Washington Legislature thinking: Hobble the program that led to added tax revenues of $321 million - $264 M for the state and $57 M for local jurisdictions.
The Legislature and Governor are happy beyond belief that an extra cash infusion came in - just in time to ease the budget deficit they caused. But they want to kill the program that generated the idea that caused the windfall: State Auditor's ability to conduct performance audits. Performance audits look beyond if the dollars are spent for their intended purpose - the scope of regular audits - to ask "is the State getting value out of this program?" Which leads to the question are the results a good value for the money spent on the program.
The powers like getting big smiles for passing out your tax dollars for good programs, but they don't like the results being measured and questions being asked.
The business tax amnesty was passed by the Legislature during the special session last December, but State Auditor Brian Sontag's performance audit program generated the idea for it. Washington State Wire
Just as lawmakers are cheering an unexpected $321 million that will bail out the state budget, they're thinking about whacking the program that made it all possible.
It is the inside story of the "May Miracle" announced by Gov. Christine Gregoire on Tuesday. The money came from a tax-amnesty program run by the state Department of Revenue - a wildly successful effort that generated more money than anyone dreamed.
The cash comes just in time to save the Legislature's bacon...
... That the performance audit program is responsible there is no doubt. Sonntag's office outlined the idea in a "performance review" of state government in December 2009. It noted that 46 other states had run tax-amnesty programs since the early 1980s, forgiving penalties and interest if people would just pay up. In the previous two years, 16 states had raised a total $1.4 billion.
But Washington had never done it.
The auditor's office gathered information from the Department of Revenue to make the case. "I think they deserve credit," said Revenue spokesman Mike Gowrylow. "They contacted us when they did the original audit."
So now...
But the Senate budget proposal transfers money from the account and gives it to other agencies - $3.2 million to the Department of Revenue for additional auditors, $5.3 million to the Department of Social and Health Services for welfare-fraud investigations.
It may not sound like it makes a difference, but it is one of those subtle distinctions that mean plenty in Olympia. After an account has been raided once, it sets a precedent, and it can happen again and again, until finally there isn't much left.
Oh... The Legislature never let the ability to do performance audits pass their gate and live. It was Initiative 900, passed by voters in 2005, that enabled them. Those voters again. And Tim Eyman!
Arguably, when government faces a huge deficit, it's more important to stop people from stealing public funds than to begin a new program that might eventually increase governmental effectiveness or lead to a political process of changing/eliminating programs. Or maybe we should do both. It's hard to prioritize stuff like this. But you might start by recognizing both sides of the issue.
Posted by: Bruce on May 9, 2011 09:32 PMSo while both types of audits sound good, if government is forced to save money immediately, it makes sense to increase fraud audits and decrease all sorts of optional programs, even good ones, such as performance audits.
Posted by: Bruce on May 10, 2011 08:36 AMRon Hebron's original post said the performance audit funds were transferred to the Dept of Revenue, presumably for tax audits which typically (at least at the federal level) return a large ROI, and to DSHS for welfare-fraud investigations (I have no idea what the ROI is on this, but I hope the legislature does; in any event it's ironic that conservatives would oppose this when historically they decry welfare fraud at every opportunity).
When faced with a choice between one program with short-term favorable ROI and another with long-term probably favorable ROI, I'd like to do both. But faced with a short-term financial crisis, the state must prioritize the short-term, just as a private corporation would in that situation.
Posted by: Bruce on May 10, 2011 10:45 AMPerformance audits can save money immediately as well, since you can identify programs that need to be re-evaluated when doing budgets - low-performing programs should be the first to be eliminated.
demo kid,
If the money saved by the State Auditor is greater than the budget, then it's a net benefit to the budget - it's money well spent. Why cut a program that returns more dollars than you put in?
Posted by: Shanghai Dan on May 10, 2011 04:36 PMBy analogy, if I say "I think performance audits are good" or "I think Obama is good", I don't expect that to influence you unless I have some impressive and relevant credentials. But neither I nor other serious commenters make many comments like that online. Why bother? To see my name on the monitor? It wouldn't persuade anyone.
Not that I have any delusions about persuading anyone anyway. But I read SoundPolitics to understand all sides of an issue, and I assume some people on the right do so, too. And sometimes it helps me to see how people rebut my arguments.
Posted by: Bruce on May 10, 2011 04:44 PMWhy stop, then? Let's allocate the entire state budget to the Auditor, and then we'll get back even more!
The SAO has specifically stated that they can do the job with the cut. Nothing has been stated about why the other departments SHOULDN'T receive funding, and the purpose of the funding is comparable. This is nothing but armchair quarterback whinging with little to no proof.
Posted by: demo kid on May 10, 2011 08:35 PMWhy stop, then? Let's allocate the entire state budget to the Auditor, and then we'll get back even more!
Are you really that ignorant, or that pressed to make any point?
The SAO has specifically stated that they can do the job with the cut.
Source?
Nothing has been stated about why the other departments SHOULDN'T receive funding, and the purpose of the funding is comparable.
Start with their own oversight programs - why didn't they catch the fraud and waste first? Perhaps it's not best to let the fox guard the hen-house? That's why you have OUTSIDE auditors, so they are free from any repercussions of those being audited.
This is nothing but armchair quarterback whinging with little to no proof.
I'd say $321 million is quite a bit of proof...
No, but you do appear to be that stupid. You've provided no proof that additional funding for the SAO would result in comparable savings.
Are you really that ignorant, or that pressed to make any point?
Try the article that good ol' Ron actually quoted in his post:
Like every other agency in state government, the auditor’s office faces cuts. The performance audit account established by 1-900 will raise about $28 million in the next two years. The House budget proposal requires the account to pick up about $10 million of the auditor's routine financial-auditing functions. Sonntag’s office says it can live with that in a year like this one.
But hey, why should I expect you to read?
I'd say $321 million is quite a bit of proof...
It's proof of nothing. You haven't connected the funding to the ability of the SAO to do the job. Show me that a reduction would severely impact the SAO, or a significant increase would result in comparable savings.
Similarly, show me that reallocating the money to other departments *isn't* needed. What is the state of the staffing of auditors and fraud investigators in the two departments mentioned?
If you're going to criticize this action, you're going to need more than just pointing to a single action (that is done by all but two other states!) and suggest that this ALONE means that the SAO deserves more funding.
Posted by: demo kid on May 11, 2011 09:33 AMNonsense. US postal rates have generally stayed constant over the years when adjusted for inflation, are lower than private delivery services (admittedly for somewhat different services), and are lower than rates in most developed countries.
Posted by: Bruce on May 12, 2011 08:11 AMNo, but you do appear to be that stupid. You've provided no proof that additional funding for the SAO would result in comparable savings.
So you can't provide anything contrary, and refuse to go on past performance as an indicator of future returns. I guess absurd conclusions are expected from you...
It's proof of nothing.
Yes, we know that, to Democrats, $321 million of tax revenue is irrelevant and proves nothing. But to real people it's real money.
Show me that a reduction would severely impact the SAO, or a significant increase would result in comparable savings.
You made the claim that "The SAO has specifically stated that they can do the job with the cut. "
Are you now stating that you just Made That Up? Or did you say it mistakenly? Can you show us where the SAO stated that?
Posted by: Shanghai Dan on May 12, 2011 04:37 PM