debt collection by the state is inexcusable and
should be brought under control.
Third,
every state agency should determine the true costs
of doing its business. The state’s Commonwealth Competition
Council has developed an award winning
computer-based program to determine the true cost
for government doing its various jobs. Indeed,
several years ago the Auditor of Public Accounts
urged in writing that state agencies use this
program to see if the private sector can do these
jobs more efficiently.
The General Assembly should require this in
the budget amendments passed this year.
Fourth,
our colleges and universities would rally behind a
change in the way they have to construct their
buildings. The
current procedure, with a layer of unnecessary state
bureaucracy impeding efficiency, should be changed
to give more freedom and authority to the local
campuses. Campus
administrators believe that this businesslike reform
could reduce building costs by at least 20 percent. That
should be a no-brainer for the Governor and the
General Assembly, but entrenched bureaucracy is hard
to budge. Enacting
the change will take strong leadership by the
governor and the
General Assembly.
Finally,
the big enchilada in the current “budget crisis”
is constraining the growth of government’s
permanent bureaucracy while providing the state the resources
needed meet necessary infrastructure needs
such as transportation and school buildings. This can be done if the Governor and the
legislature would put a cap on state spending as
other states have done. Had the state’s budget since the time
George Allen left the governorship only increased at
the rate of inflation and population, the current
deficit would have been eliminated and over $4
billion would be been available for roads and
schools. And
this is after the car tax reimbursements and rainy
day fund payments and federally mandated spending.
Governor
Warner has taken some bold first steps in
controlling government spending and bringing better
management to the way government works. The General Assembly leadership has responded
in a cooperative tone. But additional steps
still are needed to really get a
handle on state spending.
If
our elected leaders let this opportunity pass them by,
they will have failed.
--January
20, 2002
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