Fixing troubled state budgets
Posted by Mitch Kokai at 07:04 AMNorth Carolina is not alone in relying on gimmicks or placeholder provisions to meet its budget obligations, a fact Bloomberg Business Week emphasizes in a new report.
But Peter Coy also points to states that are using a budget crisis as an opportunity for real reform:
Some state lawmakers are using the mess as an opportunity, a chance to ram through reforms to help fix the structural budget imbalances that, if left unaddressed, will plague them for decades to come. New Jersey Republican Governor Chris Christie has forced the state's unionized teachers, for the first time, to pay for part of their health-care coverage. Indiana cut the cost of a prison meal from $1.43 to 99 cents by contracting out the job. Last year Massachusetts Democratic Governor Deval Patrick signed a cost-saving law permitting the use of civilian flaggers for road work, ending the state's status as the only one requiring uniformed police officers at all road construction sites.
Coy makes some other valuable observations, tackling subjects like the “spend and tax” cycle:
States need to set up a mechanism that will tame their own worst instincts—that is, prevent them from caving in to special interests and overspending once the crisis eases. New York Lieutenant Governor Richard Ravitch is proposing an independent review board that would issue quarterly reports on whether the state was making "adequate progress" toward permanent budget balance. If not, the governor would have authority to make across-the-board cuts.
Another “mechanism” to prevent overspending? How about a constitutional amendment limiting government spending increases to inflation plus population growth, one of five good ideas listed here.
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