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July 30, 2014

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Rooting out waste, abuse alone won’t close budget deficit

Fraud! Waste! Abuse! It is often politicians’ and taxpayers’ rote answers to any budget deficit. No matter the amount of additional funding needed to balance a budget, it can found through improving efficiency and rooting out bad spending, the argument goes.

Lawmakers and activists who plan to make that argument as the 2011 Legislature grapples with the state budget got some ammunition Wednesday. A legislative audit found current or former state employees double-dipping to the tune of $11.6 million in state consulting contracts.

Some of the examples were stomach churning:

• A $350-an-hour contract that began the moment a worker retired from state employment.

• A state employee billing for 25 hours of work in a 24-hour period.

• Eight examples of state workers doing consulting work for the state during normal work hours, or unable to document that they did the job on their own time.

Conservatives, needless to say, were salivating.

“So ... Nevada agencies paying $350/hr for contracted services can’t find places to cut? What were those budget numbers again ...?” tweeted Elizabeth Crum, editor of the Nevada News Bureau, an online news source, and a conservative blogger.

One senior state worker bemoaned how these findings would be held up time and again by ideologues as proof the state doesn’t need to raise taxes to fill its budget deficit, estimated by the Sun at about $2.2 billion.

Here’s the reality: There is waste in Nevada state government, as there is in any organization. But it isn’t anywhere near enough to solve the state’s budget crisis.

Assemblywoman Debbie Smith, D-Sparks, and the incoming chairwoman of the Assembly Ways and Means Committee, said she hopes the audits send a positive message to taxpayers: The state is doing its best to spend the money it has wisely.

“This is an example of how we can do the budget better, and regain public trust,” said Smith, who sponsored a bill requiring the audit and other reporting requirements. The bill was vetoed by Gov. Jim Gibbons last session but overridden by lawmakers.

Still, Smith maintained, rooting out the fraud and waste wouldn’t find enough savings to close the budget deficit.

The years of lean budgets have, or at least should have, spurred internal cost savings and soul searching within state agencies.

Take, for example, what has happened to medication funding for the mentally ill and developmentally disabled in recent years. The 2009 Legislature cut funding by $20.6 million, or 30.3 percent, compared with what was approved by the 2007 Legislature. This came about not with any cut in services to these vulnerable individuals, but by diverting state-funded patients to Medicaid and Medicare (paid for by federal dollars), increasing the use of free medications and using better inventory controls — all uncontroversial changes.

The contractor audit brought about by Smith’s bill required the examination of only a portion of state consultants. The Gibbons administration has worked to shield from the Legislature a complete accounting of consultants.

This means the $11.6 million in suspect spending found by the audit released Wednesday might not represent all potential waste. Yet alongside the billions the state needs, it can almost appear irrelevant.

Not so in the tax debate that has begun.

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  1. A person who quits their State job and returns as a 'consultant' at many times their State salary has been TRAINED by the STATE on taxpayer money. They received PROPRIETARY Information and were simultaneously being paid to learn it! That is outrageous.

    That person should repay the State for the training out of their consulting fees. The public should not have to bear the educational expenses for personal profit.

    Jim Gibbons vetoed the bill to prevent this. Good Riddance.

  2. As I've said before, a panel of ordinary citizens could sit down with a line-item copy of the state's budget and find many, many ways to trim the budget to get it in balance with revenue. So, why can't politicians do this? Because they are beholden to special interest groups, contributors to their campaigns and the like. Also, they fear the negative press they will get by the liberal media when they have to make the tough choices. We need people in Carson City who care more about the state of Nevada than they do about themselves. Is Governor Sandoval such an individual? Time will tell.

  3. To SunJon: Your example shows how a citizen can identify ways to trim the budget. Good job! Too bad politicians can't do this.

  4. That is from one small audit. What would a bigger audit reveal? What if we put the entire state checkbook online?

    It won't cover your $2.2 billion figure but it will generate a few million more and every dollar counts.

    Also, why the rush to assume that every dollar spent was spent on something necessary? The budget needs to be evaluated EVERY biennium. Do we need that many government workers or can technology be substituted? Do we need to be giving pay raises that exceed inflation?

    Then lets look at government services.

    Do we need an agency to grow trees and plants? No

    Do we need unsustainable pensions and generous medical subsidies for retired government workers living on those generous pensions? No and no.

    Do we need $290 million to go to class size reduction? (No, research shows class size reduction is likely to have no effect 72 percent of the research shows exactly that, according to Eric Hanushek at Stanford).

    Does the basic support per pupil need to exceed population growth and inflation combined? It has, and the answer is no.

    If the state is subsidizing local taxes for education if it falls short, why are we allowing local governments to operate gun ranges and golf courses?

    Finally, lease the state highways and sell land to build a private toll road between Vegas and Reno. We could even drop the gas tax to reflect the fact that the state will no longer be paying for road maintenance on those highways. This sale alone could cover the budget shortfall.

    No taxes need to be raised. http://prgibbons.blogspot.com/2010/11/ev...

  5. In addition to "waste, fraud, etc." let's add a large word that is being avoided---UNNECESSARY! There are programs that don't just need to be trimmed---they need to be eliminated. Put a panel of taxpaying, working-class citizens together, give them a line item copy of the budget and see what they can identify as unnecessary. Or does Carson City dare do that?