VIRGINIA / RHODE ISLAND BUDGET CRISIS

Compare and Contrast

Real Sacrifice vs. Real Issue Avoidance

Should Governor revisit the Virginia budget spending plan?

Times are hard, no doubt about it.

Here in Commonwealth of Virginia we are facing a state budget crisis (SEE RECENT POST).

We are not alone. Many other states are also trying to grapple with revenue shortfalls during an era of increasing demands for services… for example the State of Rhode Island the smallest state in America geographically and one of the smaller states in total population.

So it is of interest to the Iconoclast to compare and contrast the two states relative to how they deal with similar budget crises.

Here in Virginia we have a population of 7.1 million people as of the most recent count in 2000, distributed over a 42,774 square mile geographic area. Perhaps two thirds of Virginia’s population lives in urban areas while the other third is suburban or rural. Recent news reports indicate we have a projected $600 million hole in the upcoming budget.

Rhode Island has a population of a tad bit over 1 million people distributed over a highly urbanized and compact 1,214 square miles. According to recent media reports, Rhode Island is facing a similar budget crisis to the tune of a $200 million shortfall.

Considering that Rhode Island has only one seventh the population of Virginia and only about one thirty-fifth of the land area, the $200 million shortfall in Rhode Island is no-doubt as serious if not perhaps a bit more serious than the budget crisis in Virginia.

So how do the two states deal with their respective budget crises?

Here in Virginia Governor Tim Kaine is proposing $300 million in budget cuts and savings and the use of over $300 million out of the Virginia Rainy-day fund to make up the $641 million shortfall. This will include the sacrifice of 74 state worker positions and a 5 percent cut in the Governor’s own state salary.

In Rhode Island, Governor Don Carcieri unveiled a plan that would eliminate 1,016 state worker positions or approximately 7 percent of the total state work force. The Governor’s plan would also call for union concessions and other cuts of spending on social programs.

Ouch… that’s gotta hurt.

So… this comparison shows a remarkable difference in the approach taken by the two Governors in dealing with the pending budget crisis: Eliminate 74 state jobs in Virginia to help reduce a $641 million budget short fall, and eliminate 1,016 jobs in Rhode Island to eliminate a $200 million budget short fall.

Obviously, there are countless other material differences between the two states Virginia and Rhode Island. But without question, population and geographic size are the two single most significant factors that determine the nature and magnitude of public service demands. The more people you have, the more demand for services. The more geographic area you have, the more costly it is to serve those people. Certainly there are many other factors too numerous to mention let alone assess that would have a bearing on the cost of state government services.

In Virginia we have a Democrat Governor in Tim Kaine working with a Republican controlled General Assembly. In Rhode Island they have a Republican Governor in Don Carcieri who works with a Democratic dominated General Assembly. Does this mean anything? Maybe… maybe not… Perhaps this has nothing to do with Republican / Democrat politics.

Maybe, Rhode Island state government is riddled with fat and waste, and a lot of politically protected jobs with little return for the investment. Or maybe Governor Carcieri is just biting the old bullet and taking steps that he knows to be unpleasant and unpopular but actually quite effective in dealing with the budget crisis.

Lots of maybes… But still… the Rhode Island example raises some obvious questions.

After all, with technology advancements in computers, robotics, automation, telecommunications, etc. business and industry has for decades been dramatically reducing its personnel component of operations costs (except for top management) all the while increasing productivity.

Unfortunately, in the public sector, it is easy to expand but it is hard to reduce. When faced with a choice, government tends to just raise taxes rather than to go through the hard process of reinvention and finding ways to do more with less personnel.

Why doesn’t government follow the lead of business and industry more often?

Perhaps Governor Carcieri of Rhode Island is trying to do just that. Maybe he will succeed, maybe he won’t.

Maybe, here in Virginia, instead of borrowing from the rainy day fund, which sounds an awful lot like trying to borrow our way out of debt, Governor Kaine could take a close look at our little sister state to the north in an effort to find meaningful long term solution to our state budget crisis.

This is a tough one. What do our state government elected officials, top administrators, budget managers, or employees have to say about this very thorny issue?

Call me silly, but maybe we need to take a new look at how we budget for state government.