Public Policy Forum Blog

Paradigm shifts in state budgeting

In 2003, California could have laid off every one of its state employees and still had a deficit, according to Alan Greenblatt of Governing Magazine. He explains, "Most of what states do, after all, is simply write checks to schools, hospitals and other entities that actually provide services." Which helps explain why, traditionally, attempts to reign in state costs have focused less on state personnel, overhead and administrative costs and more on programmatic and service cuts. Not anymore—with employee pension and health care costs soaring, across the nation states are now engaging in a cost-cutting paradigm shift and are focusing on getting state internal costs down in order to preserve services as much as possible.

Wisconsin appears to be leading the charge, at least so far as personnel cost-cutting goes. The most recent data from the U.S. Bureau of Labor Statistics show the number of state employees declined faster in Wisconsin in the second quarter of 2011 than in any other state. With a 10.1% decrease in the number of state employees compared to the second quarter of 2010, Wisconsin's state job-cutting surpassed every other state's over that year.

In addition, the recent final report from the governor's Commission on Waste, Fraud, and Abuse identifies other, mostly administrative, savings to the state. Suggestions in the report aimed at internal savings include changes to overtime policies, better uses of technology in order to improve efficiency, and greater use of quality assurance systems for infrastructure projects.

Balancing the state budget with significant internal cost-cutting, as opposed merely to passing the cuts along to local governments, is a laudable goal. If it rights the state's financial house, it has the potential to benefit taxpayers today and tomorrow. What remains to be seen, however, is the extent to which a balanced budget will empower state policymakers to invest in service quality and/or access.

What if Wisconsin were to be at the forefront of a new wave of policymaking: one where policy and budget decisions were made based on citizens' needs and desires, programs' efficacy and outcomes, and statewide strategic goals?

Author: 
Anneliese Dickman