Conservative News & Commentary

Mar 16, 2012 — by: A. Smith
Categories: Economics, Government

Homer SimpsonThe 1992 Presidential race between then President George H.W. Bush (41) and Governor Bill Clinton can be remembered by a simple slogan, "It's the economy stupid!" The notion was that President Bush was too stupid to understand the problem that the nation wanted solved was a slumping economy. President Bush didn't get the message and Governor Clinton went onto be President Clinton (42).

Back home in Klamath County we could use a similar expression: "It's the Costs Stupid." While almost every government agency characterizes their financial problems as a "funding shortfall" this characterization is only a partial truth. A much better description is that the county government is facing a deficit problem. That may sound like a distinction without a difference, but that's not true. There is a big difference. By characterizing Klamath County government's financial problem as a funding shortfall, the natural reaction is to try and replace that revenue. Yet that only looks at half of the ledger.

To understand the real problem — the complete problem — we need to begin describing government's financial problem as a deficit problem. Deficits are caused by one of three things:

  • Decreased revenues
  • Increased costs
  • A combination of both decreased revenues and increased costs

By properly characterizing the problem, then a good and proper solution can be put in place. Right now Klamath County leaders are only focused on revenues. They say they are cost-conscious and that they are spending every dollar wisely, but is that true? If it were true we should expect that in a recession costs would be decreasing, right? But it's not. Look at Public Safety's budget for 1990, 2000 and then 2010. You'll notice a trend, costs are significantly higher in each 10 year period. Do you think that might be a problem that the Public Safety Committee might want to address? Have they? WIll they? Right now their current thinking only leads to replacing lost revenue — that's what a tax levy is. There is some talk about becoming more efficient by merging the county and city police departments, but unless someone really takes the lead the political winds will topple that boat quickly. Watch the Public Safety meeting videos and you'll quickly see talk other than finding additional revenue is whisper quiet.

In the meantime all departments find their costs rising, year over year: steadily and certain. One could set their watch to it. However, until the cost side of the equation can be contained and controlled, Klamath County will always be in funding crisis, because eventually costs will catch and surpass revenues causing panic and a call for increasing taxes.

Before Klamath County get's one more nickel for Public Safety, Education, the City Airport, or whatever else is on the agenda, let's make sure they fully disclose their plans to control ever-rising costs. Otherwise we'll just be dogs chasing our tails.

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