Editor’s Note-What’s in Your Budget?

Editor’s Note-What’s in Your Budget?

We need to better understand how government is spending our money.

My desk at home is scattered with bills, receipts, and records needed for tax filings and family budgeting. It’s that time of the year once again, to crunch numbers and figure out what we’ll have for income, costs, and of course, unknowns—like the $800 I now have to shell out because potholes wrecked three wheel rims, a tire, and my car’s alignment.

Like many of you, I don’t have a clue where my taxes are going. Every time I hit a pothole, I wonder whether dollars could be shifted from a state, county, or city budget to alleviate these car-damaging menaces. Then I think of newspaper headlines about how we don’t have enough money for our teachers, police officers, and firefighters, or for health care for the poor. I hear about how very complicated the budgeting process is. I’m busy; it’s easier to keep thinking that I really can’t do anything about it.

One recent pothole jolted my senses, though. This one didn’t damage my car, but it caused me to recall my previous repair experience: If I had an invoice charging me the equivalent of 8 to 10 percent of my annual income (state and county taxes and fees), I’d sure as heck figure out exactly where the dollars are going. Wouldn’t you? And tax season is the obvious time to think about this issue.

Thus began my effort to obtain actual printed copies of the budgets, or at least summaries of them, for Minneapolis, St. Paul and the state of Minnesota. It turned out I requested the impossible from Minneapolis (it’s only available electronically). St. Paul promptly mailed a nice-looking one-inch-thick summary booklet. The state finally provided two binders about a foot thick called the “2010-2011 Forecast Base Budget.” (I had to go on line for updated numbers.)

Digging into the state budget first, I was curious whether we could reduce the $12.5 billion a year spent by Minnesota’s Human Services Department by outsourcing some of what it does. I wondered whether the state’s Department of Natural Resources should still be spending $493 million a year when perhaps some of its funding could temporarily go to shore up other areas of the budget.

In Minneapolis, I was puzzled about why the Public Works Department’s budget increased to $310 million for 2011, while allocations for pothole repairs are being reduced, and warnings remain about how our traditional transportation infrastructure is getting worse and worse. Questions abounded. And they were just scratching the surface: I knew I would need to dig much deeper if I were to even come close to understanding these numbers.

But then I noticed that the budgets were set up differently, and that they lacked important details. For example, the Minnesota Historical Society says 34 percent of its expenses, or $18.8 million, are for “other operating expenses.” But it doesn’t detail what these are. Meanwhile, nowhere in the state budget summaries are employee-related expenses broken out. They’re just lumped under “total compensation.”

In St. Paul, the term is “employee expense,” which covers some big differences. For instance, the 29 full-time employees in St. Paul’s Office of Human Resources average $207,000 a year in employee expenses—far more than other city employees, including 64 city attorney’s office employees (averaging $115,000 a year) and 472 firefighters (averaging $110,000 a year). Again, this is average “employee expense,” not average salaries. But it still raises the question: What’s in those expenses?

Is it naïve to think that we could do a better job of informing taxpayers about how their money is being spent, and then getting them involved in the budgeting process?

Not according to NAIOP, the Commercial Real Estate Development Association; the Minnesota Taxpayers Association (MTA); and the Minnesota Chamber of Commerce. These organizations are advocating a “truth in budgeting” approach to how state and municipal budgets are put together. This includes providing the public more information before and during a budgeting process, and having that process focus more on outcomes rather than inputs and procedures.

More importantly, they’re advocating that all government budgets—city, county, and state—follow the same set of line item descriptions, or object codes. Instead of allowing a budget to bunch everything under “other operating expenses,” for example, object code reporting would require separate line items for those costs. And most attractive to these groups, employment-related costs would be broken out and detailed by salaries, health care, benefits, pensions, and other post-retirement benefits.

Imagine, the ability to easily understand how your taxes are being spent and how those using them are being held accountable. Pipe dream? Maybe. But the efforts by NAIOP, MTA, and the chamber at least point us in the right direction.

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