Wyoming Liberty Group
The Structured Exit
And now it is official - Senate File 0122 now formally proposes the formation of a Skyfall 2020 commission:
An act relating to the administration of government; creating the Vision 2020 comprehensive expenditure and revenue review; providing for oversight of the review by the management council of the Wyoming legislature; creating the Vision 2020 comprehensive expenditure and revenue review advisory panel; creating areas of review; providing for the creation of task forces as specified; providing for appointment of members to the advisory panel and task forces; providing for assignment of duties as specified; providing for reports; providing an appropriation; and providing for an effective date.
It is good that some legislators have realized the severity of the state's fiscal future. Wyoming needs a comprehensive revision of everything from the state's mono-industrial economy to the fact that we have the highest government employment ratio of all the 50 states. Big bureaucracies and critical dependency on one industry is not a good recipe for future growth and prosperity. Yet it is the cold, hard truth about the Wyoming economy as it looks today.
The question is what the Sky-is-falling 2020 commission is going to actually recommend. The default prediction, based on decades of experience with how politicians handle economic crises, is that the commission will tell Wyoming taxpayers that the sky is falling, seas are rising and cat-size locusts will eat our iPads, but if we all just agree to a state income tax everyone will be happy.
Happiness will be particularly strong among lawmakers who won't have to pass tough spending cuts.
The problem is that tax hikes won't do it. Despite what some pundits may have us believe, higher taxes is the last thing Wyoming needs. The absence of an income tax is one of the few economic variables we have going for us as a state.
What remains is, needless to say, the spending side of the equation. But here, too, it is important to avoid falling for welfare-statist rhetoric: those who proselytize more efficiency in government as the solution to the state's budget crisis will find that their attempt at preserving government, albeit in more affordable shape, is only a stopgap solution to the next budget crisis.
Making government more affordable is a feeble attempt at saving a welfare state that is inherently unaffordable. (For an excellent summary of this argument, see Michael Tanner's foreword to my book Industrial Poverty.) It is akin to asking bureaucrats to run faster and make more decisions per work day. There can certainly be some gains from that kind of so called productivity improvement, but once the maximum of savings is reached - without touching the quality of the product that government provides - more "reforms" for more efficiency will inevitably result in quality losses.
Stepping over the line into quality deterioration is an equally unsustainable solution. A poor-quality government is not a government that taxpayers can afford anymore than a government that delivers quality at today's levels.
The problem that proponents of the efficiency solution overlook is that spending programs that government provides - in other words its promises to the citizenry - remain in place. Those programs have built-in cost-increase parameters: teachers, expected to deliver the same or even better quality education, need regular pay increases; computer software and hardware in our schools need regular upgrades; tax-paid health care must continue to keep up with advancements in medical technology, treatment procedures, etc.
Again: if the welfare statist is ready to see teacher salaries depreciate or bar Medicaid from covering new medicines and treatment, then he or she is advocating a deterioration in government quality.
The only long-term solution to our looming state budget problems is to reform away government spending programs. This means a structured exist from promises such as public education, Medicaid and welfare. A structured exit does two things:
a) It permanently ends taxpayers' responsibility for defined spending programs; and
b) It provides a predictable transition to a private solution, a transition that does not inflict immediate financial hardship on those who currently depend on government with nowhere else to go.
A structured exit from welfare-state entitlements replaces unaffordable government programs with free-market based solutions. This is the route Wyoming needs to take in order to make it through the stormy budgetary waters that lie ahead.
In the coming months Republic Free Choice will roll out a series of publications outlining the theory and the policy practice of a structured exit for Wyoming. Stay tuned.