Tuesday, September 15, 2015

What should separate government officials from the rest of us? The profit motive!

This is the time of year when members of county councils in each of Indiana’s 92 counties put in many hours away from families and businesses, sitting in public meetings, discussing how your tax money is going to be spent in the year ahead in your county’s towns, libraries and how it will be spent on your county roads. 
If this year is similar to the past several years, there will be much frustration and maybe a few department heads will leave the county council budget hearings in tears. 
Government is a mystery to many of us. It is easy to question the common sense ability and, sometimes, the honesty of those elected to serve us and the people they hire to do the daily work. 
I first went to a government meeting as a reporter in 1973. In 1994 I began covering local government on a monthly basis. Each year it is challenging to explain the why and the how behind the budget and spending decisions. 
Mr. XYZ wants to know why his road has potholes while the road 5 miles away has been fixed. That is the kind of complaint I most often hear while sitting in county commissioners meetings. 
The frustration was expressed by a town council member who saw how much money had been approved by the Department of Local Government Finance for the coming year and said, “That’s not much money to run a town.” 
On the way home from the meeting, I thought about the process used to decide how much money is going to be made available for towns and libraries, for roads and streets, I thought of a way to explain our frustration and perhaps ease it just a bit. It’s simple and I’m sure elected officials assume the rest of us already know it. We probably do but let’s think about it for a moment. What is one thing that separates the very best elected officials and public servants from the rest of us when it come to budgeting tax money? It is the difference between service and profit. 
Of course businesses are involved in service. They have to be or they couldn’t entice us to spend money on their product. 
But government doesn’t produce anything. There is no profit motive for those government people who spend hours and hours at the county courthouse, deciding which road is paved or how many people it takes to make your time in line at a given office as short as possible. 
Even though the lack of profit motive seems simple, I don’t think every elected official thinks about it. 
Most of us do the best we can for our families by making a profit. We make it a point to be able to pay all our bills with enough left over for date night and maybe a vacation trip. \We can call this the profit motive and it has served Americans well for hundreds of years.
The best government officials are not seeking a government profit. It is not their job to say at the end of the year, “See how much money we saved that is now setting in Account JKL."
That can back fire because if government doesn’t need all the money they collect in taxes, then let’s lower taxes!
The best government officials seek to provide the best services using the amount of taxes the taxpayers find acceptable.
Remember, there is no profit motive for government servants because government doesn't produce anything. It can only provide services.
Some believe those services should be quite extensive and others think they should be minimal.  Most of us disagree about how much service our government should provide.
So who decides  how much money should be spent?
Local officials? They can only provide services paid for by taxes. Who sets taxes?
There is a big difference between government and the rest of us.  We cannot set the amount of our paycheck we can only control the amount we spend.
But government sets the amount of tax (income) and how much they spend on services.
So the best local officials are completely responsive to our concerns;  right?
Not so fast. If a government official works full time for the government, they want a good paycheck like the rest of us. If they don't work full-time fire the government they still have friends and family members who do.  Even if they have no ties to government workers, those people are voters and taxpayers.
In Indiana the Department of Local Government Finance (DLGF) has the task of approving local budgets that will not plan to spend any more than the amount of tax revenue available to those local government agencies, such as counties, towns and libraries.  
In recent years the DLGF has made many Indiana counties spend less than in the past because tax revenues have dramatically decreased due to a combination of factors including, but not limited to, the recession and property tax cuts. 
We all felt the effects of recession.  There have been job layoffs,  Companies have made less money.
The Indiana Supreme Court forced the state to cut property taxes. Now, property taxes have to be based on what real estate is worth on the open market, which means many property owners have found their tax bills drastically reduced.
That has also meant less money available for local schools. Some taxpayers have publicly expressed their outrage. 
“Our schools need more money so our children have the best education” has been the reasoning of those people. 
Not all have felt that way. One former county commissioner, who is now a judge, Harry Siamis, in Montgomery County, told the press he is in favor of lower property taxes. Now he has more money to spend the way he wants, rather than government spending it for him. 
On the other hand, county councils have found it necessary to slash spending and that frustrates not only them but also local government department heads who ask for “T-H-I-S M-U-C-H" and get (tiny letters) "this much." 

We’ve talked about the difference between profit motive and service motive. Guess what? Government officials have had to cut spending just like those of us who have profit motivation.  
So, what can we do to make life better for everyone? Again, the answer should be obvious: Grow the economy!
After all, that's what we do. We seek the best job we can find. There are many factors we consider before changing jobs but making more money without a similar cost of living increase is a major reason we change. 
In the same way, we need to find ways to increase profit for companies and income for employees without spending a similar amount on our government. 
Simple? Yes. But if we think it through instead of listening to all the rhetoric and being guided by our emotions, we can probably make this country a better place in which to live.