Bonds for school construction wrong route for cash-strapped state - East Valley Tribune: Opinion

Bonds for school construction wrong route for cash-strapped state

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Posted: Friday, June 27, 2008 9:52 pm | Updated: 9:16 pm, Fri Oct 7, 2011.

Our projected $1.9 billion state budget deficit had to be resolved. Unfortunately, other than a recent article suggesting cutting spending, any sound policy suggestions for solving the problem were few and far between.

The governor's solution is to bond our way out of the debt problem by creating more debt - the "when you're in a hole, keep digging" philosophy. Evidently she does not heed the advice of one of her party's leaders, Gov. John Corzine of New Jersey; nor does our Legislature. In Corzine's recent State of the State speech, he said that bonding for school construction was the greatest fiscal blunder New Jersey ever made.

According to Corzine, his state spends more on paying bond debt than it pays for operating its schools. New Jersey does not have enough money left for education. The point being that there is no money for teachers because of the state commitment to pay construction bonds. It's kind of an entitlement program for banks, because once started the debt habit is perpetual and hard to break. This undercuts the ability to keep up with teacher salaries.

If Gov. Janet Napolitano had taken the advice of her Democrat colleague, she would have avoided bonding debt that mortgages the future of our children and our teachers.

Another must item is to reduce expenditures. Cutting spending will be difficult because neither the Legislature nor the governor knows, or can find out, what our unit costs are for the goods or services state agencies provide. Oh sure, we know how much they spend, but when it comes to breaking agency expenditures down into line-item cost accounting (the same that contractors have to submit to the state), the agencies will not do it. It's not that they can't - they won't!

Agencies analyze each line-item cost in a contract bid submitted to the agencies. They do this to evaluate and compare contractor's unit costs. If you do not know your unit costs, you can't determine where you can cut spending and save money. We can't make this same evaluation of agency costs.

We know the governor can't find out her complete unit costs. Maybe she doesn't want to find out. Such information might disclose waste in the agencies. I challenge every reporter in the state to find out and tell us the complete line item costs for the goods and services provided by just one state agency - just one. You can't do it! The government makes sure these numbers are conveniently not available.

The Legislature should put a bill on the governor's desk requiring every state agency to adopt an accounting method disclosing our complete unit costs for the goods and services the agencies provide. Then the governor and the Legislature may have the information necessary to determine what and where cuts can be made in government spending and hopefully balance our budget in the future. Of course, that will never happen because people could be held accountable.

Bill Sandry lives in Mesa.

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