February 18, 2014
As originally published in the New Hampshire Union Leader
Timid politics makes for bad budgeting. A case in point is Gov. Maggie Hassan’s proposed budget, which isn’t even a good first draft for the Legislature. It is a hodgepodge of mediocre ideas with a little money sprinkled here and there to get her through the speech. But there’s nothing bold or interesting. The speech isn’t even the starting point from which others can work.
The best example of passing the buck is the proposed creation of a new chief operating officer. It is a weird proposal mixed in with a good one. Consolidating small licensing functions into one office so there aren’t dozens of one- and two-person offices is quite sensible. But the creating of a new über executive is quite bizarre.
To begin with, the governor is already chief operating officer of the state. If we hire someone to do her job for her, we would need to stop paying her. The title is ridiculously grandiose for a staff member designated to root out inefficiency.
The governor already had an efficiency commission (sorry, innovation and efficiency; we can’t do anything without adding the word “innovation”). It would have been reasonable to include more of their recommendations in the budget.
But creating an executive senior to everyone except the governor, doing the job the governor’s supposed to do, and with a title that makes him or her seem like a viceroy, is all politics and no substance. In fact, it’s quite similar to the time-honored dodge of creating a commission. The commission helps you avoid responsibility and gives you someone to blame for the recommendations.
A so-called chief operating officer is worse. It sends a clear message: “I want someone else to do the work and be held responsible so I don’t have to be.” This proposal should and will vanish quite quickly.
Every governor always touts having presented a balanced budget even though balance is required by law. The governor went further with some gobbledygook about it being smaller than the 2004 budget. Hogwash. Since that time, hundreds of millions of dollars that used to count as general fund spending have been relabeled as non-general fund. The spending didn’t go away, it was merely relabeled. Politicians need to stop pretending ignorance of that fact.
If you compare apples to apples, spending increased over the last decade by hundreds of millions of dollars. In fact, when you include all funds — federal and all categories of state money — the budget increases by $947 million, nothing to sneeze at.
On tax policy, the governor’s actions were predictable and disappointing. Her revenue estimates are significantly higher than the House’s. When you balance your budget using estimated revenue, every increased estimate is an additional dollar you get to spend.
The two biggest tax increases are old standbys of hers and her predecessor’s. For the better part of the last decade, the two of them turned time and again to raising cigarette taxes. Everyone knows the cigarette tax is among our most regressive taxes, falling much more heavily on the poor. But poor people who smoke are somehow fair game.
And don’t let anyone offer a canard about kids smoking. This is about revenue, pure and simple. In a period of rampant cigarette tax hikes, youth smoking in New Hampshire declined six points, the same amount as the country as a whole.
Speaking of regressive taxes, the other major increase is to car registrations. A flat fee, no matter who you are or how much you have, isn’t exactly progressive. But increasing a fee sounds more palatable than, say, raising the gas tax would. It’s not good policy, but timid politics never are.
Finally comes innovation. Extending the MBTA train over the border is very innovative in a 19th century sort of way. Even that has no money. We’ll spend $4 million up front and then hope for a miracle. Massachusetts, in the middle of a budget crisis that has seen significant cuts to the MBTA, is being counted on for $96 million. That seems optimistic, no? For the rest, the governor is hoping for “public-private partnerships,” a wonderfully meaningless phrase.
So much of the budget amounts to talking points designed to get through the speech, but not designed as building blocks for change. In football, they call this punting.