Whiting column: Government should model responsible conduct
Every person and institution should model personal responsibility. This includes our government.
Unfunded mandates are an example. Some legislation costs money to implement, but the government doesn’t provide the funds. The cost is passed on to those affected. They don’t have a choice; it’s the law. The economy is negatively affected because the money is spent on the mandate and can’t be spent on other goods and services.
The legislation may seem so desirable that lawmakers don’t think about possible unintended consequences.
Medicaid is a complex example. In simplistic terms, the government leaves 10-50 percent of Medicaid costs to be covered by states. In Colorado, 1.4 million people are under Medicaid — approximately one in four people, more than under Medicare. In 2015, Colorado Medicaid cost $7.4 billion. The government covered an average of 60.5 percent, leaving 39.5 percent or $2.9 billion to Colorado, which is more than 10 percent of the total state budget.
In 2010, Obamacare lowered the qualifying income threshold for Medicaid. Consequently, Colorado had to come up with an additional $450 million to cover its increased share. Our state income didn’t suddenly increase by $450 million. The money had to come from other state needs or programs. We’re not debating the need for Medicaid, but rather the source of its funding.
Schools are subject to unfunded mandates. Specific curricular areas and programs such as health, foreign language, special education, English learners, migratory and at-risk children are a few of those required. Wording in the special education law (Section 504), specifically states that additional funding is not provided. To be fair, some programs are 5-40 percent reimbursed, but that leaves 60-95 percent to be covered by the local school district.
New healthy food regulations have increased the cost of school lunches, increasing the deficit food service programs generate.
New infrastructure regulations such as asbestos abatement, external door security and classroom locks, to name a few, must be funded and met.
School districts end up hiring personnel to monitor compliance and provide the requisite documentation. Roaring Fork School District employs two in this area. One can only imagine the total expenditures nationwide; money that could be spent on classroom teachers.
Schools have limited budgets and must meet these requirements by diverting money from other programs. Again, we’re not debating the need for the regulations, but rather the source of its funding.
Roads become an unfunded mandate. The Interstate system, established in 1956, was needed and is widely utilized. The problem: The state is responsible for 10 percent of the cost for repairs, maintenance and expansion, and that amount only if the federal government agrees to fund the other 90 percent. Other federal highways are covered 60/40, but again federal appropriation must be obtained. CDOT currently has identified $9 billion in immediate road needs with only $1.4 billion in revenue.
Meeting new regulations of any type, whether restaurant sanitation to environment, accounting records to workforce, necessitates additional equipment and personnel costs to meet and enforce. The costs are unfunded and fall to local individuals, businesses, institutions and jurisdictions; usually requiring increased prices or local taxes. In 2014, the Office of Management and Budget estimated the economic cost of regulatory compliance at $1.9 trillion, with at least 10 percent of regulations either unneeded or duplicated elsewhere.
It would be helpful to attach an expiration date and cost to new regulation, require legislative approval of agency-generated regulations and repeal those that have become obsolete.
When we, as individuals, decide on something new, whether it be a new deck or a vacation, we have to be personally responsible and not execute it until we have the money. If my wife says we require a new refrigerator or I require my son to take driver’s education, the money has to accompany the requirement. Sometimes, we decide that the benefit of the requirement is not worth the cost. If our government is to role model personal responsibility, it must do the same.
The government raises money through taxes, and no one likes taxes, but government is in a position to do so in a more efficient and equitable fashion than shoving the costs down the road to others.
The government should use its available resources in the most efficient manner. Mile High Stadium is an example. Naming rights have become a marketable commodity, and Mile High has seen names from Invesco to Sports Authority. A company attaching its name may be a valuable marketing exposure, but it does nothing for our state.
Sports Authority’s bankruptcy provides an opportunity. Why not a stadium name that will benefit Colorado? “Colorado Ski Country Stadium” would provide valuable national and international exposure for Colorado and its primary attraction, skiing.
The Broncos require $10 million per year to cover needed updating, repairs and improvements for the stadium, which the naming rights provide. A $5 ticket surcharge (76,125 x $5 x 10 games) would immediately generate $3.8 million. With an average paid ticket price of $209, an additional $5 would not seem to be a debilitating increase. Box seats, which average over $500, could be increased more. The $6 million remaining could come from the $20 million Colorado tourism budget. With 30-second NFL TV ads costing $700,000, spending $6 million on Colorado Ski Country Stadium for 12 months of exposure would be more efficient than most other promotional methods.
The government should role model personal responsibility.
Bryan Whiting believes most of our issues are best solved by personal responsibility and an understanding of nonpartisan economics rather than by government intervention. He retired after 40 years of teaching marketing, entrepreneurship and economics. Comments and column suggestions to: email@example.com.
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