Leaky roof politics

There’s an old joke about a man with a leaky roof. When it rained, he said he couldn’t fix the holes because it was raining. When it wasn’t raining he’d say, “Why fix the holes? It’s not raining right now.” And so the holes were always there.

The state budget is a little bit like the man’s roof. There are lots of holes. Many have highlighted them, yet they remain.

Despite these holes, something should be said, and many have said it already. Gov. Mike Beebe holds a skillful understanding of the intricacies of the state budget. He does deserve credit, and that credit is never-endingly heaped upon him.

What doesn’t get said, as often, however, is that our state budget – despite its tremendous virtue of being balanced – has challenges. Some of these problems are our own fault; some are not. Most importantly, these holes from a previous era shouldn’t keep a new governor from delivering on his promise of tax relief in a new era. I’ll come back to that.

Once governor, Mr. Hutchinson will likely not get the brush-over treatment on the budgetary issues that Gov. Beebe has enjoyed. So let’s shine a light on some of the leaky holes in the state budget in an attempt to frame up some of problems on the near horizon.

Prison over-crowding is well noted. Our state has allowed the reimbursement to counties for housing state prisoners to pile up into a sizeable amount. County Sheriffs and Quorum Courts want their money. I can’t blame them. I do suspect, though, that the intensity with which they demand their money will increase. They’ll be demanding it from the guy who didn’t accrue the debt, but he’s not from their political party, so a problem will turn into a crisis, in their words. A new $100 million prison is also the only proposed long-term solution. Maybe it is, but other things should be explored as well and legislators are giving them consideration.

Public education is about 60% of our general revenue expenditures, and it’s a budgetary black hole unto itself. Yes, I said a black hole. The goal of educating Arkansas’ children is not the problem. The black hole is the manner in which we determine adequacy increases, which doesn’t reward efficiency and only this year began looking at individual line items inside the recommended increase. Or, it’s the slow and deliberate way we’ve nearly depleted the Facilities Fund, even so recently as borrowing millions to temporarily lower insurance premiums for teachers. It’s not quite re-arranging the deck chairs on the Titanic, but I could understand someone making the argument that it is.

Then there’s the Medicaid Trust Fund. Stimulus dollars propped it up for while (yes, we do and always will use one-time money for on-going needs). Now we’re playing catch-up. What was a $400 million cliff has turned into a much smaller speed jump, likely due to the Payment Improvement Initiative and other reforms. But the traditional Medicaid program – which is about 25% of the state General Revenue budget – is ripe for reform. Constituency groups won’t think so, but that’s no reason to balk.

None of these problems – or any others – exists because Republicans cut too many taxes. They exist because of fundamental policy and structural flaws in the way we approach our biggest budget items. Blaming the problems on tax cuts would be like thinking you had too much water in your floor because you didn’t have enough buckets to scoop it out, instead of blaming yourself for not fixing the hole in your roof.

Gov. Beebe effectively plugged the leaks in the state budget as they manifested. He deserves credit. It’s a basic skill that even some governors (or presidents) can’t get right.

When more problems do arise in the future, many will say something to the effect of “well, we didn’t have these problems when ‘ole Mike was around.” But the truth will be different than their perception of reality.

Gov. Hutchinson will need to find a way to plug the holes, because problems do surprise you in state government. That’s beyond anyone’s control.

But some problems can be avoided. You can fix a leak when the sun is shining, in other words. That way, we don’t have to ask the citizens of Arkansas to wait on needed tax reform because we failed to fix the things we knew were costing us the most money.