Bad Times Can Lead to Better Opportunities

When Ronald Regan took the oath of office as President in 1981, America was suffering through dire times – double-digit interest rates, declining factory orders, a sinking housing market and rising unemployment. Americans were held hostage in Iran and the nation’s confidence was shaken.

In our Washington, Gov. John Spellman came into office facing falling tax revenues, a new mandate to fully fund basic education, and a budget deficit roughly proportional to the $6 billion shortfall Gov. Chris Gregoire faces as she launches her second term.

Spellman and fellow Republicans controlled state government in 1981, just as Gregoire and Democrats run Olympia today. It took Spellman and company several special legislative sessions to balance the state’s budget, a constitutional mandate. In the process, programs were slashed, the state sales tax went from 5.5 to 6.5 percent and was extended to groceries for 14 months to make revenues meet expenditures.

The Gregoire budget makes some gut-wrenching choices, none of which are easy to swallow. She has kept her election promise not to raise taxes and is facing the tough task of cutting government by roughly 20 percent. Just as families and businesses struggle to make ends meet, making ends meet for government is equally daunting.

Given the fact that the Tooth Fairy is unlikely to drop $6 billion under the capitol dome, the governor and lawmakers assembling in Olympia next month have the opportunity to make systemic changes in the way government operates. Those changes could ultimately protect essential services and spare taxpayers from what many believe would be a tax hike later in the session.

Here are some approaches to consider:

First, recognize the problem is real and come to Olympia with the attitude of turning lemons into lemonade.

Second, don’t add to the crisis by passing new programs that will increase costs for taxpayers. There is an old saying that when you are in a hole, stop digging.

Third, look at the entire array of government programs using the POG — the Priorities of Government. The POG process ranks government services from the most to least important and funds programs accordingly. Families set priorities when they trim household spending, and government can do the same. POG worked in 2003 when the state found itself 12 percent short of revenue in the economic fallout from 9/11.

Fourth, look for new ways to provide government services. Contracting out could help the state deliver some services more economically and efficiently. In addition, private contactors – not the taxpayers – are responsible for payroll and benefits, and contractors pay taxes adding revenue to state coffers.

Fifth, look at programs in other states that save money and help taxpayers. For example, New York City implemented a “311 program” which allows customers to dial one number – 311 – for information and access to all city government services. All calls are answered by a live operator, 24 hours a day, seven days a week. Operators have access to translation services in more than 170 languages, as well as a state-of-the-art database of information about city services and government. That coordination leads to increased efficiencies and streamlined service.

Finally, and perhaps most importantly, turn government upside down. The structure of state government is based on agency jurisdiction and its own proprietary data. It is process-, not product-oriented and is cumbersome, costly and frustrating for taxpayers.

For example, different state agencies require employers to file separate forms to be stored on their own agency computers for just that agency’s use. Too often, those computers don’t talk to one another and taxpayers fill out form after form with essentially the same information. That data could be centrally collected and confidentially stored on a state-of-the art database such as it is in New York.

So, while 2008 ends on a challenging note, just as 1980 did, there are opportunities to reshape government and make it work more efficiently and economically. Hopefully, the governor and lawmakers will take advantage of the opportunities this dire time presents.

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