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Sat, 20 Sep 2008
Do you want change or just to shout about it?
As perhaps you know by now, the state ended the last fiscal year around $33 million in the red, and the accusations and counter-accusations are flying. There are some important misconceptions flying around, though, and it's worth clearing some of them up. So last week I spent some time reading the preliminary financial report for the fiscal year that ended June 30.
For one thing, several reports have pointed out that the Department of Human Services is where the bulk of the overspending seems to have occurred. You might think, "Aha! It's because we still spend too much on social services." But in fact, the overspending appears to be that the DHS administration had promised $19 million in general revenue operational savings that they were unable to achieve. That is, someone high on the chain of command appears to have decided they could peel off that much spending while not affecting service, and it didn't happen. In reality, looking only at state tax dollars, every single division of DHS was under their original budget, except for Medicaid, which was over by $641,000, or less than 0.1%.
But there was overspending in other places. Over in the Department of Health, for example, you can see $8 million excess at the state-run Slater and Zambarano hospitals. This appears to be an admission of failure for anticipated cost-cutting measures in those hospitals. And there were some unanticipated social expenses, too. Over in the Department of Labor and Training, I see about $10 million extra in unemployment and temporary disability insurance payments.
Now I am by nature an optimist and all for optimism in a general sense. But I'm not sure it's such a good idea for budget writers to be as optimistic as they appear to have been. If someone is going to claim savings in a budget, I want them to have a realistic and achievable plan for getting that savings. That appears not to have been the case in several state departments for the last fiscal year, and I fully expect there are more such surprises waiting for us in the current fiscal year.
The truth is that the administration thinks it can do things simply by commanding them to be done. Furlough days? Sure, count them in. Decreasing employee benefits? As good as done. Medicaid savings without a plan to achieve them? No problem.
But this is silly. The governor is not a god-king. There is a reality out there that must be addressed in a realistic fashion. In this case "realistic" means you can't pretend that poor and unemployed people will disappear, you can't pretend that you can simply have your way with the unions, and for better and worse, you can't simply pretend that employees who don't trust you won't act to thwart your intentions. Good managers know these things and account for them. Others simply demand they happen, and then rage at their failures.
So here's the bottom line. Even after the Medicaid, child care, education and local aid cuts of the past couple of years, we're still $33 million in the red for last year. The budget for the year that we're currently in was passed based on savings that will not happen. And so, perhaps you thought last year was rough? Just wait.
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