Gov. Jesse Ventura could announce today that he wants to balance the state budget by taking a nick here and a nick there out of state spending. Enough nicks would do the $2 billion job -- though the result would be a scarred and pitted mess.
There must be a better way -- and it is not a walloping big tax increase (though a judiciously chosen increase in a particular tax or two would do some good just now).
For guidance to the better way, Ventura need only look downhill from the Capitol to the St. Paul office of Public Strategies Group (PSG). This 10-year-old collaboration by a couple of bright lights from Gov. Rudy Perpich's administration is showing governments around the country how to save money and serve the public better at the same time.
Minnesota's problem in 2002 "is not how to take $2 billion out of the state budget," said PSG cofounder Peter Hutchinson, a former state finance commissioner. "It's how to spend [the remaining] $26 billion incredibly well."
Hutchinson and former deputy revenue commissioner Babak Armajani, his PSG partner, are full of ideas about spending government money well. Some of them are already wafting to the Capitol (several state agencies are PSG clients), but most of the firm's work is done elsewhere. PSG employs 50 people in eight locations; its revenues doubled in 2000 to more than $6 million. It must be doing something right.
Let it not be said that these prophets are without honor -- or at least notice -- in their own backyard. Here are some of the money-saving, government-improving notions they would urge Ventura and the 2002 Legislature to consider:
Don't just cut spending; refocus it on desired results. For example, it may be that the budget's 1,000-pound gorilla, K-12 spending, will have to go on a diet before this recession is over. But that diet should produce a healthier gorilla, by pumping resources away from central administration and toward classrooms. Teachers should have more authority to spend those resources -- and should be accountable for the learning that results.
"We have to be clear about what results we want," says Hutchinson, who spent three years as superintendent of Minneapolis public schools in the 1990s, in a ground-breaking arrangement between PSG and the district. "I learned then that if you don't focus on what you want, you won't get it."
In other words, don't focus on class size when what you want is third-graders who can read. Free schools to teach reading in whatever way works, and reward those that do.
Cut the cost of mistrust. Built into state spending on long-term care, special education and more is an assumption that those entrusted with state money will spend it badly if left to their own devices. The state's response to that faulty assumption is expensive overregulation, of the sort that has nursing home workers and special education teachers spending half their days filling out forms.
PSG advises its clients to cut the red tape, and reward good results instead. It's cheaper, they say, and it works.
Target subsidies to those who truly need them -- and remember that most state spending is a subsidy to somebody.
Armajani's case in point is higher education funding. Nearly $9 out of every $10 the state spends on higher education goes to institutions, not the students whose education is the state's real goal. With that indirect approach, "we are wasting money subsidizing students who don't need to be subsidized," Armajani said. Higher tuition, coupled with more generous financial aid for students of modest means, would more efficiently meet the state's goal.
Hutchinson's illustration of the same idea: state aid to local governments. The purpose of the aid is property tax relief, but it is distributed in a way that has too little to do with a jurisdiction's need for relief. Give the money directly to the taxpayer, Hutchinson says, and the state will get more tax relief for the buck.
If Ventura embraces only a few of PSG's suggestions when he unveils his recommendations for the state budget today, he will be asking for more heavy lifting than legislators bargain for in an election-year session. But business as usual ended in America's statehouses on Sept. 11. How legislators perform in the next three months will determine whether this dark time will leave Minnesota weaker or stronger in years to come. Peak legislative performance now is a must. |
