Gov. Mary Fallin issued an executive order on Monday requiring state agency heads to submit written plans for a 10-percent cut in nonessential spending in their agencies.
“I’m asking every agency to start planning for potential spending cuts and to develop a strategy that protects essential services,” said Fallin. “It’s important we get ahead of this issue as we enter a difficult budget year. Families and businesses tighten their belts during lean times; our state agencies can do the same.”
According to a press release from the governor’s office, plans are to include an explanation of how the dollars saved from the reduction will be reallocated to other needs within the agency. The written spending cut plans are due to each agency’s respective Cabinet secretary by Dec. 1. The governor also placed a moratorium on nonessential, taxpayer-funded, out-of-state travel for all state employees. Essential travel is limited to trips that are critical to core state agency functions, maintain professional accreditation unavailable in Oklahoma, are required by the federal government or are necessary to secure or maintain federal funding.
Fallin’s order doesn’t mention “zero-based” budgeting (ZBB), which is where an organization has to justify every penny in its budget. Many states now require state agencies to start at zero and document why they are requesting their budget number. The National Conference of State Legislatures is not a fan of ZBB and claims it is “unworkable.”
The NCSL says: “In its original sense, ZBB meant that no past decisions are taken for granted. Every previous budget decision is up for review. Existing and proposed programs are on an equal footing, and the traditional state practice of altering almost all existing budget lines by small amounts every year or two would be swept away. No state government has ever found this feasible. Even Georgia, where Gov. Jimmy Carter introduced ZBB to state budgeting in 1971, employed a much modified form. To the extent that ZBB has encouraged governors and legislators to take a hard look at the impact of incremental changes in state spending, it produced a significant improvement in state budgeting. But in its classic form – begin all budget evaluations from zero – ZBB is as unworkable as it ever was.”
First, past decisions and appropriations should not be assumed by state agencies. When agencies assume the money they are getting from the state government is their’s and not the taxpayers, government is out of control. As the late Oklahoma Labor Commissioner Brenda Reneau used to say, “government consumes – the private sector creates.” Consume it does!
Second, a 10-percent cut is very reasonable. How many hardworking Oklahomans have been forced to tighten their belts and cut their household budgets by much more than 10 percent? With recent layoffs in the oil industry, many Oklahoma families are struggling and they would gladly take a 10 percent cut vs. a 100 percent one. State agency heads should go beyond the call of duty and cut out all waste.
Third, one size doesn’t fit all. Some state agencies need to cut 20-25 percent, while others may actually need to maintain their funding. Cutting everyone the same amount rewards the state agency that has been padding their budget for years and penalizes the one that has operated in a fiscally conservative matter. Zero-based budgeting would help expose the sandbagger.
Fourth, private industry cuts much deeper than government in tough times. Just this week, ConAgra, the consumer products goods giant, announced they were laying off 1,500 people because they are losing money and sales are down. When government has a revenue/sales shortfall, they just tax more and keep on growing. When performance lacks in the private sector, they reorganize and cut deep. It’s high time we use the private sector’s model for government.
2016 looks to be a very down budget year for Oklahoma government. That is an opportunity to radically change the budget process. Fallin’s EO is a good first step, but until comprehensive performance audits are conducted on every agency or entity that gets a dime of taxpayer money, we are just nibbling around the edges.
Steve Fair is national committeeman for the Oklahoma Republican Party.