How do we know if states (or my state) are acting efficiently with tax dollars and if programs or initiatives are working?
Surprising, we know little from the states themselves. “Of course, our programs are working,” say the elected politicians! “Our programs are more effective than ever!” say the myriad of special interest groups clamoring for more funding. Any internal government report trying to answer these questions is unfortunately often incomplete or is “dated” when the results become available.
Truthfully, we don’t really know because there is no objective measurement from an unbiased source. Once politics enters the equation, loud shouting and name-calling, and fear mongering begins, and in the midst of this shouting match… we do not know what to believe. The tragedy is that waste and inefficiency is undoubtedly occurring, leaving deserving programs without the resources that they need in order to be effective.
Most of the current best work on state government effectiveness comes from academic research. For example, I was able to attend a presentation on the newly released book, The Nature and Causes of the Wealth of States: How Taxes, Energy and Worker Freedom Change Everything, held in Washington, DC. The speakers were engaging and the topics critical for those of us interested in seeing state government work better and provide a greater quality of life for its citizens.
Kansas Governor Sam Brownback opened the discussion with a power point presentation on how Kansas has focused on job creation and low taxes to attract small business jobs. Like or dislike Gov. Brownback, he has a focused plan to increase job creation, especially for small business. Interestingly, Kansas is a state of declining population a point that Brownback rightly observed ‘needs to be changed’ – state services cannot be sustained if the population base gets smaller and its citizens get older. Though based on time delay, the charts and graphs he presented demonstrated that Kansas is now attracting jobs and people from its neighboring states.
Dr. Art Laffer, author of the “Laffer Curve” explained why high tax rates yield less revenue than you would expect and what negative effect high rates have on state economic growth. Always entertaining, Dr. Laffer used both econometric theory and practical examples to demonstrate why his thesis is true but often counterintuitive to state politicians. You would think only raising taxes increases the coffers to state government. But it does not. Higher taxes stimulate more spending increases and the pressure to raise taxes further continues to mount. Over time, businesses and individuals in a higher tax state look for ways to reduce their state tax burden by moving or legally avoiding the increased tax burden. Not a month goes by without one or more states continuing to make this mistake (even worse while their citizens see no significant increase in program return). The book is quite good and I would strongly recommend it for people who want to see how tax policy affects state economic progress.
My point here is not that Dr. Laffer is right or wrong (although personally I think he is right). My point here is we need think about how ideas work in other states before implementing them in our own.
We ask our friends, and search for value by looking to product reviews before we buy products and services ourselves.
Everyday, tens of millions of people purchase products and services and make judgments on those goods and services based on the opinions of those who bought those products and services before. This has resulted in a more vibrant market, improved pricing, providing greater value for the purchaser, and better products and services to meet demand.
In the world of government, ideas from politicians should be vetted in the same way… accepted or rejected based on input from those who have already tried these ideas in their own states, before spending countless dollars based exclusively on political rhetoric and good intentions. Good ideas that make the quality of life better for citizens should be embraced and spread across the nation, but only after there is objective measurement as to their pattern of success. Waste and abuse would be vastly reduced and government would perform at greater effectiveness with greater efficiency.
U.S. Supreme Court Justice Louis Brandeis popularized the phrase, “laboratories of democracy” when referring to the states. This strategy lays out a roadmap for citizens and leaders to measure their ideas against the experience of others before taking action. This will create a climate of exceptional stewardship where learning from the experiences of others is the norm.