Real restructuring needs a long lens

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By Sherry Robinson

Here’s an axiom for this year: Cliches and platitudes will grow in inverse proportion to the state’s budget.

We will “pick the low-hanging fruit,” “tighten our belts,” “share the pain” and “bite the bullet.”

As legislators debate all the ways for the state to pay its bills this year, some are taking a longer view. Even without an economic downturn, there’s no way the state could maintain the trajectory of its spending. It’s time, they say, to restructure state government.

 “Some lay all the problems we’re having to the national recession,” said Sen. Sander Rue, an Albuquerque Republican. “Others see this as an opportunity to do an in-depth analysis of state government and look at where we have inefficiency, waste and redundancy.”

A committee chaired by former Gov. Garrey Carruthers took the first crack. Their recommendations to the governor included combining departments, changing Medicaid benefits and adjusting the public school funding formula.

The proposed mergers are intriguing, but it sounds like rearranging the furniture. I moved here when Gov. Jerry Apodaca was restructuring state government and I’ve watched all these departments evolve to meet perceived needs. For example, the tourism industry lobbied for years to get its own cabinet secretary.

In the long run, the committee would reduce the number of colleges and universities and cut the number of school districts. Good luck. This has been proposed before and it’s a stab in the heart to rural communities. Who wants to tell a town its beloved community college or branch campus is closing? Or that K-12 decisions will now be made in some distant office?

We can’t know without study whether these moves will improve efficiency. Such studies are usually costly, but they could be done in-house and should involve state employees, current and retired. The governor would do well to make this study part of his legacy.

While we’re looking down the road, let’s get real about tax cuts. In 2003 the governor and a giddy Legislature ignored past lessons — namely that the economy rises and the economy falls — and rolled back tax rates. It was a feel-good gesture that earned our ambitious chief executive kind mention in Forbes as the “tax-cutting Democrat.”

Conservatives like to point out that once the state levies a tax, it’s hard to get rid of it. It’s also true that once you reduce tax rates, it’s equally hard to raise them again. We’ve seen in Washington and in New Mexico that reducing taxes deepens the deficit without producing any big bump in the economy.

Why? Bruce Bartlett, an early Reaganite and supply-sider, makes the case in his new book, “The New American Economy: The Failure of Reaganomics and a New Way Forward,” that old solutions don’t work in a new world.

Bartlett walks us through economic history. To Democrats, government programs were the answer to the Depression and a way to weave a safety net; that solution wasn’t working by the time Jimmy Carter was facing stagflation. The solution to that particular problem was supply-side tax cutting. We now have different problems — deflation, debt and shrinking incomes and tax cuts are no longer the fix.

Sander Rue asks a good question: What do we expect from state government?

Bartlett, a realist, seems to answer that when he said the public wants a certain level of entitlements, which is why the conservatives’ goal of “starving the beast” fizzled. Look at what happened when the last president tried to privatize Social Security. But there’s still resistance to too much government; witness the fallout for this president over bailouts and health care reform.    

Restructuring means defining what we want from state government and finding a way to sustain it through fair, predictable taxation — not the same sorry cycle of tax cuts and tax hikes.

© New Mexico News Services 2010