All Dollars Are Still Green

Mar 5, 2009

Recently, I took a bank CEO to task for asserting that you could actually identify which dollars in your bank account were used to pay which bills, thereby insulting the intelligence of many (see “All Dollars Are Green,” posted 2/15/09). But corporations aren’t the worst offenders here. That award goes to state and federal legislatures.

For example, in 1984 California state officials supported a statewide lottery on the grounds that the profits would go specifically to the state’s public schools. “Your schools win, too” was the ballot initiative’s slogan, and it passed.

So. . . did it work? OF COURSE NOT!!!

Why not? Because the state legislature, recognizing that the lottery was a guaranteed source of funding for the state’s schools, could reduce funding for the schools from the general fund. . . . Not too hard to see that coming, eh?

What happened next? Realizing the loophole they had created, in 1998 the voters passed another ballot proposition, essentially stating that each year’s budget for K-14 education, excluding funding from the lottery, must be as great or greater than the previous year.

So. . . did it work? OF COURSE NOT!!!

No, today, California is not exactly known for its lavish spending on public education, nor for the great results its school systems deliver. What went wrong? It’s hard to tell, but here are some things that point to a less-than-perfect result:
  1. A state ballot initiative process prone to hastily-drawn resolutions, which are publicized in voluminous, incomprehensible voter booklets and advertised at the bumper-sticker level of profound insight
  2. Legislators who understand the ins and outs of the budgeting and funding process far better than the drafters of the initiatives and the voters who decided on them
  3. The fact that, as in any complicated system, those who stand to gain or lose the most from the way the system works are the most adept at taking advantage of it.
  4. A budgeting and appropriations process that’s no more transparent in California than it is in other states or at the federal level.

It all started with a “simple” proposal to get more money to the California schools systems, and from there things got more and more complicated, and less and less successful. There’s a lesson in this somewhere.

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