“Doing nothing is sometimes one of the highest of the duties of man.” – G.K. Chesterton
Recently the Delaware Economic and Financial Advisory Council (DEFAC) “found” over $300 million in additional money through the magic of abandoned property, also known as escheat.
And then last week, Governor Markell, legislators, business & labor leaders proceeded to put on a nice dog-and-pony show to declare how they were going to spend all of it in the noble cause of “creating jobs.” Naturally, questions arise:
- Why spend millions for open space in an era of zero development pressure?
- Why waste millions in prevailing wage expenses, which add millions to the cost of road and sewer projects?
- Why dump millions into the Transportation Trust Fund, also known as the DelDOT operating fund, even though we don’t have closure on the waste at the Indian River Bridge and the developer deals in Sussex County?
- Why is no money directed at building homegrown micro- and small businesses in an era where our last corporate welfare recipient, AstraZeneca, is beginning to tear down buildings?
- Why offer a tax cut when we’re told we have a $1 billion infrastructure shortfall going forward? And tax cuts for banks? Really?
- Are we or are we not in a continued state of financial stress as a state government?
And even more importantly, none of these spending items spur major structural reform. We’ve always been told that we can’t do the major reforms because we don’t have the money. Want to take DelDOT out of the TTF? Can’t do it. Don’t have the money. Major overhaul of the pension program? Can’t afford it. Major Medicaid reform? Too costly. Consolidation of major school district spending? No budget for it.
So, by throwing around this ‘found’ money and checking off every possible constituent box (or future presidential platform plank), we’re kicking the can down the road on the reform that counts. Again.
So let me suggest something outlandish, even revolutionary. Why not just keep the money for the next time we really need it?
If we had $300 million in 2008, we wouldn’t have needed to take money from the federal government for Medicaid, for unemployment insurance or for education. But alas, we did not have the money, so we took the federal help, and the strings that came with it. Now, we have additional expenses in all three areas that we will have to live with for a long time. It didn’t need to happen then, and it doesn’t need to happen now.
We’re supposed to have a “Rainy Day Fund” that gets 2% of our state budget every year, but that’s just an accounting trick. There is no actual fund sitting in a bank somewhere as you or I would picture it. We could benefit greatly from an actual fund that could be on hand for the next crisis, because the next crisis is coming. If it doesn’t come from a double-dip recession, it’ll come from the erosion of our hegemony over corporate law, which puts over $1 billion annually into the state’s coffers.
And we’ve clearly learned nothing. If there was more evidence needed for that, this profligate spending of money that “fell into our lap” is that evidence. Let’s face it. None of these $4 and $5 million dollar spending items will do any great stirring in hiring or the overall economy, but $300 million would save the day in the future.
Sometimes doing nothing truly is the best course.