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Ma, We Have A Surplus!

Any plan that is put into effect takes time to yield results – good or bad. The bigger the ship, the longer it takes to turn. When you consider a state or a country’s economy, plans put in place today may take the better part of a year to deliver results.

Iowa’s economy has done well while much of country has suffered, that has been evident over the past few years. Cities in Iowa have been touted as great places to live and conduct business. The fact that it has a budget surplus of a billion dollars is wonderful news, perhaps not completely unexpected that it has a surplus given the upbeat economy.

The question is where did the surplus come from? Democrats point to Governor Culver’s policies. Republicans state that it is because of holding the line on expenses and being fiscally responsible, an argument that did not win them the national election.

It’s still a crapshoot. The public does not know why the surplus exists because of two reasons: First, politicians do not believe in transparency. They promise it but do not deliver it. Secondly, the public has not seen a strategic outlook on programs, investments, expenses and projected results – at any level, municipal, state or federal. I may have been sleeping on the job but I do not recall much material on it. I have read and seen immense debate and disagreement on policy without substantiation. We just spent two billion dollars on a federal election, only to end it in a stalemate.

So now that we have a surplus, what are going to do with it? Governor Branstad and his party have different ideas on how to use it. The Governor wants to use it on property tax cuts and education reforms; an admirable objective. The party wants to give $750 back to each family. I thought we did that in Bush’s presidency, and what did it buy?

The question of how that surplus turned up has not been answered. Wisconsin also has a surplus. However, the thinking is that in Wisconsin it was as a result of slashing the deficit with cuts to education, ending workers’ bargaining rights and making them pay more for health insurance and pension benefits. Now, Governor Walker can use the surplus to reduce taxes and push through his agenda on education reform. So did he over slash and now is going to showcase his generosity?

What should be done with the surplus? If I received $750, I could buy an iPad. But Apple has released record profits. I don’t need to give them more money. I could put it in a retirement plan, but how many people will do that? I can pay credit card bills. You get the point. I don’t know if individually we can do anything substantial with it. I would be concerned that having given the money away, the state may get hit with bad economic news down the road and would cut programs and suffer a deficit in future.

My point is, we need to have a strategic outlook beyond an election term if the country is going to move in an upward direction. If funds are spent on reducing corporate taxes and improving education, what is the return on that investment? How will it be measured? How long will it take to reap benefits? Are those the best ideas in terms of the benefit to the economy?

Let me present one program worthy of consideration. Iowa has spent considerable time, effort and funds on mental health reform. However, the budget for the near future does not have funds allocated to it in terms of implementation of recommended changes in programs, or new initiatives. Why is that? Mental health is in the news every day: gun violence, aging country, forces returning home from conflict, the continued stigma associated with it. Should that be a priority?

This is not an advocacy column for any specific program. The point is that before we take a popular position in how to deal with the surplus, consider the long term implications beyond re-electability. Some years from now we will recall this surplus and wonder what good came of it.

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Author: Shami Dugal holds a Bachelor’s degree in Operations Research from University of Waterloo (Canada) and an MPA from Drake University (Des Moines, Iowa). He can be reached at [email protected]

 

Image courtesy of http://speak-for-yourself.com/2012/02/11/navigating-nervousness-you-can/.

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