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Opinion Incentives and money in government

Scott Mooneyham, Capitol Press AssociationRALEIGH -- It would be nice to believe that the same motives that drive private sector executives guide the government administrators who control the public purse strings, that government could be like business.

Of course, they don’t, and it’s not.

Government pay isn’t tied to profit margins or rising revenues. Upper and middle management in government receives few, if any, rewards for holding down expenses.

Customer service may not be a big priority of many modern mega-corporations, but the incentives to provide good service to the consumers of government services can be even weaker.

Government agencies at all levels tend to have incentives to spend money rather than save it. Spending all of your appropriated budget allows for making the case that you need more next year.

Politicians and political watchers constantly debate ways to change those incentives.

It’s not easy, though, because government typically provides services that can be inefficient, impractical or create issues of unequal access when provided by private industry. So, government operates schools because, as a society, we believe that the consumers, kids, deserve an equal opportunity to education and that wealth shouldn't act to limit access.

The main incentives within government to provide good service and get bang for the taxpayer buck are public accountability and oversight. If government doesn't deliver, we can get rid of the elected representatives who ultimately head or fund those agencies.

The incentives and motives within government are worth considering as North Carolina’s political leaders prepare to address the state’s current budget woes.

Before Christmas, Democratic Gov. Beverly Perdue hinted that, in the budget proposal that she’ll put forward this winter, she might give state agency heads more flexibility to decide where and how to cut.

Just after Christmas, the presumptive leaders of the state House and Senate — Republican Rep. Thom Tillis of Mecklenburg County and Republican Sen. Phil Berger of Rockingham County — agreed that they might give agency heads a chance to come up with their own spending cuts.

All involved might want to take a hard look at how a decade’s worth of similar budget flexibility has affected the 16-campus University of North Carolina system.

Just in case Perdue, Tillis and Berger have forgotten, during a five-year period of that budget flexibility, the number of university administrators grew twice as fast as the number of students.

Why wouldn’t they? The motives and incentives of the decision-makers -- the university administrators -- became too heavily weighted toward rewarding those like themselves.

Meanwhile, the state's budget writers had literally and figuratively passed the buck. In the process, they lessened public accountability.

Voters didn't elect Perdue, Berger or Tillis to pass the buck, to let folks who operate largely out of the public spotlight and are elected by no one decide how to spend public dollars.

The state constitution calls on them and their elected colleagues to budget the state’s money, in good times and bad. They need to live up to their constitutional duties.





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published: 10/18/2013
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