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OP-ED | Fix the Process

by Brian O'Shaughnessy | Jul 18, 2014 2:40pm
(2) Comments | Commenting has expired
Posted to: Economics, Election 2014, Opinion, Taxes, Transparency

Soon we will be inundated with messages all saying the wrong thing.

The primary dysfunction is partisanship. They did this or that. However, it really is us. We need to demand more.

As the campaigns heat up, look for someone that talks about the process. Simply saying we need to spend less — or more in a specific area — misses the point by a country mile.

It is undeniable that we have a financial structure that habitually creates budget deficits. The structure needs to change.

For example, the income tax is far and away the largest single source for state revenue. Added to sales and use taxes — also personal in nature — and that accounts for 65 percent of state revenues. Why don’t we improve the economic power of this revenue source? Seems obvious to me. Jobs decrease, the median income goes down, we have less revenue and more need. However, the focus is not present.

If urban jobs are the key, why don’t we spend money creating the infrastructure necessary to create more economically vibrant cities? This is a 20-year process and we had better get started. Last time I looked, Bridgewater Associates was not recruiting at Hartford Public or Hillhouse. These are the young adults staying in Connecticut and they need jobs.

There is no shortage of studies that say we should stop funding A and spend on B. We look to Washington State or Pew and say, “See, this is how the money should flow.” Then off we go, each onto his own world and we adjust the same system that gives us deficits year in and year out. We use spoons and toothpicks to move mountains.

Asking folks in Hartford to “reallocate” funds from one function to another is a task incapable of performance without the appropriate process. Receipt of funding in the past appears to be an annuity.

An analysis of how the expenditure of funds can be directed toward more revenue producing endeavors is not a task that we are incapable of performing. We have the tools, just not the process. We adjust the same budget year after year and wonder why the results don’t change.

One more example, but perhaps the most important one: How we spend money and how we raise money are conceptually inseparable. Why do we separate them with a Finance, Revenue and Bonding Committee that never works with the Appropriations Committee? These bodies should work in partnership with the executive policy office, the Office of Policy and Management.

The focus should be basic and simple:  We should appropriate money for functions that will increase revenue. In the real world, people sit in a room and say, “How can we generate revenue and how much will it cost?”

We are about to begin a two-year analysis of our state’s sources of revenue (taxes) and it may not include an analysis of the impact of our spending policies on those revenue streams. This is truly amazing.

A state is an economic entity. It raises and spends money. The manner in which these two functions operate needs to have financial integrity and transparency. Deficiencies in either function are not the fault of any one political party, but of the process. Let’s all take responsibility and fix the process.

When we question the financial integrity of government, we question our belief in government, and that is a bad thing. It makes us stop working together.

We need a process that performs an economic analysis of how we spend taxpayer money. What investments create the best long-term economic return? The lack of a process is eroding our belief in government.

We hear pronouncements of deficit or surplus and we yawn. Let’s spend tobacco money on early childhood. Sure. Why not? Our corrections spending is understated at 34 percent. OK. Don’t fix it. What is a rainy day fund? Don’t know, but it has money. We have stopped paying attention and caring.

We need a process that analyzes what happens when we spend money in a certain area. Not a general reference to a 30-year-old study from a different state. What happened in Connecticut? Good result? Do more. It helps generate more revenue? Do more. There is a long term negative impact? Let’s stop.

Seems basic, but we can’t do it. We should.

Brian O’Shaughnessy of New Haven is a principal in the firm Community Impact Strategies Ltd. The mission of CIS is to facilitate the investment of public and private capital for the purpose of creating measurable improvements in human productivity and living conditions.

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(2) Comments

posted by: RogueReporterCT | July 18, 2014  2:55pm

RogueReporterCT

If partisanship is a problem, and the citizens need to fix it, then start with the electoral process. I’d like to see a law against reversing your opponent’s meaning by editing a radio interview for an attack ad. For starters.

posted by: Sarah Darer Littman | July 18, 2014  5:22pm

I’d also like to reform the primary process - either open primaries or something like what California did. The current death grip of the two party system on the primary process (and the legislature’s perversion citizens election funding process to raise the hurdle for third-party candidates) is just keeping us in the same old, same old. What I’ve learned from become older and cynical - and having switched parties in the hopes of finding honest people - is that parties are all about about maintaining their power, not what is best for the people who live in our state.