Morgan: Of deficits and drought

After years of drought, the rains have come. Although the immediate problem of drought has been replaced by one of flooding, that doesn’t mean we should fail to prepare for the next drought. We should take steps to make sure that we are prepared so future droughts have less of an effect on our people and businesses.

In the same way, although the budget deficit has been fixed for the coming year, we need to take steps to prevent future deficits from happening. The difference, though, is that the state is not suffering from a drought of revenue. It’s quite the opposite. The state is collecting hundreds of millions of dollars more than in the prior year. The state does not have a revenue problem.

This last session it seems lawmakers were convinced that targeted tax cuts for business caused the $611 million deficit. The real problem is that appropriations only make up a fraction of the entire amount of money the state spends. Not enough research is done to determine whether agencies are spending their budgets on programs that are necessary and that work.

The time has come for lawmakers to change the state’s budget process. It makes no sense to be collecting more revenue, yet cutting the budgets of most agencies, including transportation and higher education. Likewise, agencies shouldn’t have large cash reserves accruing every year. Determine what programs the state should be running and how much it will cost to run them and appropriate the proper amount. Don’t just assume that because an agency got a certain amount one year that it needs the same amount or more the next.

Lawmakers talk about wanting to run the state like a business. However, I don’t know any successful business that isn’t using performance metrics as part of its budget process. This year, an important step was taken that will assess every tax credit and incentive to determine if it is working as intended and providing more to the state than it costs. Next year, lawmakers should use the same process on every agency, program and department in the state. The best way to deal with a drought is to prevent it from happening.

This article was posted in The Journal Record as part of Fred Morgan's monthly opinion editorial.