There’s a shell game in government that makes it nearly impossible for you and I to stop the runaway spending. Worse, it’s designed to get you to focus on a seemingly insoluble problem far away, while the real solution lies just down the street, practically in your own backyard.
Let me use the concrete example of Lehigh County, Pennsylvania, to show how this masterful diversion plays out. I’m sure it works much the same where you live. [Disclosure: I'm currently running for Lehigh County executive, which is why I'm learning about this.]
How they avoid tar and feathers
Three-quarters of the Lehigh County budget ($305 million) is “pass-through” money that comes from the state and federal governments. We send our money to Gov. Ed Rendell. He launders it, it shrinks, and then he sends it back to us with careful instructions on how we may use it. There are 67 counties in the Commonwealth of Pennsylvania that operate by the same principle. Multiply that by 3,141 counties (or parishes, etc.) nationwide and you get a sense of the scope and impact.
Lehigh County Executive Don Cunningham has increased spending by $60 million since 2006 and plans to bump it up another $7.6 million in 2010. If he had to raise local property taxes to do that, he’d still be picking tar and feathers out of his ears and armpits.
However, because $35 million of that increase came in the form of “pass through” dollars, at “no cost” (as he says) to county taxpayers, he’s hailed as a hero, a fiscal genius, and a sound business manager. The rest of the increase, by the way, came out of the county’s reserve funds at “no-cost” to local taxpayers — at least until that piggy bank is empty in 2011.
How could we let this happen?
Most folks have no idea what’s happening in their county government. Virtually no local journalists delve into the details of the budget. They’re spoon-fed talking points by elected officials. They faithfully regurgitate that PR pabulum and call it “news.”
Let’s look at the real impact of this shell game — both locally and on a broader scale.
The Commonwealth of Pennsylvania currently suffers a $3.5 billion deficit, and the federal government is broke as well. So where did Gov. Rendell get the $305 million that he’s sending to Lehigh County this year?
Answer: From your future tax increase.
The devastation of “free money”
With thousands of local politicians like Don Cunningham nationwide telling their constituents they’ve brought home “free money,” the impact on state and national spending is staggering. When we don’t pay for local services with local dollars, we simply pass the cost on to a government with broader taxing and borrowing power. In reality, the majority of local government expenditures are put on what we might call a “Capitol One Visa” — the credit card that jeopardizes the financial stability of the entire nation.
But for your own local “Don Cunningham” character, there’s no downside, no blame, no accountability. We applaud him for the very actions that will devastate and bankrupt our nation.
The inequity of getting our “fair share”
To hear them tell it, members of Congress, state legislators, county officials, and school board members are just trying to make sure their constituents get their “fair share.” Local politicians say they’re simply complying with state mandates and trying to avoid a local tax increase. And all of this has been done in the name of fairness (an idea no one may oppose), redistributing the wealth evenly over the population of the state or nation.
But there’s no equitable or rational process for divvying up the so-called “fair shares.” Instead, local projects become bargaining chips among lawmakers, pressured by lobbyists. The lobbyists represent those who stand to gain the most from the projects — the vendors and the people who want to receive free stuff from the government.
Any salesman can tell you that it’s much easier to sell to someone who’s using other people’s money to pay, especially if the other people aren’t in the room to hear the pitch.
You don’t have to compete on price. You just have to convince the customer that it will make him look good and get him reelected. Lawmakers receive an endless parade of people seeking government contracts or free services. Notably missing from the parade are the people who will pay for all of it.
The secret of remote-control government
Most local projects and programs would never happen if local officials had to convince local people to pay for them with local taxes. Here’s the secret of what I call “remote-control government.” It allows local politicians to pose for photographs, heroically handing out giant checks for programs and projects with “no cost” to local taxpayers.
There’s no chance that the right projects and programs will get done for the right reasons. There’s no chance that any of it will be done in a fiscally responsible manner.