The Edmond Sun

January 7, 2013

Let’s measure costs, benefits of government programs

Brandon Dutcher
Special to The Sun

OKLA. CITY — In a lengthy news article last month (“Brownback says his changes in Kansas are a model for the nation”), The Kansas City Star reported that Kansas Gov. Sam Brownback has pushed through aggressive income-tax cuts, eliminated thousands of government jobs and reformed the state’s Medicaid system.

He also has reduced the welfare rolls in Kansas. “Among other things,” the Star reports, “the changes shortened lifetime limits for welfare recipients and began counting the income of a live-in boyfriend or girlfriend to decide how much a household receives.”

What’s more, the Star reports, Gov. Brownback “is just getting started. Now, backed with a growing legislative majority of conservative Republicans, Brownback stands ready to amp up his remake of state government in Kansas. His unapologetically bold agenda, backed with mounting political power, makes Kansas a proving ground for a range of conservative theory.”

Edmond residents might be especially interested in this nugget from the Star’s reporting: “Perhaps no one is more pivotal in Brownback’s call to limit spending than one of his first appointees, budget director Steve Anderson.” Mr. Anderson is a longtime Edmond accountant and a longtime research fellow at the Oklahoma Council of Public Affairs, a free-market think tank.

One idea Anderson proposed several years ago for Oklahoma is now a reality — in Kansas. Forbes writer Ralph Benko notes that Anderson “is pioneering a method of accounting that holds government programs accountable for their cost-effectiveness — just like private-sector companies have to be. He’s posted it to the Kansas Budget Director’s Office website for the world to emulate. This is revolutionary.”

Sad but true: Common sense is now considered “revolutionary.”

That’s not the only national attention Anderson’s idea has received. As former Oklahoma finance director Tom Daxon recently explained in The Washington Examiner, “current accounting reviews tell us little about the actual cost of services and even less about whether those services actually accomplished their goals.” But Kansas “has introduced a dramatic new approach to report the costs and benefits of state programs. The effort’s early success helped give Kansas legislators the resolve to enact the biggest tax cut in state history, while balancing the budget. Kansas reduced 4,000 bureaucratic positions — mostly by attrition — and turned a half-billion-dollar deficit into a half-billion-dollar surplus.”

Daxon, himself the author of the 2009 OCPA report “Enhanced Financial Reporting for State Government: Comparing Cost to Performance,” says the key is to “insist that actual goals be established for each program and then measure progress toward those goals, both in terms of cost and effectiveness. … Then when opponents ask, ‘Which programs do you suggest we cut?’ the answer would be, ‘Those that aren’t meeting their goals.’ Or, ‘Those whose benefits don’t justify the cost.’”

Here’s hoping Oklahoma’s political leaders will follow Kansas’s lead and implement this Cost Management System in our state.

Doing so will help realize Gov. Mary Fallin’s vision — articulated in her foreword to last year’s edition of “Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index” — of lower taxes and right-sized, effective state government.

 

BRANDON DUTCHER, an Edmond resident, is vice president for policy at the Oklahoma Council of Public Affairs, a free-market think tank.