John Burris: Asa Makes A Budget Statement

Governor Asa Hutchinson has now released his budget and two things stand out. He’s proposing a 1% cut to most agencies and he’s also not including in the schedule any dollars for General Improvement Funds, or GIF.

These proposals should cause any conservative who has worked for reform to celebrate. Since our political dialogue can sometimes focus more on rhetorically conservative buzzwords about shiny objects, maybe it’s helpful to clearly highlight the significance of these two tangible conservative things that are actually happening.

First, let’s discuss budget cuts. They’re never easy.

The governor has proposed a modest cut to dozens of agencies, while holding harmless the handful of large line-items that drive our overall growth in spending (policy reforms must drive those savings). The budget impact is small and therefore disproportional to the shrieks of pain you would typically hear from small agency directors.

The hyperbolic reaction compared to the relatively small amount of savings is exactly why a reduction in spending is never followed through with.

As House Republican Leader, I proposed a small reduction to the allotted increase in spending. That meant simply not growing spending by quite as much. Almost all in the Capitol orbit reacted with a mixture of confusion and rage.

My pal John Brummett was at least sympathetic to the Republican point, but I think that was just pity at our failure at even attaining a seat at the table.

But now we have a Republican governor. Directors are simply told to adapt to the new standards of efficiency, rather than to complain about them.

Government arrived at its current size by incrementally growing. We should celebrate efforts to incrementally grow it less, which this newly proposed budget does.

Secondly, there’s potential for a change in the way the state handles its surplus monies. I say potential for change because the governor has only proposed not budgeting for any GIF funds. He’ll likely have to concede a little, but hopefully not fully.

GIF comes from unobligated revenues the state accumulates and then turns into surplus funds. This happens because we forecast for collections and almost always collect more than we forecasted.

Let’s pause here to compliment our tiny state for operating smarter and better than most. We could just spend more than we take in, after all. But since we don’t, once every two years the Governor and legislative leaders divvy up the surplus monies. Some goes to prop up trust funds or service debt. Then the GIF gets spread out amongst legislative districts, and helps fund improvement projects across the state.

That process sounds decent enough on its face, and in reality it probably is. It’s just far from perfect; it can be abused.

In years past, legislative leadership could play a little faster and little looser with the money. The right votes could get a member’s district more money. One need look back no further than the tobacco tax increase in 2009 to find examples of GIF being distributed unequally. (As a first term member of the House, I voted “no”).

Even though GIF is distributed equally today, it can still become a complicating factor in negotiations over more important things like tax cuts. I’d hate to imagine this scenario, but it is possible for even a self-proclaimed conservative Republican to be hesitant to cut taxes so much as to leave no extra dollars to pave a few parking lots back home.

Like most temptations, it’s just easier if it’s not right in front of you. The governor’s proposal removes the temptation to prioritize local and less-urgent needs over more important statewide issues, as worthwhile as those other projects may be. Even if a few legislators force him to budget a little GIF, he has at least forced the debate.

Since baselines matter in debates and budgeting, we should again celebrate the momentous shifting of a baseline now.

So there are two things that Gov. Hutchinson has done that deserve conservative praise. Many have sought these incremental reforms, but none have delivered. They’re not the shiniest objects in state policy right now, but comprise the nuts and bolts of the way we approach our budget and the spending of taxpayer dollars.

Relatively small things – even in a bigger scheme – should never be ignored. Those who trivialize the small things are usually the ones who get the big ones wrong.