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Tuesday, September 1, 2009

Munsterman: Fill Deficit by Cutting Bureaucracy

For the record: My fiscal questions to South Dakota gubernatorial candidate Scott Munsterman, and his reply:

[CAH]: Where would he have found the $71 million dollars to plug this year's state budget shortfall without accepting federal stimulus dollars? How does he suggest we reduce the state budget so we can send our share of spirit-sapping federal stimulus dollars back in FY2011? And what actions does Candidate Munsterman propose to fill the fiscal chasm that will yawn open again during the first year of the next gubernatorial administration when the stimulus runs out?

[Munsterman, with my emphasis]: All of these questions strike to the core issue – where do we go from here to correct our budget problem? It is time we brought our budget back to zero and prioritize our role for state government. Where would I have found the money to fill the hole last year, this year and for 2011? Within the operation of state government. Fiscal Leadership sets boundaries to the budget. We have significantly expanded the size of state government while not experiencing the same increase in the level of service. In a Munsterman administration the state budget will be based upon realistic revenue projections and the return of fiscal discipline to expenditures. As Governor I will veto any budget that use reserves to fund ongoing programs and which do not coincide with our core goals to move this state forward in a responsible manner. The state has experienced mission drift. We have significant problems funding basic services while at the same time we are expanding services offered. We need to move the state back to a position of financial strength where we adequately fund necessary productive programs, cut the waste in programs that are not producing, and keep taxes low to stimulate economic growth. This is essential in positioning the state for future success. This is established by:
  1. Set a realistic revenue projection for the state. I would have begun with 2007 actual revenue numbers for the 2009 budgeted projections.
  2. Set a policy regarding one time use of funds. Reserves cannot be used towards ongoing expense in operations. This is absolutely fundamental and essential to budgeting.
  3. Develop benchmarks and measure performance of departments and their programs. We need to be able to make good decisions based upon good data.
    1. Expenses must be brought into line with budgeted revenue.
    2. The rate of growth of government must not exceed the rate of growth of the economy.
    3. Here is a history of our expenditure in the Department of Executive Management (for example):

Jobs in Governor's Office and Bureaus of Finance and Management, Administration, Information and Telecommunications, and Personnel 2006–2009
Full Time Employee Growth FTE % increase
2006 654.8
2007 659.3 0.69%
2008 674.3 2.28%
2009 689.3 2.22%
Total Increase in FTEs 34.5 5.27%

South Dakota State Budget
% Increase
Total B of Admin B of Inf/Tech

2006 $ 110,144,926 $ 34,633,874 $ 43,968,915
0.54% 2007 $ 110,735,613 $ 35,230,020 $ 44,913,335
4.88% 2008 $ 116,135,177 $ 36,809,115 $ 45,738,479
16.26% 2009 $ 135,020,308 $ 39,494,251 $ 60,990,737

[Note: all dollar values come from Scott Munsterman; I refigured percentage calculations on my spreadsheet. Rows were misaligned in the spreadsheet Munsterman sent me, so final numbers may vary from those distributed by Munsterman in other communications.]

Our state government has grown close to 1400 jobs in the last 7 years. Some of those are research related and in my opinion necessary for economic development. And yet it is hard to justify the growth in light of the small growth in our overall population. State programs/departments would get a close review of performance. Develop strategies to lower expenses. Do a full review of government programs using a performance based system instead of spending all the money we have and all of the reserves. We need to focus on results and developing “best practices” within programs and department functions. Cuts will have to be made based upon priorities. Not all of these cuts will be popular, but we need to place our resources in programs that work.

I am the only candidate who has a track record to make this happen. Please read my Budget chapter in A Vision for South Dakota. Thanks again! [Scott Munsterman, e-mail to Madville Times, 2009.08.30]

I'm brewing my own commentary, but what do you think? How well did candidate Munsterman answer the question and offer a roadmap for fiscal independence from Uncle Sam?


  1. Dr. Munsterman's answers seem quite general to me. I'll let him off easy there; I suppose that specifics for FY 2011 can't really be formulated until the actual numbers are known.

    I suspect he's going to be shocked at how much positive he'll have to generate in order to overcome the surging tide of minus signs ...

    Some of his remarks do go to the core. I'll repeat them as three questions: Why should our government grow faster than our population? Why should our government grow faster than our economy? Why should our government grow faster than the level of service it provides?

    My answers: It shouldn't. It shouldn't. It shouldn't.

    Scott Munsterman appears to be a true fiscal conservative. We'll need that sort of leader in the coming years, unless we want to become a landlocked, scaled-down clone of Massachusetts or California.

  2. Indeed, there is a strong whiff of the general. Performance reviews and benchmarks sound good, but I wonder how quickly one can establish such measures. Are they a solution right away, or do we still need federal assistance for a couple more years while we gather our data?

    Government growth: I can think of situations where one could justify growing government faster than the population or the economy. If the state has been lagging in a certain area, it may have to bulk up faster than usual.

  3. Munsterman may appear to be a fiscal conservative, but the Republicans in office talk that way on the campaign trail as well... and they're the ones who have produced the government growth Munsterman criticizes.

  4. The Republicans need to "return to their roots," to be sure!

    I agree that government might have to "bulk up" in certain areas. But the converse might then also hold true. In some respects, government could stand to "lose fat."

    The right proportions, the right proportions ... Michael Phelps good, Sydney Greenstreet bad.


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