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Tuesday, September 8, 2009

Munsterman Needs Sharper and Bigger Budget Ax

Did anyone else notice that South Dakota gubernatorial candidate Scott Munsterman didn't really answer my question about patching our state deficit without federal stimulus dollars? He did grace me with a reply, complete with tables, which I as a taxpayer, voter, and blogger do appreciate. But upon further review of both that reply and the budget chapter in Munsterman's book, I'm afraid my original assessment of Munsterman's budget talk still stands: nice rhetoric, but no specific or workable roadmap for South Dakota's worsening budget shortfall.

Let's review: my original question was what $71 million worth of programs Munsterman would have cut from the state budget this year instead of taking those dratted federal stimulus dollars. I expanded that question to three parts, wondering what cuts Munsterman would propose for this year, next year, and the biggie, FY2012, the budget year when the new governor has to fill the deficit without federal stimulus dollars. Matthew J. Trask reiterated the basic question in a Hubba's House exclusive interview (complete with Hubba's amusing Madville Times impression ;-) ).

In his replies to Trask and me, Munsterman replies with eager, earnest talk about strategic investment and synergy, benchmarks and performance, all good business lingo that makes the MBAs nod and smile. Munsterman makes the point that he's pulled off this trick before, taking the reins in Brookings in 2001, when the city faced a 10% budget overrun in the midst of a recession. He and the city commission chose budget cuts instead of reserve spending and steered the city toward fiscal stability (see p. 125). In his Hubba's House interview, Munsterman assures us that the good people of Brookings never missed what they cut from the budget.

Data-driven performance assessments are a good idea. I do them to my students all the time. State government can benefit from them as well. Candidate Munsterman appears to think that if he applies such assessments to the bureaucracy that Governor Rounds has inflated (keep pushing that point, Scott!), he'll find all sorts of fat to cut from the budget. On general budgeting principles and long-term planning, Munsterman makes a good business case.

Unfortunately, performance assessments wouldn't have fixed this year's budget, and they won't fix the new governor's first budget. Benchmarks and data take time. We need to collect data for a year just to get a benchmark, then compare the next year's data, then make decisions. Maybe Governor Rounds should have been collecting such benchmarks from day one (and maybe he already does? Bob Mercer, help me out here!), but in the absence of data, Rounds and the Legislature still had to fill a $71 million hole. The governor proposed some ugly cuts, and we mostly chose to take the federal money instead.

Munsterman still has not answered whether, in the absence of the data he needs for solid performance assessments, he would have preferred those cuts (or others) in this year's budget, or next year's.

Ultimately, Munsterman's answers so far on the South Dakota budget remind me of Ewan McGregor and Charlie Boorman motorcycling through Siberia in Long Way Round. At more than one point, the choice before them is to try fording a rough and frigid river on their bikes or wait and catch a lift with a Russian truck. I feel like Munsterman is the happy Swiss cameraman saying, "Well, someone ought to show some leadership and build a really nice bridge."

No kidding someone should build a bridge, but right now, we've got to get across the river! Do we get wet or ride with the Russians? (Please do have fun with the metaphor.)

I've said that on several counts, I like the Munsterman campaign (note: there's a big difference between acknowledging that a machine runs well and saying I want to get in and go for a spin). On this budget discussion, Munsterman is perhaps just campaigning smart: why state any specific budget cuts before you absolutely have to? The campaign needs to promise plenty, not pain. Saying "Well, I'll cut X, Y, and Z" might only alienate the voters (and donors) who benefit from X, Y, and Z.

Of course, such specifics might also demonstrate fearless fiscal leadership.

Fixing the South Dakota budget will take more than mild-mannered MBA talk. In discussing our state's worsening fiscal situation last week, Governor Rounds said that the budget shortfall for next year may be larger than the entire budget for the bureaucracy, the government operations that Munsterman wants to benchmark, assess, and trim. In other words, we could send everyone in Pierre home for the year, and we'd still have a deficit.

Finding a leader who can be fearless in that predicament is no easy task.

p.s.: South Dakota is accepting another $2.25 million in federal money to tackle recidivism. Another $3.2 million in stimulus bucks is building a water tower in Ipswich. Failure of fiscal leadership, or gettin' while the gettin's good?

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