ISSUES AND ANSWERS ON STATE SPENDING: Delaware should pursue values in outcomes

Sen. F. Gary Simpson, a Republican, is Senate Minority Leader in the Delaware General Assembly, representing the 18th District.

How much should the state be spending?

Delaware is the fourth-most expensive state government in the nation, as measured on a per-person basis. It’s difficult to say exactly how much we should be spending, but it’s hard for anyone to argue that we’re not spending enough if we’re fourth in the nation. Perhaps more than the appropriate level of state spending, we should be focused on reining in the unsustainable, long-term growth in state spending.

What can realistically be done to cut spending?

F. Gary Simpson

There are countless instances where we could save money, but the most important question is this; are we getting value for the money we spend? And it’s clear that the answer is “no”. We’re third in the nation in health care spending, but 31st in outcomes. We are a top spender in education, and I think the results speak for themselves. And it is unfortunately that way across much of state government. What we need is a change in our culture. We do not have a state government that pursues value. In fact, so much of what we do isn’t even measured to determine whether we get good value or not.

How can we lower Medicaid costs?

As part of our budget negotiations earlier this year, we pushed through a process in which cabinet Secretary Walker and DHSS would study the implementation of a health care spending benchmark that limits our growth in spending on health care, specifically including Medicaid. I won’t get into specifics in advance of her final report, but I will say that other states have achieved savings with Medicaid waivers and incentivizing people to reduce their visits to the emergency room instead of a local physician’s office or an urgent care center. I have great hopes that Sec. Walker’s findings will prove beneficial.

Should Delaware create a “budget-smoothing” fund?

Absolutely! The process created by HJR 8 — another idea we pushed through during our intense budget negotiations this past June is currently ongoing. However the early returns are clear; the single best thing we could do for our state budget is to create a smoothing fund combined with a new fiscal control that is tied to real-world benchmarks like economic growth, personal incomes and increases in population.

The principles are clear; put money into the fund in good years, and take it out — if necessary — in lean years Right now, as I’ve said countless times in the past, if you give government more money, they will spend all of it every time. Such thinking has created spending growth that is unsustainable. Had we created a smoothing fund and a real-world fiscal control back in the 90s, we would be in outstanding fiscal shape today.

Should the state make efforts to increase revenue? If so, how?

We made some tough choices this year, raising taxes by $200 million. That represents 5 percent of the state budget. I can’t imagine anyone arguing for raising taxes again. And without the budget smoothing fund and a real-world fiscal control to govern our long-term spending, I can’t see tax increases entering the equation.

Are Delawareans getting the best value out of their tax dollars?

No, as I mentioned earlier, the statistics are clear. We do not get good value for our tax dollars. Unfortunately, we do not have a government culture that values or in too many cases, even measures outcomes to determine efficiency.

What would you do differently if you ran the state?

This is a question with a long list of answers, but a few principles come to mind. First, we need to create a culture that aggressively seeks to get good value for the money we spend.

Second, we need to recognize what the government can do and what it can’t do. The government can’t be all things to all people. Where we can help, we need to do so aggressively and effectively. But in situations where the private sector or nonprofit sector can do a better job, we need to get out of the way. We have a state filled with talented, creative people who can solve a lot of problems if government would just stay out of the way.

Third, we need to be reform-minded and recognize that monumental changes are coming to the economy, to education and to health care. Instead of remaining fiercely wedded to the “way we have always done things” and the status quo, we need to be on the leading edge of these changes.

For another view from Sen. Harris B. McDowell III, visit here.

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