[ABFM] recommendations for handling structural imbalance

Sun Mar 29 11:36:24 EDT 2009

How much of the California problem can be ascribed to the requirement
for a super-majority in the Legislature in order to pass any tax
increases?  If one party takes an absolute no tax pledge (and sticks to
it) then one third plus one in either house is sufficient to  stop any
revenue proposal.  

From: abfm-bounces at aspaonline.org [mailto:abfm-bounces at aspaonline.org]
On Behalf Of Jones, Lawrence (Larry) (CIV)
Sent: Saturday, March 28, 2009 1:01 PM
To: Mikesell, John L.; William Moore; hendrick at uic.edu
Cc: ABFM List
Subject: Re: [ABFM] recommendations for handling structural imbalance

John and All:

Even though I no longer teach state and local finance California is a
great laboratory for the study of the dysfunctional in public budgeting
and finance. You name the problem and we have it. The key cause is the
partisan dynamics of the legislature. Whether the Governor is Republican
or Democrat really doesn't matter. As we said a few years ago and still
say, "Different Governor, same problems." The answer? Obviously it is
(de facto) to borrow to cover the deficit and operations and then keep
rolling up the debt. It worked for NYC from 1961 to 1973-74 so
apparently we have a ways to go before the state won't be able to get a
loan. Until then, how many ways can we find to avoid doing the things
necessary to actually begin to solve our fiscal problems? Every day a
new ploy, gimmick, trick and...onward to infinity!

Larry

Lawrence R. Jones, Ph.D. 

Area Coordinator & Academic Associate for Financial Management

Admiral George F. A. Wagner Founding Chair Professor of Public
Management

Graduate School of Business and Public Policy

Naval Postgraduate School - NPS

550 Dyer Rd.

Monterey, CA  93943-5000

Tel: (831) 656-2482 (w/ voice mail) or 831 402-8826 (cell)

Fax (831) 656-3407 

e-mail: lrjones at nps.edu <mailto:lrjones at nps.edu>  

________________________________

From: abfm-bounces at aspaonline.org on behalf of Mikesell, John L.
Sent: Thu 3/26/2009 5:09 AM
To: 'William Moore'; hendrick at uic.edu
Cc: ABFM List
Subject: Re: [ABFM] recommendations for handling structural imbalance

Indeed.  You have a treasure trove of strange public finance immediately
available.  And California hasn't joined the Streamline group either and
is part of the barrier to getting Congress to change the rules and allow
states to require internet vendors to collect sales/use tax.

-----Original Message-----
From: William Moore [mailto:wmoore2 at csulb.edu]
Sent: Wednesday, March 25, 2009 8:12 PM
To: hendrick at uic.edu; Mikesell, John L.
Cc: ABFM List
Subject: Re: [ABFM] recommendations for handling structural imbalance

Now hold on just one moment about Illinois being so
dysfunctional. The great state of California has the
entire nation beat on that score.

I just love teaching public budgeting and finance here.
The State gives me so much material to discuss in class.

Bill Moore

On Wed, 25 Mar 2009 09:19:59 -0500
  Rebecca Hendrick <hendrick at uic.edu> wrote:
> That's going to be tough as IL can't even play ball with
>itself.   Maybe there's an award for the most
>dysfunctional or least operative state legislature
>(incapable of agreeing on anything useful and avoiding
>all things tough)?
>
> Mikesell, John L. wrote:
>
>>Regarding Illinois and missed sales tax revenue from
>>internet remote vendor sales: Illinois has not joined the
>>streamlined sales tax project -- the group of states who
>>are restructuring their sales taxes to make compliance
>>less burdensome for out of state vendors so that Congress
>>will allow states to require registration of such
>>vendors.  On its own, Illinois is pretty much powerless
>>to get revenue from such sales -- the US Constitution
>>rules out the collection approach that works.  If
>>Illinois wants to close this hole in its base, it needs
>>to start playing ball with the streamline states.   
>>-----Original Message-----
>>From: abfm-bounces at aspaonline.org
>>[mailto:abfm-bounces at aspaonline.org] On Behalf Of Irene
>>Rubin
>>Sent: Tuesday, March 17, 2009 3:49 PM
>>To: ABFM List
>>Subject: [ABFM] recommendations for handling structural
>>imbalance
>>
>>Several folks have asked me to post the results of the
>>advice and comments I received on how to deal with
>>structural imbalance; there was much more than I could
>>easily accommodate in the sound bite format, so I have a
>>longer and shorter version.  If anyone wants the longer
>>version, email me and I will send it along in a few days.
>> I have elaborated on some points people sent, added some
>>of my own, and adapted various recommendations to the
>>Illinois situation.  Not many other states will have just
>>come off such a scandal plagued administration, that
>>created the feeling that no tax increase was possible
>>because the money would just be wasted.
>>----
>>
>>
>>First, the state has to win back the trust of the
>>citizens.  This means
>>finishing the reforms that prevent pay to play, and it
>>means improving the
>>efficiency of state government, and demonstrating those
>>improvements to the
>>public. (Better use of computers and computerization is
>>needed, and improved
>>contract management can save much money; a complaint
>>response system can help build
>>public confidence too.)   It also means more openness.
>>Giving Inspectors General more independence to
>>investigate malfeasance and
>>inefficiency would be a good place to start.  Expanding
>>the auditor general's
>>responsibilities to include more performance auditing, as
>>opposed to just
>>looking at compliance with the laws, might also help.
>> Are programs
>>achieving their intended goals?  The state needs
>>personnel reforms,
>>with more emphasis on professionalism and less on
>>patronage.
>>We also need more intense and credible oversight of
>>contracting.
>>
>> Second, we need a better budget process that allows for
>>prioritization,
>>with citizen input on what the goals of the state ought
>>to be, and better
>>accountability to demonstrate that the goals the citizens
>>approve of are the
>>ones being funded and accomplished.  What is it that the
>>state must do, or
>>should do, and what could be performed better or less
>>expensively at some
>>other level of government or in the private sector?  Is
>>there
>>duplication that can be eliminated?  How can tax breaks
>>be compared to
>>direct government outlays in accomplishing public sector
>>goals?
>>
>>Third, we also need to get more health per dollar spent
>>on medical programs, to get control of health care
>>spending.
>>Part of the solution here may be more emphasis
>> on prevention and on public health, including
>>environmental controls.
>>Pollution is a major contributor to many serious
>>illnesses.  A greener state
>>is also likely to be a healthier state, and one that
>>needs to pay less money for health care.
>>
>>
>>Fourth, the state needs to reform its tax structure.  The
>>sales tax in the
>>state has one of the narrowest bases in the country. We
>>need to tax some
>>services, and there is room for improvement in collecting
>>sales taxes on
>>internet purchases.  The income tax needs to be raised,
>>and in such a way
>>that it does not increase tax burdens on the poor.  We
>>might be able to reduce the dependence of the school
>>districts on property taxes as part of the package.
>>
>>Fifth, we need to sort out the long term causes of fiscal
>>stress from the
>>short term ones, and match the responses to the problems.
>> There needs to be a short term
>>crisis response, and a long term restructuring, but care
>>must be taken not to take steps in the short run
>>that exacerbate the problems in the long run.  Across the
>>board
>>cuts may help balance the budget in the short run, as
>>will hiring freezes,
>>but both will do much harm if repeated multiple times or
>>over a long period.
>>---
>>Sounds like common sense, but nothing has happened yet in
>>the state, except that the governor is proposing to
>>increase the income tax.  There is as yet no movement on
>>any of the other fronts.  Without accountability reforms
>>and budget process reforms that will weed out what is
>>perceived as waste and inefficiency, tax increases are
>>not likely to fly, leaving the state back as square one.
>> the only health care initiative I have seen so far is a
>>proposal to charge retired school teachers who live out
>>of state higher health care premiums.
>>
>>Irene
>>
>>
>>
>>Irene Rubin
>>Professor Emerita, Northern Illinois University
>>131 E. Alden Place
>>Dekalb, Ill  60115
>>irubin at niu.edu
>>815-756-6862
>>
>>_______________________________________________
>>Abfm mailing list
>>Abfm at aspaonline.org
>>http://aspaonline.org/mailman/listinfo/abfm_aspaonline.org
>>
>>_______________________________________________
>>Abfm mailing list
>>Abfm at aspaonline.org
>>http://aspaonline.org/mailman/listinfo/abfm_aspaonline.org
>>
>>
>> 
>>
>
> --
> Rebecca Hendrick, Assoc. Professor
> Public Administration (M/C 278)
> College of Urban Planning and Public Affairs
> 412 S. Peoria St.
> University of Illinois at Chicago
> Chicago, IL  60607
> 312.355.0305(Office)
> 312.243.3970(Home)
> 312.996.8804(fax)
> hendrick at uic.edu
>
>
>
> _______________________________________________
> Abfm mailing list
> Abfm at aspaonline.org
> http://aspaonline.org/mailman/listinfo/abfm_aspaonline.org

***********************************************************
William S. Moore, Ph.D.
Graduate Center for Public Policy and Administration
California State University, Long Beach
1250 Bellflower Blvd., ETec 235
Long Beach, CA 90840
562-985-5593

_______________________________________________
Abfm mailing list
Abfm at aspaonline.org
http://aspaonline.org/mailman/listinfo/abfm_aspaonline.org

-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://aspaonline.org/pipermail/abfm_aspaonline.org/attachments/20090329/7888f111/attachment.html>