Totem Poles and Money Pleas – Cost-Benefit for Local Governments

“Your love gives me such a thrill, but your loving don’t pay my bills. Give me money. That’s what I want. Give me money. That’s what I want… ”

Barrett Strong, The Beatles, Cheap Trick, and the Flying Lizards belted out that parody of greed to several generations. Now a pickup band of local governments are doing karaoke versions.

There’s Avon leadership musing about bulldozing voters. There’s the hapless Town of Eagle angling for more tax dollars despite a public relations tempest.

Vail is building a pricey freeway underpass with money taken from you, then passed through a government shell game and handed back as if it is a gift from a rich aunt.

WECMRD dreams about more tax money to expand its money losing facilities. The local public school industry is jingling its cup for more, too.

What Value Do Citizens Get?

Politicians ask, “what do you want?”  Economists ask, “what do you want more?” Economists spotlight the tradeoffs that politicians prefer to ignore.

Higher taxes means less money and a longer workweek for you forever: Lower retirement savings, more painful healthcare bills, on and on.

The US Bureau of Economic Analysis says government spent $46,000 per household last year.  Silhouette that against national median household income of $53,000.

Colorado’s no-b.s. former Democratic Governor Dick Lamm recently wrote, “…public policy seldom asks, ‘What are we getting for our money?'”  No one knows, although the Obama Administration has an infant effort attempting to find out.

Meanwhile, our public officials spend money like a Trump wedding. Local governments in Eagle County burn through more than $20,000 per household per year.

Rank local programs on a totem pole from best to worst. If the money can do more good in a different program or at home, that’s where it should go.

We do not know what tax our money is buying.  We are overdriving our headlights.

Eazy-Peazy Cost-Benefit

Here is a simple five step program to totem-pole the spending. Obama’s Office of Management and Budget recommends it.

Step 1.  Have goals. Specific, measurable goals. With milestones and dates.

Step 2. Calculate the benefits in dollars.  There will be some assumptions. Identify them.  Debate them publicly.

Step 3. Calculate the costs. Then subtract the costs from the benefits.  This is the famed cost-benefit analysis.

Programs that fail a cost-benefit analysis waste money.  They destroy social value.  The premature part of premature building projects land here.  Walk by the county jail for a sparkling example.

Step 4. There’s more than one way to do most everything. Choose the least costly. This is a cost-efficiency test.

The cost-benefit and cost-efficiency tests work together hand-in-hand.

  1. a) For example, when the benefits of a park expenditure are larger than the costs, the spending successfully passes a cost-benefit analysis.
  1. b) Next, if there are other ways to reach the same goal with less money, the spending fails the cost-efficiency test.

If people prefer to spend the same dollars on a different form of recreation – perhaps yoga, climbing, or calf roping – the park money fails the cost-efficiency test. It wastes money.  It is a self-inflicted social wound.

Step 5.  Things change. Assess progress against their goals periodically.  Rerun the cost-benefit and cost-efficiency analyses often.  Sunset every program.  Question everything continuously.

Accounting Accountability

Further, any high school grad with a spreadsheet should be able to duplicate both analyses.

Further still, organizational self-advocacy sets off credibility alarms. As cartoonist Gary Trudeau once put it, such efforts attempt to “scenario you rosily”.

On the plus side, most organizations have insiders who see where their team can do a much better job. Even the top dogs can feel muzzled sometimes. So citizens, be generous applying pressure. It helps pop loose fresh thinking inside organizations.

Progressives often express frustration that citizens see government as inefficient and bloated.  Totem-poling the expenditures demonstrates the competency necessary to broaden support for progressive programs.

Good government does not flog its citizens to spend their hard earned rent money and old-age savings on programs that stumble endlessly toward shimmering, ungraspable goals.

It is time the public institutions that spend their lives spending our money prove their effectiveness.

Show us the evidence.

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A version of this article was published by the Vail Daily on March 4, 2016.

 

 

 

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