What is the state getting for the money it is spending?NOTE: A version of this blog, written by CFM Senior Partner Dave Fiskum, first ran in this space two years ago. As legislators return to the Capitol early next month for the 2015 session, it is appropriate to run it again.
If state government is going to operate more effectively and efficiently, then there are three questions policymakers should ask as they review individual pieces of legislation.
1. Is there an appropriate role for government to play?
This is a question seldom asked, at least on the record. Many policymakers simply assume that, if there is a problem, then there should be a state response to it. The evidence is found in the 3,500 to 5,000 bills introduced every legislative session.
If the question was asked routinely, the answer would not automatically be "yes" or "no," but would depend on the specific situation. Often, the simple act of asking the question and considering the answer would be a step in the direction of aligning state government programs to available resources.
Policymakers should reserve the right to say there is no appropriate role for state government in, for example, a battle between two business groups.
A "yes" answer, by contrast, could apply to a question about organizing health care for indigent Oregonians or offer financial and/or parenting support for single parents and their children.
2. What is the state getting for the money it is spending?
Call this "performance-based contracting." It sounds obvious that state contracts should be based on this premise. But performance-based contracting is the exception rather than the rule. In fact, in social services law in Oregon, the first instance of the use of the phrase occurred in the 2011 legislative session when lawmakers passed and the governor signed Senate Bill 964, now ORS 418.190-195. It deals with programs designed to provide services to Oregon's foster children.
If you are a state government services provider, you should compete for a contract on the basis of what you pledge to deliver. Then, you should keep a contract if you deliver on the pledge — or lose the contract if you don't.
3. How will state action affect the private sector – especially individual and corporate taxpayers on whom the state depends for the money to fund its operations?
Jeb Bush, the former Florida governor, now a nearly declared candidate for President in 2016, wrote this in a Wall Street Journal piece:
"We have to make it easier for people to do the things that allow them to rise. We have to let them compete. We need to let people fight for business. We need to let people take risks. We need to let people fail. We need to let people suffer the consequences of bad decisions. And, we need to let people enjoy the fruits of good decisions, even good luck.
"That is what economic freedom looks like. Freedom to succeed as well as to fail, freedom to do something or to do nothing. People understand this. Freedom of speech, for example, means that we have to put up with a lot of verbal and visual garbage in order to make sure that individuals have the right to say what needs to be said, even when it is inconvenient or unpopular. We forgive the sacrifices of free speech because we value its blessings.
"But when it comes to economic freedom, we are less forgiving of the cycles or growth and loss, and of failure and success that are part of the realities of the marketplace and life itself.
"Increasingly, we have let our elected officials abridge our own economic freedom through the annual passage of thousands of laws and their associated regulations. We see human tragedy and we demand a regulation to prevent it. We see a criminal fraud and we demand more laws. We see an industry dying and we demand it be saved. Each time, we demand, "Do something...anything."
Asking and answering the issues Bush poses would go a long way toward creating appropriate limitations on the role of government, both in Oregon and nationally.
Expecting Oregon policymakers to ask and answer all three of these questions would produce a more effective and efficient state government.