False
Choice
Many
politicians assume the state has only two choices to
balance the budget: raise taxes or cut
programs. They ignore the option of changing the way
government does business.
The
drumbeat to raise taxes continues in Virginia, even
though a lot of Virginians clearly oppose the idea.
The most frequently heard proposal is to increase
taxes on alcohol and tobacco. Several localities
have already raised their cigarette tax
substantially.
Gov. Mark R. Mark
Warner and the General Assembly must close a budget
gap of approximately $1 billion. Sin taxes
won’t do that.
Elected officials
are making their task more and more difficult by
taking one after another area of state spending off
the cutting table. Among the protected items are
public education, state employees and the funding
for the local car tax rollback. College presidents
are demanding that higher education spending not be
cut.
When state
government spends at the rate of $25 billion a year,
it shouldn’t be so difficult to make the budget
adjustment required. One of the reasons for the
difficulty is the lack of flexibility in budgeting.
Some inflexibility is the result of federal
mandates. Much of it is not in the form of
legal restraint, but rather political limitations
that elected officials impose on themselves.
One of the factors
driving state spending increases is Medicaid, which
rose 13 percent last year. This joint federal-state
program, now the second largest area of state
spending, is simply out of control. That does not
mean it is uncontrollable.
Addressing the
current budget gap also would be easier if elected
officials and bureaucrats were more flexible in
developing solutions, particularly through
innovative methods of achieving the same program
objective at lower cost. Private firms that fail to
demonstrate this kind of flexibility find themselves
in bankruptcy. Government doesn’t operate with the
same imperative.
The most troubling
aspect of the current budget debate is that many
elected officials and commentators assume that there
are only two options — increase taxes or cut
programs. They ignore the option of radically
changing the way Virginia government functions to
achieve more with less.
Some of the
potential changes can’t be implemented
immediately. Some can. What shouldn’t be tolerated
is a refusal by state officials to consider a
radical change to existing programs because
particular interest groups would oppose the change
or because the Commonwealth has handled a program in
a certain way for decades.
The hard reality of
the current economic slowdown should prompt
questions that may never have been seriously
entertained before. We are already asking whether
the Commonwealth should sell its liquor stores. We
should question whether Virginia state government
should reduce its role in other areas as well.
If we focus on
precisely what we want to accomplish in each area of
current state spending, we might find that some
expensive programs could be replaced with a few
inexpensive websites. Agencies with offices
scattered across Virginia dealing directly with the
public might accomplish the same objective through
the mail, by telephone or by the Internet if the
public were properly advised of those alternatives.
The presidents of
Virginia’s state-supported institutions of higher
education, in general, resist any suggestion that
they can meet their responsibilities without
constant increases in state aid. That attitude must
be challenged. Higher education in the future will
not resemble what exists today. Traditional
institutions must learn to compete not only against
each other, but also against innovative alternatives
such as Internet universities and non-traditional
methods of providing post-secondary education.
American businesses
are dramatically changing to adapt to technological
advances that enhance efficiency. Government is less
likely to adapt unless it is pushed.
Now isn’t the
time for incrementalism. Now is the time for bold
thinking.
--
December 23, 2002
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