This past weekend the amount - $24 billion- kept popping up in the news. At least 3 news stories wielded the number $24 billion in their headlines. Senator Amy Klobucher was touting the benefits of the recently passed senate version of the farm bill and the analysis that the bill would save $24 billion over the next 10 years. The S & P released an analysis that calculates that after the 16 day government shutdown that the economy will lose $24 billion in fourth quarter earnings. And last but not least Senator Jay Rockefeller stated in his newsletter that a 3 cent tax on soda could generate $24 billion over 4 years.
My conundrum: how did all these different proposals come up with the same dollar amount - $24 billion?
That started me thinking about government spending and budgets. I would really like to know where the guys in Washington who come up with the numbers went to school and what type of bookkeeping they studied. Personally, I think it is a modern adaption of ‘steal from Peter to pay Paul.’
There is another method of cost savings that I have come across in my lifetime that they may also be using like the ‘savings from sales’ version. Here’s how this one works. A person hears about a clothing sale. He/she hears about a clothing sale and goes out to buy an item of clothing that is on sale, but not necessarily needed. The purchase is made and voila! A savings of 40 percent is jotted down under the clothing allowance column. Great! A cut in the clothing budget column by 40 percent. The problem: what happens when the person tries to go out and use that 40 percent savings to pay the electric bill? Oops. The electric company wants real dollars, not a percent savings figure from a budget column.
The third method is one that when I came across it, I thought to myself….’is this guy for real?’ When my ex and I owned and operated a radio station in Iowa, our expenses were exceeding our income. (Sound anything like the government budget?) Cuts had to be made. We looked at the budget and decided what we needed to cut. We cut programs and costs of materials. Once we told the staff what we were going to be cutting and that we needed to cut our expenses the young man who was the music director came into my office, sat down and actually said, “Now that you’re saving all the money by cutting materials and programs I want a raise.” I could not believe I had to sit there for 15 minutes and explain to a grown man, that the cuts were made because we did not have the money and now that we could balance the bottom line, giving him a raise would completely negate the cutting of programs and materials.
Page 2 of 2 - I have watched the YME School Board as they wrestled with income vs expenses for years. At first it was as a teacher, later it has been as a reporter. Here’s how I have seen it work. The administration and staff look at last year’s expenses and income … called the budget… they project the income and expenses for the next year. If the expenses exceed the income, they look to make cuts to last year’s expenses and set the new budget in place. They reduce the amount of purchases made on last year’s books, paper, pencils, sports uniforms, and other materials. In effect, they balanced the budget. The school board does not ask the administration and staff to make up a wish list that exceeds the income and then decides which items to reduce from the wish list and call those reductions cuts. For years and years I watched the board struggle with making cuts; year after year. The decisions were being made based mostly on last year’s budget, not necessarily taking a hard look at what was needed. I watched as a new superintendent, Al Stoeckman, came to town. He had a different method of looking at the budget. He proposed that everyone work together to “right size the budget’, spend the dollars where they were needed the most. The changes in funding hurt. Programs were dropped, people were laid off. The budget was ‘The right size’ for the District’s needs.
Now that Al is thinking about leaving his position as superintendent I wonder if he would consider being a budget adviser to the powers that be in Washington?