Budget & Tax

Better Service at a Better Price: Knowledge Is Power

July 22, 2016

Steve Anderson

By Steve Anderson

As policymakers prepare for the 2017 legislative session, it is likely that they will be looking for areas where cost savings can be found. I would suggest starting with the two largest items in the state budget.

Education

OCPA has created a valuable resource for both policymakers and their constituents—an education finance data tool. I encourage you to visit ocpathink.org/education-data.

Take a look, for example, at the unencumbered funds or “cash forward” on the Revenues tab of the data tool. These are funds unspent at year end by school districts. Last year they totaled an eye-popping $1.89 billion. Some of these funds could be spent in the current year, creating less demand for appropriations. Some of them, such as the Federal Child Nutrition Funds, could be retargeted to create more revenue for local high-value crop producers and processors—ultimately sending more tax dollars to the state treasury. I’ve written several articles in Perspective over the last several months on how those funds can not only benefit Oklahoma farmers but also improve the quality of meals for Oklahoma school children—all while decreasing costs to the local school.

In addition, take a look at your local school district’s expenditures with an eye toward the necessity of the expenditure and the amount of the expenditure. Attend school board meetings and bring your laptop. Show school board members how much you as a citizen know about their operations. Informed questions about these expenditures may have far more impact than you think is possible.

Medicaid

Another area which has a high growth rate and which consumes a large percentage of the state budget is Medicaid. It is important not only to control Medicaid expenditures but also to ensure that those being served are actually having their health improved.

When I was state budget director in Kansas, we put in place a software program that searched the many databases that are already held by the state to ensure that each applicant was in fact eligible for assistance. Then we followed up to make sure that person continued to meet eligibility requirements. It should not be underestimated how much money can be saved by cracking down on those who should not be receiving benefits. This, of course, frees up money so that the state can provide the funding for those who actually qualify and need the assistance.

Another thing Kansas did is withhold three percent of provider payments until year’s end, at which time those providers must show the state that the individuals under their care are actually being served and progress is being made on their treatment. Never underestimate the impact of incentives and disincentives to facilitate better services for the needy.

Whether in education or in health care, knowledge is power and it drives accountability. This translates to better service at a better price—which benefits both the taxpayers and the recipients of government services.

Steve Anderson (MBA, University of Central Oklahoma) is an OCPA research fellow. A Certified Public Accountant with more than 30 years of experience in private practice, he is currently a partner at Anderson, Reichert & Anderson LLC. Anderson spent two years as a budget analyst in the Oklahoma Office of State Finance, and most recently served as budget director for the State of Kansas. At one time he held 17 state teaching certifications, ranging from mathematics to physics to business.