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Ray Haynes

How to Read a Government Budget

One of the great challenges of terms limits is the need to educate new legislators as they arrive at the capitol.  There is a "training session" they all go through, and usually a "retreat" by each of the caucuses that all attend, but, in each case, the agendas in each of those programs tend to reflect the bias of the staff or the leadership.  Not that the information is bad, but I found that sometimes it is not helpful, especially when it comes to the budget.  Government budgeting is not like private budgeting, whether it is individual or business budgeting.  Government budgeting has, as its central guiding theme, the desire to deceive the decision-maker, to prevent oversight of government programs, and to grant to unelected bureaucrats as much freedom to spend taxpayer dollars without interference from lawmakers as possible.

One piece of advice to new lawmakers, start with Schedule 6 in the Governor’s Budget Summary .  A quick look at that document show that not one single dime has been cut from overall state expenditures in the last six years.  In fact, the last Governor to actually cut spending was Governor Gray Davis, in the last budget crisis (’01-’02 budget).  Remember this one fact whenever you hear the words "We have made lots of cuts" in the last year.  They have made none.

That is because, although budget "analysts" use words that have English sounds, those words, as used by these "analysts," do not have English meanings.  They have budget meanings, and budgetese is a foreign language, intended to deceive decision makers.  My advice?  Look for historical data, it is much more available today that it has ever been, compare line items and their growth over the years.  You will find lots of room to actually reduce spending. 

The problem is no one in the Capitol will do it for you.  You will ask that every line be reduced to zero, and that every expenditure in that line be justified, and you will be told that such a request is impossible.  If you are lucky enough to sit on the budget committee, you will be handed a series of budget change proposals (BCPs), which will literally take last year’s budget as a given, and propose changes to that budget.  It will not analyze a program, or a line item.  It will not consider whether the 45 people who are supposed to be inspecting this operation or that are actually doing what they are hired to do.  It will simply say we need 10 more people to do that job.  If you say they only need 5 more people, you have just "cut" them by 5 people.

If you do not sit on the budget committee, you don’t even get that amount of information.  You are left to flail around in a sea of misinformation intended to get your vote.  You will be told how this or that "cut" is impossible, and that the only thing to be done is to raise taxes.  Major policy changes that can actually reduce spending will be taken off the table long before you actually have a chance to consider them, and you will be faced with the impossible task of trying to cope with all of the information you are receiving amidst the thousands of people who will be pounding on your door seeking taxpayer subsidies for themselves or their clients.  All of them will have a good reason as to why they should get my money, and you will be hard pressed to tell them no.

But tell them no you must.  The system is broken not because taxes are not high enough, but because no one tells these rent seekers no.  Nobody analyzes whether the $750,000 that got allocated to some jobs program in Watts in the 1980’s in little more than a boondoggle for some supporter of Maxine Waters, a legislator long gone.  The money just keeps flowing, it is never reduced, it is never eliminated.  Everybody has a good excuse for the money they get, the problem is that nine times out of ten, the excuse for the program does not justify spending money on that program.

Ultimately, I came to the conclusion that the only way to kill this big government beast is to starve it.  I recommend that same course of action.  You may not always know why that is the best course of action, but 14 years taught me that my instincts on this were always right.  You probably have the same instincts.  My counsel is to trust them.  They are right, even if you cannot articulate why.