Monday, September 10, 2007

Saxman: Serve Virginians Better By Being More Cost Effective
Richmond Times-Dispatch 9/9/07

STAUNTON - The Commonwealth Institute, a newly formed left-wing policy group based in Richmond, recently released its analysis of the state biennial budget. Billing itself as "nonpartisan" and "independent," the institute states that its primary focus is on how Virginia's budget and fiscal policies impact lowerand middle-income residents.

The analysis follows the typical liberal line of thinking that unfortunately pervades most linear minds trapped in two-year budget cycles. The path is this: Government-program growth is outpacing revenues from existing sources so we must prepare to have the courage, once again, to increase rates of taxation so that we may balance the upcoming biennial budget.

Early in its analysis, the institute decries any attempt to reduce spending as "knee-jerk reaction" and "slashing." Again, nothing new in the liberal mindset.

Our executive and legislative branches have worked well together to produce a system of governance here in Virginia that is the model for the nation. We have been recognized as the best-managed state for two years in a row with the best business climate in the nation for the same period. Perhaps the Commonwealth Institute should focus on policies that will help us stay the best in the nation.

Revenues to the commonwealth have increased by more than 50 percent in just three budget cycles - one of which included a recession where revenues were flat-to-declining. The primary concern of the institute's analysis is that projected revenues will not keep up with projected expenditures. When the state budget has been increasing so rapidly the past four years that a greater than 50 percent increase in revenues cannot cover expenditures, then Virginia should not be looking for ways to increase revenue.

If one were to project lower levels of income and expenditure so that one achieves a balanced budget, would one notice a difference in service delivery? Sadly, the left gauges the success of a program by how much is spent rather than what is produced. This line of thinking also assumes that every government agency and department currently is operating at peak efficiency, and that even a slight reduction in spending will negatively impact the delivery of services.

We should challenge ourselves to find ways to improve efficiency, thus better serving Virginia's citizens in a more cost-effective manner. We should be looking at ways to allow our state employees to increase productivity by offering them incentive-based pay packages, and giving them decision-making rights, an understanding of opportunity costs, increased and improved training, and honest opportunities for advancement.

By allowing our state workforce to focus on service delivery and productivity rather than completely spending its budget by the fourth quarter of every fiscal year, we can tap into what is potentially a tremendous level of synergy in our existing workforce.

Further, I would offer areas where savings can be found in the operations of state government:

  • The recommendations of the Wilder Commission;
  • The findings of the bipartisan, bicameral Cost Cutting Caucus and the Kaine administration's Operational Review Teams;
  • The more transparent budget document that was established with HB 1838 in 2003 (think non-state agency grants, which totaled $30 million this fiscal year alone);
  • Examination of reducing the rates of growth in our primary budget drivers - Medicaid and K-12 education. One health care group has estimated that hundreds of millions can be saved each year by reducing the rate of growth in Medicaid from 8 percent to 6 percent - 6 percent being slightly ahead of current population and inflation growth rates.

Wouldn't increased focus on areas like these make more sense than a shortsighted tax increase that potentially harms long-term economic growth?

I agree with the institute when it calls for tax reform. However, we quickly diverge when it comes to the definition of reform. I believe, as do many of my colleagues, that the tax code should strive for a broad base with the lowest rates possible so that the economy is encouraged to grow and that government interference is minimal.

Virginia's place in the world's dynamic economy must not be set by two-year mindsets with statist, linear, and short-term thinking. Virginia's governance model shouldn't just keep up; rather, it should be a model for change and innovation. The key element to that change is working in partnership with the private sector to provide the best possible public-sector services at the lowest cost to the taxpayer so that the burden of taxation does not inhibit economic growth.

Del. Chris Saxman represents Staunton and Highland County, and parts of Augusta and Rockingham Counties. He is the chairman of the General Assembly's Cost Cutting Caucus.

Link to the RTD version


  • How do you propose to reduce the rate of growth in K-12 education? In Medicaid?

    By Blogger Dennis Neal, at 9/10/2007 12:10 PM  

  • will do. tied up for the rest of the day, but will get you a post on both hopefully by thursday. I am in richmond all day tomorrow in meetings.

    By Blogger Chris Saxman, at 9/11/2007 11:27 AM  

  • Sounds good. Look forward to it.

    By Blogger Dennis Neal, at 9/11/2007 1:18 PM  

  • I love how relatively modest cost-cutting ideas for state government are derided until there's a budget "shortfall." Suddenly, all that travel, all those conferences, all the overstaffing and all the other questionalbe spending get scrutinized and limited until the pleas for more money can be dramatically presented.

    By Anonymous Prospero, at 9/11/2007 8:49 PM  

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