In July 1995 William Sorrell, administration secretary for Gov. Howard Dean, released a list of 59 "cost-shrinking ideas" for state government, to meet that year's fiscal crunch. The great majority of them proved to be pious hopes unsupported by analysis, schemes for reshuffling bureaucracies, and earnest entreaties to "promote efficiencies." Few if any were ever implemented, but somehow Vermont made it through 1996.
Now, 14 years later, the governor and legislators are facing a total of $66 million in general fund reductions to meet expected revenue shortfalls in Fiscal Year 2009, with upwards of $176 million more necessary for FY 2010.
On Dec. 17 the Joint Fiscal Office released a "master list of reduction ideas," culled from proposals emanating from both the legislature and the administration.
Most of the 140 proposals are predictable: freeze spending on vehicles and space leases; impose reductions in force (layoffs); leave vacant positions unfilled; deplete special funds with unused balances, reorganize bureaus, scrap non-productive boards and commissions, increase fees, premiums and co-payments; reduce or eliminate tax exemptions; and plead for more federal assistance.
Suppose a politically painful but ultimately agreed-to collection of such proposals is adopted by the new legislature. Suppose further that the state can emerge from the hard times, say in 2011, and ride the wave of the Obama economic boom. Then what?
Then as new revenues become available, almost all of next spring's hard-nosed decisions will one by one be reversed. And as soon as the next downturn materializes, governor and legislators will start the same revenue raising and spending reduction exercise that they went through in 1996 and 2009.
There is a way to get off this roller coaster: change the way state government operates. To do that requires investment in a performance review.
Performance review is a careful and deliberate study by knowledgeable and disinterested people of what state government has agreed to do, how it does it, and how what the people want done can be done better and more efficiently. The goal is to balance over the long term the cost of state government's programs and the revenue from taxpayers, without raising taxes that would kill future economic growth.
Performance review has strong bipartisan roots. In Texas, comptrollers John Sharp (D) and Carole Keeton (R) fed hundreds of cost-saving recommendations to Governors Ann Richards (D) and George W. Bush (R), saving Texas taxpayers billions. Michigan Gov. John Engler (R) was soundly reelected in 1996 due to the success of his review called PERM, for Privatize, Eliminate, Retain or Modify.
In fact, the Vermont Democratic platform of 2004 pledged that party to conduct a "top-to-bottom 'performance review' of the functions of state government. To find creative, smart new ways to make government run more efficiently on the resources we have."
Unfortunately, the Democratic legislature elected that year seems to have forgotten this sound proposal, but it's not too late for them to catch up.
It won't be easy to conduct such a review under the fierce and immediate pressure of huge looming deficits. But it must be done, to prevent the state government from stumbling haphazardly on through the recurring cycle of politically-driven program expansion, increased spending, revenue shortfalls, budget reductions, bottoming out, and then expanding all over again until the next recession.
If the Democratic majority in Montpelier needs leadership guidance, they need look no further than their supreme leader, Barack Obama. In naming his director of the Office of Management and Budget Nov. 25, the President-elect said:
"In these challenging times, when we are facing both rising deficits and a sinking economy, budget reform is not an option. It is an imperative. We cannot sustain a system that bleeds billions of taxpayer dollars on programs that have outlived their usefulness, or exist solely because of the power of politicians, lobbyists, or interest groups. We simply cannot afford it.
"This isn't about big government or small government. It's about building a smarter government that focuses on what works. That is why I will ask my new team to think anew and act anew to meet our new challenges.... We will go through our federal budget - page by page, line by line - eliminating those programs we don't need, and insisting that those we do operate in a sensible cost-effective way."
What more incentive do Vermont's Democratic legislators need to set in motion a similar review in our state? Perhaps they should make their first act upon returning to the statehouse this week a reaffirmation of their earlier commitment, by wearing buttons reading "Yes We Can!"
John McClaughry is president of the Ethan Allen Institute (www.ethanallen.org). He was formerly vice chair of the Vermont Senate Education Committee.