Five Lessons I’ve learned About Government Spending

By Sean VanGordon

In the fall of 2012 Oregonians should ask tough questions of candidates about their policy views. Campaigns in the United States are marketing-driven, heavily scripted and rely on simplistic catchphrases. Good marketing wins elections. But it doesn’t solve problems – because when you govern, it’s the details that matter.

Government spending is a perfect example of this oversimplification of issues. Voters are presented with the false choice of either paying more taxes to support government or cutting government programs. Even at the city level, budgets are more complicated than that. I want to share with you five key lessons I’ve learned about government spending. In doing so I’ll show that you can prioritize spending and protect essential public services.

For the sake of argument, this is a discussion about the management of government finances, not the role of government. In our current economic situation a reduction in spending is a reality, and this is my opinion of how to reduce spending while mitigating cuts to essential services.

Lesson #1: Economic Growth Is King

All budgets are tied together by a single truth, which is that the economy is king. That’s because economic conditions control the flow of revenue to the government. As a household earns more, it pays more in taxes. A worker with a decent manufacturing job pays more taxes than one on unemployment. Jobs will close deficits at all levels of government. Weak economic growth will make deficits worse.

Lesson #2: Reorganization Saves Money While It Protects Services

Elected officials need to constantly question the size and organization of government. By shrinking the size of government you can reduce overlap and save administrative costs. By cutting administration you protect services that the public uses. Here are some local examples:

• The Eugene-Springfield Fire Department merger: This is an ongoing effort to merge two fire departments. In Springfield it has saved approximately $600,000 through reduction of overlaps between the two departments. These savings protected firefighters from layoffs and, more important, safeguarded response times for citizens caught in an emergency.

• The Springfield Public Works and Development Service Departments: For the last twenty years these have been separate departments. Last year Springfield merged them. During the merger the city, determined to improve customer service, carefully reviewed all functions of the two departments. The result? Savings totaling about $300,000.

• The State of Oregon reduced managers: In 2012 the Oregon Legislature required that the State increase the ratio of employees to managers. While the State has had some challenges with implementation, the Legislature’s message was clear: Improve efficiency.

Lesson #3: Don’t Forget to Save

We need to focus on providing consistent services to the voters. The budget situation is tight in every jurisdiction, and we don’t know when it’s going to get better. Saving when you can and protecting your reserves protects the financial health of government. In the 2011-2012 budget cycle the City of Springfield received $500,000 more in property tax revenue than it had budgeted. The Springfield City Council decided to save it for the 2012-2013 budget cycle in order to avoid additional cuts.

In the Oregon Legislature there are numerous proposals to grow a rainy day fund. My personal favorite is the plan to save 3% of all revenue in the General Fund.

Lesson #4: Reduce Overtime

Overtime is expensive, but sometimes unavoidable. It wouldn’t make sense to send police back from a crime scene to punch out or call firefighters home from a fire because their shift was up. However, government needs to reduce non-essential overtime whenever possible. In 2011 the Springfield City Council held a meeting specifically to talk about the $900,000 in overtime we budgeted for the Fire Department. As a result, in 2012 the city reduced its budgeted overtime expenditure by 33% because management and labor worked together to find creative solutions.

Lesson #5: Innovate.

Innovation in government saves taxpayers money and protects services. It allows government to solve structural cost problems with creativity. Here are examples of innovative solutions that are either in use or under consideration:

1. The statewide e-permitting system that allows developers to apply for permits on-line;
2. The shared lending agreement between local libraries that makes it easier to share books while saving both staff time and spending on materials;
3. Springfield is evaluating becoming self-insured for health insurance and workers comp;
4. Both the Springfield City Council and Planning Commission now use iPads for public meetings, which saves thousands of dollars on printing costs.

There are plenty of additional examples on the state, county and local levels. As citizens, we need to promote this type of thinking.

Conclusion

The economic environment is tough right now. The country faces hard choices about the size and scope of government. In a campaign year candidates typically present two choices: 1) I will spend more money in government and may raise your taxes. 2) I will cut government spending and may cut your taxes.

Ask for specifics. Ask candidates which services they are going to protect and what the tradeoffs are. At the end of the day we need to elect leaders who can discuss their opinions in detail with you, and make solid decisions about problems we face as a community.

Sean VanGordon is a Springfield City Councilor  

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