East TN Conservative

From here

The words you’re hearing and reading everywhere you turn in America right now — “government money” — these words are meaningless. They are a cruel delusion. There is no such thing as “government money.”

Our government does not now have, nor has it ever had, a single penny of its own. Our government makes no goods. Our government provides no saleable service. Our government has never, ever, ever, ever produced a single commodity or penny of wealth for anyone under the sun.

Our government is nothing really but a mooching relative permanently taking up residence upon our living room couch, eating our food, drinking our beer, consuming our munchies, and leaving us nothing but its garbage.

During my two-year tenure on the “government money” payroll, I learned the foundational error that now greatly accounts for the financial meltdown of America and a public debt of nearly a trillion dollars.

Our civil engineering department had a yearly budget, paid for by “government money.” The object of the budget writers was to get more money in the coming year than they had gotten in the last year. To this end, whenever the fiscal year’s end approached, there was a mad dash — fully sanctioned by every university employee, from the president to the deans to the department heads to the lowliest secretary — to spend, spend, spend until not a single penny was left in the budget unspent.

Frivolous, wasteful, purely gluttonous spending on completely unnecessary things was the order of the day and every employee got quickly into the hang of it. Imagine an outlandishly high credit limit on a credit card for which the bills never arrive at one’s own door. No luxury was considered too luxurious in the mad dash to spend every penny of allocated “government money.” The theory was that if a budget wasn’t spent out, then the higher-up bureaucrats would cut next year’s budget instead of increasing it.

From here

In my six years as City Manager in Mt. Juliet, I was most proud that my team of department heads managed to turn unspent money back in to the city’s general fund every year for six straight years. The amount averaged about 6%. We were able to do this because of a conscious decision on the part of the senior staff that this was the right thing to do, and my pledge to them that they would not be penalized when the next year’s budget was being formulated. To back that up, we froze purchase orders about 5 days into the last month of the fiscal year. The finance department had orders NOT to issue ANY purchase orders. Emergencies and exceptions had to be negotiated with the City Manager.

It worked. We saved the City about $2.5 million over six years.

There is another innovative practice I have heard about, but never got a chance to implement. In Oregon, City Manager Scott Lazenby has led his city in adopting a two-year budget. Department heads are ecouraged to economize wherever possible. Any operating funds NOT spent during the first fiscal year are kept in the department budget and can be used for capital projects (subject to approval by the City Manager and City Council). It appears to work well.

My $.02 is that if leaders (both elected and appointed) pay attention, lay out the ground rules clearly, and lead by example that the budget excesses can be avoided.