More than one month ago, Gov. Chet Culver ordered a 10 percent across-the-board cut in the state budget, a percentage more than twice as large as any such cut in the state’s recorded history. The action was intended to balance the budget in the short term (during the current fiscal year), following an 8 percent downward adjustment in the estimated revenue available. The effect is just beginning to be identified, including the local property-tax increases that will inevitably happen to replace the state revenue that local governments lost in the across-the-board cuts.
Over the past few years, budgets have been put together using a series of one-time revenue sources; however, these sources have now been largely depleted. Unfortunately, perhaps tragically, the recession-driven drop in receipts is occurring at precisely the same moment in time as the structural deficit must be confronted. Thus, significant long-term adjustments in state spending are necessary.
Given the magnitude of the challenge, all Iowans should be concerned with how the problems are solved, and Iowans will need to work together to solve them. The process will need to be comprehensive, transparent, and inclusive. The approach that Gov. Terry Branstad used in 1991 with the Governor’s Committee on Government Spending Reform (the “Fisher Commission”) suggests a model that works.
As leaders of the process at that time, here are some of the factors that we believe made it successful.
First, the charge was clear. Branstad understood the nature of a structural deficit. Second, the process was inclusive and bipartisan. Third, roles were clearly and properly defined.
Fourth, the committee provided a structure for the work. Seven task forces were designed around the areas believed to offer the greatest opportunity for efficiencies and/or savings: Collections, Intergovernmental Relations, Privatization, Public Finance, Statewide Service Delivery, and Technology Enhancement. The overall result was supposed to be a downsized, more efficient government that better suits economic, demographic, and technological realities.
Fifth, time was spent on the front end to educate the players about the state budget, the nature of the key drivers of spending, and the reasons behind them. This gave everyone a baseline understanding and even opened the eyes of some veteran state legislators.
Sixth, the process was very open. Members of the media were personally invited and encouraged to attend every meeting of the committee and its task forces.
This brings us to the final, and perhaps most important, factor in the project’s success: accountability. Under the govemor’s direction, progress in implementing the committee’s recommendations was assessed every year and documented and reported.
Major change — permanent change — always entails risk. As was shown in 1991, a good process can go a long ways to anticipate and manage the risks. In following such an approach, Iowans can be confident that today’s historic challenges can be met and turned into opportunities for making Iowa an even greater place to live and work.
David Fisher is a Des Moines businessman and was chairman of the Govemor’s Committee on Government Spending Reform in 1991. Gretchen Tegeler is former director of the Iowa Department of Management and a Des Moines management consultant.