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Keeping The Expenditure Of Public Dollars Transparent

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By Lowell L. Kalapa
(Released on 12/14/08)

Now that the Council on Revenues has made its pronouncements for the current and ensuing fiscal year, administration officials, and soon lawmakers, will be scrambling to somehow make up the projected budget shortfall of nearly a billion dollars.

Freezing positions, cutting the amount allocated for the purchase of services, and banning out-of-state travel are just some of the ways department officials and staff have explored to pare next year’s expenditures. While many see this daunting task as unbearable, it can also be viewed as an opportunity to ask some critical questions about government.

Let’s start with “privatization” which has engendered such vocal opposition from the public employees unions in the past. This is because it might mean the loss of unionized positions in state government. It is not, as has been argued, a loss of employment. So unlike what the opposition would like the general public to believe, it is merely a shifting of the public side of the ledger to the private side of the employment rolls.

What privatization does have to offer is the flexibility of choosing a provider of services that offers the highest quality with the greatest efficiency. If a provider who has been selected to provide the service does not meet the expectations as outlined in the contract for services, government can solicit another provider at the drop of a hat. A contract can specify when and where the services are to be provided as opposed to providing services within the cookie-cutter parameters of the civil service system.

Finally, to those who would argue that government has no experience with privatization of public services, all one has to do is to point to the numerous purchase of service contracts that state government now has in the health and human service areas.

Is there an upside to privatization for the public employees unions? With increased efficiencies, providing those services through a private vendor would mean that more resources would be available for those public employees remaining on the government payroll. Because of the overlap of the civil service rules and collective bargaining, government cannot respond as quickly to the changing needs of not only the public they serve but also the needs of their employees. As a result, savings could be realized that then could be used to retain other public employees whose jobs are unique to government.

Another area where efficiencies can be achieved but will require an investment on the part of government is in the area of information technology. Many of the tedious jobs in any business involve the collection and storage of information. Records of students in schools, vital statistics, and tax information once recorded manually is now processed by computers. But more could be done to improve the efficiency of the various state departments.

A constant joke among observers is that the state’s computer system is so disparate that the various departments cannot communicate among themselves because their computer systems are so diverse. An example is that a child in foster care could possibly get the same immunization two or three times in the same year from different departments or agencies because there is no one unified computer system that tracks that child.

An area that has already been identified for greater efficiency is the consolidation of schools. As the center of the population moves more to the west on Oahu, schools that were filled to capacity on the east side of Honolulu now echo in silence as the enrollment in those school facilities dwindles. Yet no one neighborhood wants their school closed and their kids sent to another facility a little farther down the road. So the utility bills continue to mount and the custodial care costs associated with each facility that is kept open contribute to the shortfall headache.

Dealing with the economic downturn and the steep decline in revenues won’t be easy and some difficult decisions will have to be made, some of them not very popular. However, if taxpayers want to avoid the alternative – an increase in taxes and fees – then we all will have to learn to live without some of the services and programs that the state and county currently provide. For policymakers at all levels, now is the time to examine what truly are the core services that government needs to provide to insure the health, safety and well being of our community and to decide what is not critical to those core services.

Lowell L. Kalapa is the president of the Tax Foundation of Hawaii. Mr. Kalapa’s commentary is printed each week in the Maui News, West Hawaii Today, Garden Isle News, and the HawaiiReporter.com.


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