More on Road Maintenance Savings
Bacon's well-researched piece follows posts by Geoff Segal and Norm Leahy on this blog that identified road maintenance as a significant savings opportunity.
Looks like HB667 is a "keeper."
It is to be expected that this bill would draw a lot of attention from individual members. But what is unexpected -- and even shocking, to this writer -- are the number of proposed amendments that would grant state monies to private, nonprofit organizations for general operating purposes, annual funds, construction, promotion, etc.
I've written about this on my own blog, and in one of the comments, there was this:
"Nor shall the General Assembly make any like appropriation to any charitable institution which is not owned or controlled by the Commonwealth; the General Assembly may, however, make appropriations to nonsectarian institutions for the reform of youthful criminals and may also authorize counties, cities, or towns to make such appropriations to any charitable institution or association."
Va. Constitution Va. Con. Art. 4 § 16 (1971)
Looking over some of these requests, it seems to me that many of them fly in the face of Art. 4, Section 16.
If the Legislature is genuinely serious about reducing costs, one of the first places to begin is with these amendments.
Teachers unions keep telling us they care deeply, profoundly, about poor children. But what they do, as opposed to what they say, is behave like the Borg, those destructive aliens in the Star Trek TV series who keep coming and coming until everyone is "assimilated."
We saw it in Florida this month when the state supreme court struck down a six-year-old voucher program after a union-led lawsuit. And now we're witnessing it in Milwaukee, where the nation's largest school choice program is under assault because Wisconsin Governor Jim Doyle refuses to lift the cap on the number of students who can participate.
...Mr. Doyle, a union-financed Democrat, has vetoed three attempts to loosen the state law that limits enrollment in the program to 15% of Milwaukee's public school enrollment. This cap, put in place in 1995 as part of a compromise with anti-choice lawmakers backed by the unions, wasn't an issue when only a handful of schools were participating. But the program has grown steadily to include 127 schools and more than 14,000 students today. Wisconsin officials expect the voucher program to exceed the 15% threshold next year, which means Mr. Doyle's schoolhouse-door act is about to have real consequences.
There's no question the program has been a boon to the city's underprivileged. A 2004 study of high school graduation rates by Jay Greene of the Manhattan Institute found that students using vouchers to attend Milwaukee's private schools had a graduation rate of 64%, versus 36% for their public school counterparts. Harvard's Caroline Hoxby has shown that Milwaukee public schools have raised their standards in the wake of voucher competition.
Last Friday, John Stossel did an excellent piece on ABC's 20/20 entitled "Stupid in America," in which he broke down many of the myths and truths about public education and school choice.
The whole piece is worth a read, but Stossel really hits home with points about how more money is not the answer to improving education.
...without competition, parents don't know what their kids might have had.
And while many people say, "We need to spend more money on our schools," there actually isn't a link between spending and student achievement.
Jay Greene, author of "Education Myths," points out that "If money were the solution, the problem would already be solved … We've doubled per pupil spending, adjusting for inflation, over the last 30 years, and yet schools aren't better."
He's absolutely right. National graduation rates and achievement scores are flat, while spending on education has increased more than 100 percent since 1971. More money hasn't helped American kids.
Since we're all a' twitter today over transportation, I thought it might be interesting to look at an example of how VDOT can increase savings on road maintenance using the private sector:
If VDOT were to allow the private sector to perform more of the approximately one billion dollars of maintenance work performed on Virginia’s roads each year, the savings could amount to $285 million. An added benefit may be that the quality of the Commonwealth’s roads might improve.
It's a change even the paving lobby might find acceptable.
Where to look for cost savings in the Virginia budget? How about the Virginia Department of Alcoholic Beverage Control? According to the Virginia Piglet Book:
The Virginia Department of Alcohol Beverage Control operates approximately 300 retail liquor stores throughout the Commonwealth and is one of only 18 states that does not permit the private retail sale of alcoholic beverages within its borders. By getting out of the business of running its own retail establishments and opening the market up to private retailers, it has been estimated by the Wilder Commission and the Commonwealth Competition Council that taxpayers could realize savings of up to $700 million annually without giving up any of Virginia’s enforcement powers over alcoholic beverages and without sacrificing any revenues from licensing fees and violations.
Now that's a lot of money. But is it realistic to assume Virginia will get out of the business of selling liquor? Perhaps not in the near term. But if the Legislature is serious about streamlining government operations, and handing over responsibility -- where possible -- to the private sector, then this is an obvious place to start.
At first blush, and particularly to folks like me, it sounds like a grand idea -- manna from heaven. And in some ways, it might be. But there are pitfalls, too.
Michael LaFaive, the Director of Fiscal Policy at Michigan's Mackinac Center, ran through some of the pros and cons of zero-based budgeting in testimony before Michigan's legislature. In it, I learned one startling thing:
...the first use of zero-based budgeting in government has been tracked back to Gov. Jimmy Carter’s use of it in Georgia in the early 1970s.
Which is enough for some to abandon the concept entirely.
LaFaive also notes that applying a ZBB system to every state agency and department may fail. Time to strike the tent? Not just yet. Rather than a blanket approach, he suggested a modified system that would tackle agencies one, two or more at a time:
...don’t attempt to do zero-based budgeting for every department, every year. Such a move may prove impossible to manage. Instead, choose several departments and/or agencies, and rotate through every facet of state government over time. In Oklahoma, which has recently adopted zero-based budgeting, officials are applying the method to two departments and several agencies each year. Once those reviews are complete, the same departments and agencies will not see another zero-based review for eight years.
While the application of even a limited ZBB in Virginia would prove traumatic for those involved, it may yield results that justify the pain:
*Increase restraint in developing budgets;
*Reduce the entitlement mentality with respect to cost increases; and
*Make budget discussions more meaningful during review sessions.
Needless to say, this approach hasn't exactly taken the states by storm, at least according to this chart from the National Council of State Legislatures. In Virginia's case, the NCSL notes:
Program budgets organize the Appropriation Act, and performance measures are coming into use as a way to examine agency activities. Most executive budgets, however, begin with some calculation of a base, i.e., the approximate amounts required to continue current activities and caseloads.
"Performance measures" are fine and good. But if we're going to be serious about reducing costs and increasing efficiency, then perhaps it's time for Virginia to give zero-based budgeting a closer look.
It is not so easy for cost-cutting to prevail when the Governor may be adding 15 billion dollars to the biennial budget.
But I hope that the cost-cutting caucus continues to be aggressive- it is critical for public trust in government that citizens believe their elected officials are spending taxpayer money wisely- and government, like any large organization, has to be carefully monitored, especially at a time when it is easy to spend and spend.
It’s that time again. Time to haggle over a few billion here and a few billion there in the state budget. This year seems to be heading down the path of yet another tedious debate about the role of government and how our money should be spent.
Like many past Governors, Mark Warner has appeared to take the “break the bank” mentality in his final budget. The 2006-2008 budget represents a 14% increase over the previous budget, which included the largest tax increase in the history of our state. The Governor labels this budgetary growth as “investment” in our future—I’m almost certain we can “invest in the future” at a slower increase rate than 14% biennium and 109% in a decade.
But, what can be done differently? Plenty.
Currently, almost 18% of Virginia’s budget is spent on public K-12 education, totaling more than $6.6 billion per year. Funding growth has far outpaced the increases in student enrollment, with per pupil inflation-adjusted spending increasing more than 70% since 1975.
Do you feel your children are receiving a better education than you did?
Two solutions exist in order to improve our education system. First, we as citizens should expect that 65% of all education funds be spent in the classroom. By transferring funds from administration and support to actual teaching and classroom funding, we would be better utilizing education funds for what they are meant to be spent on—educating our children. Reattribution of just 3.5% of educational operating expenditures could generate almost $300 million for Virginia’s classrooms. Such funds could provide smaller class sizes, higher teacher pay and better infrastructure for educating our children.
Second, we as Virginians must take a serious look at school choice. The current system of public education allows parents few options when it comes to the educational needs of their children, one of the few monopolies existing in our country. As taxpayers continue to pay an ever-growing bill for public schools, those public schools face little accountability to parents who have no real choices should the schools not meet students’ needs.
School choice can save taxpayer dollars and push public schools to operate more efficiently. Families who choose to send their children to non-public schools save the state money (the current savings from students not enrolled in public schools totals more than $1 billion annually). In addition, when students opt out of enrollment in public schools, this reduces class size and the need for new school construction—an increasingly expensive burden on local governments. Returning a small portion of the cost to educate a child in non-public school would bring benefits to the public school system, families and children.
In the area of transportation we must effectively manage road construction and maintenance. We should encourage the strengthening of the Public Private Transportation Act (PPTA) to advance innovative approaches to reduce the time and cost of new road construction. We should also put a Constitutional lock on the “Transportation Trust Fund” to ensure that tax dollars taken from citizens for transportation actually fund transportation projects. Before this simple reform takes place lawmakers should not even debate new revenue sources for transportation. Citizens made their feelings clear by defeating the 2002 tax referendums in Northern Virginia and Tidewater.
Finally, Virginia needs to reform entitlement spending. For too long government has taken the approach that to make life better for those who rely on Medicaid we should simply pour more money into the program. Money is not the answer. Instead we must focus on ensuring our tax dollars are spent properly, that recipients have more choices in how they will be cared for, that there are incentives for individuals to save for health care through Healthcare Savings Accounts (HSA), and that mechanisms are in place to aggressively combat fraud and misappropriations of funds. All of these reforms will slow the growth of Medicaid spending while providing a better product to those most in need.
A colleague once told me that the General Assembly session reminded him of pigs running to a trough—everyone wants to eat. This mentality must end if we are to continue to be one of the best run states in the country. We as Virginians must stand up and demand real reform. And we must expect our tax dollars be spent in the most efficient manner. Government is here to encourage private sector growth and the freedom of choice, not to straddle taxpayers with an ineffective bureaucracy.