Charles Arlinghaus: Exciting wins elections, but boring governs wellBY CHARLES ARLINGHAUS
July 23. 2013 5:28PM
THE HARDEST THING for any government to do is to pay attention to the long term. The system creates incentives for politicians to focus on short-term solutions and ignore long-term outlooks. The inability to look beyond this morning's political fight defines the dysfunctional entity that passes for a federal government, and it has crept into our state politics as well.
Policy is made by elected officials, usually in two-year increments. Things that will turn out beneficial five or six years from now are of less interest. The federal budget is case study in this short-term thinking. There is no requirement to balance the budget, so politicians don't. As a result, the country's debt has grown every year since 1957. It grew from $5.8 trillion to $16.9 trillion just in the last 12 years.
The benefits of balancing the budget would accrue over time, but the pain would be immediate.
Federal politicians are incapable of balancing the budget because they don't have to. At the state level, we have to. But even with that restraint, some decisions are passed off.
An example of state budget cutting was the 2011 state budget. One elected official explained to me: "We spent every dime had. We just didn't spend any we didn't have." Whatever cuts were made were dictated not by a policy choice, but by budget necessity. Once revenue was determined, every dime was spent, but no more.
Previous budgets spent more through the introduction of borrowing and two federal bailout programs for states. Those sources were gone, and the budget had to come back to reality.
There are two areas, though, were the incentives don't align: state debt and infrastructure.
The state's debt skyrocketed in the period from 2007-2011 after having been steady for more than a decade under governors of both parties. The debt explosion saw the state's debt climb from $654 million to $939 million in just four years. New Hampshire's debt is still good by national standards, and the growth has slowed since. But it was easier for some politicians to borrow money than not to spend it.
Transportation spending also presents an incentive problem. In general terms, we don't raise enough money to pay for maintaining the current transportation system. Gas tax receipts are almost identical to what they were 10 years ago before adjusting for inflation, even though spending has increased 72 percent. Gimmicks have made up the difference. The turnpike paid $100 million to the highway fund for a few miles of highway and accelerated the payments over a few years. In addition, a temporary and regressive motor vehicle surcharge plus a one-time federal stimulus grant plugged holes temporarily.
The difficulty is that bridges last 75 to 100 years and no one can campaign on "we completed routine maintenance that will extend the bridge's life to 2040."
Sound fiscal management is boring and boring doesn't win elections. I wish it did.
Charles M. Arlinghaus is president of the Josiah Bartlett Center for Public Policy, a free-market think tank in Concord.