Saturday, April 18, 2009

Budget Crisis

Ideas to Solve the Budget Crisis

Solution sets for solving the budget crisis now include generalities like cutting programs, layoffs, and tax increases, which are aimed at preventing money being spent or at gaining more money.

I like the approach of spending less money but not the idea of layoffs. The only solution set for this dilemma is that of cutting the amounts of all these salaries and wages and benefits that are paid by the taxpayers. Given the economic slowdown, demanding more taxes from the people creates a hardship in meeting these new demands for the same or less services. Boomtime pay cannot continue during economic slowdowns. The need for what these people do continues but are they up to do the job for less money? Must the government entities go bankrupt in order to dodge union intransigence?

This is a moral issue. Do these people want us to scrape up more for them so they can continue as they are now? What about the idea that if everyone takes a pay cut, maybe not so many will be fired? These people are paid from taxes. It is not right to take money from one to give to another for no increase in productivity. They are actually promising less productivity instead of more.

There simply is not the money there was during the boom. Sin dinero ahora. Bloated salaries and benefits crowd the budget. We’re being taxed to pay consultants, directors and other bureaucrats. We’re being taxed to build more and more roads when public transportation is the need and would also provide cleaner air and local long term jobs instead of boom construction. We are taxed to provide benefits for government workers when privatizing benefits would relieve the state of insurance responsibilities and would probably result in lower costs for consumers because of competition among insurers or clinics.

People do not want to pay more taxes. Cut the pay of the workers paid by the government, ease off on layoffs whenever possible and use attrition instead for cutbacks in personnel. Keeping money in the hands of more people will result in a more predictable, broad based spending pattern and less unrest among the unemployed and also provides beneficial cuts in unemployment payments and welfare demands. Recent statistics on CNBC might begin a trend to lower prices for consumer goods. Maintaining the standard of living would then be possible after pay cuts if a devaluation trend in USA prices is established. * Debt renegotiation continues in the form of foreclosures, defaults and other failures.

Cutbacks can be made in agencies and programs using a checklist that is doubtless incomplete. Every agency and program and every employee should be subject to cost scrutiny according to this checklist.

Agency and Program cost analysis

Administration: cost amount and as percent of total expenditure
Consultant costs
Employee costs in amount and as compared to program costs as a %
Pay grade analysis as to distribution
Program and agency goals and objectives
Progress achieving those goals and objectives
Union contract demands and renegotiation Etc.

Individual employee charges
Pay grade
Insurance: amount and percent of total costs
Per Diem Ect.

This same analysis would apply to all the schools, including higher education.
The public schools could be given the responsibility for paying for busing out of the existing budget. This is a positive thing in that this would force the school districts to reconsider busing in an attempt to cut costs. Busing could be mostly eliminated in favor of small schools in neighborhoods, which would cut exorbitant transportation costs now subsidized by the state. Analyze the budgets to obtain amounts spent on busing: insurance, fuel, replacement units, maintenance, and personnel. Give this cost back to the districts. How much would that save?

Several questions must be answered in order to determine the level of cuts in pay that could best assist the budgeting process. These are generalities which would generate base data. What % of the budget is pay and what % is benefits? How much could be saved at ascending percentages of pay cuts?

Another problem is the existence of various budgetary entitlements, some of which are scheduled to infinitely increase. The legislature must work together to devise some way to handle non critical entitlements during times of a budget deficit. The schools budgets needs a complete overhaul and a refocus on the learner instead of the bureaucrats raking in top salaries and benefits at taxpayer expense while test scores remain mediocre at best.

Tax money is precious and should not be wasted. Tax money is also finite.

*Prices as a % of income, whatever the unit of measure is used. Stabilized petro prices are to our benefit, it appears.