Constitutional Dedication vs. Competition

A transportation finance hearing offers a lesson on how government is supposed to work.  From the March/April 2018 edition of Fiscal Focus

“Competition” is often regarded as a rather uncomfortable word when used in the context of government.  If its mention doesn’t immediately conjure up the idea of privatization and all the political tension and objections that accompanies it, the word at least feels out of place with the abstract nouns usually associated with government such as equity, fairness, and justice.

But competition is the de facto foundation of the state general fund, where limited tax dollars must be allocated on the basis of merit and need.  99.5% of the time, general fund competition is largely hidden from view.  Instead, as the “veto everything” movement demonstrated last session, diverse spending interests can normally be counted on to bond together to oppose tax relief and retain more tax dollars to support various causes.

Every once in a while, however, the glue holding spending interests together cracks.  Such was the case in a recent Senate Transportation and Finance Policy Committee hearing on SF 3837, which proposes a constitutional amendment to allocate sales tax revenues from motor vehicle repair and replacement parts exclusively to fund roads.  (Lawmakers actually have already dedicated the sales tax revenues from motor vehicle replacement parts to road and bridge construction in statute.  SF 3837 would take that one step further by hanging a constitutional “do not disturb” sign next to the revenue streams.)

As with any bill in which a few hundred million of general fund revenue hangs in the balance, the committee hearing did not lack for testifiers.  Business, public sector union, and local government representatives with a direct stake in transportation infrastructure spending expressed enthusiastic support for the bill.  But other business, public union, and local government representatives strongly opposed it arguing school funding, senior care, environmental protection, local government aid – among many other things – are no less important.  None of this was particularly surprising but it was strange (and admittedly a little entertaining) to see some public unions on the opposite side of other public unions, and some local government representatives opposing other local government representatives.

Indeed, comments from a couple committee members seemed to indicate that the fractures among historical allies were more disturbing to them than the substance of the bill itself.

There are many reasons why dedicated funding is problematic public policy and dedication through the constitution even more so.  The under recognized, unappreciated, but perhaps most important one is this: competition for limited resources is the only thing that can be reliably counted on in government to drive the pursuit of greater efficiency, productivity, and innovation in the delivery of public goods and services.

It’s especially true in the context of the increasingly challenging budget dynamics the next few decades seem certain to deliver.  It’s also why the 1995 Brandl/Weber Agenda for Reform argued, “In the future competition must be viewed not as a problem but as one of our most powerful tools.”  “Competition” may not sound much like equity, fairness, or justice.  But it will be much more difficult to deliver on those ideals if we let the innovation that competition breeds slip through our fingers.