One of them is Trey Childress, the chief operating officer for the state of Georgia and who prepares the state budget under Gov. Sonny Perdue for the Legislature to later approve.
Childress recently was guest speaker at the Marietta Rotary Club, and much of what he had to say was quite interesting, so I plan to quote him at length.
"I can tell you one thing: this is a good governance period, but it is certainly is not easy in this economic environment," he said. "And as I look ahead to the demographic patterns, and the rollout of national health care and the loss of federal stimulus dollars, it's going to get even tougher in the next few years.
"The good news is we're getting the job done with significantly fewer resources - doing more with less. The challenge is that we have more tough years ahead. And we have to be cautious, asking ourselves when are we actually doing less with less, when is it OK to do less and where do we need to fundamentally change what government does?"
Over the past two years of the recession, state tax revenues have fallen by almost 20 percent or about $3.5 billion, Childress said. What that means in terms of service delivery is this, he said:
- Georgia has reduced the number of people working for state government by about 7,500 employees, from 82,500 to just under 75,000. That's about a 9 percent reduction in staff. "We're back to the number of staff we employed about 11 years ago, but we now have 1.7 million more citizens to serve," Childress said.
- Over the same period of time, educators saw a reduction in staffing levels of about 4,000 from 130,000 to 126,000, about 3 percent. Most, although not all, were administrative staff reductions, not teachers.
- Because Perdue cut elsewhere first, agencies other than education agencies saw declines as much as 30 percent to 35 percent in their budgets.
"Now while this isn't ideal for service delivery improvements, we're performing well because of the operational changes we've made; squeezing savings out of contracts, improving efficiencies and therefore staffing levels, automating and delivering services that are otherwise costly online," he said.
"But this can only get you so far. Despite these reductions that the state the state has weathered, the next fiscal cycle (2012) and the years to come will prove to be as challenging.
1) Federal stimulus funds (that helped prevent even deeper reductions) will be exhausted at the end of the current fiscal year, leaving a budget gap of approximately $1 billion. Add other various growth demands such as more kids in our schools and convicts in our prisons, and the gap gets as high as $2.25 billion, Childress said.
2) Federal health care reform will cost the state for years to come.
"We are still sharpening our pencils on estimates as the feds get their heads around how they would like to implement," he said. "But the bottom line is they have pushed significant costs to states, and our early estimates lead us to believe it will cost Georgia about $2.5 billion over the next 10 years."
There's no question that those are sobering numbers. And so what do they mean?
"I think anyone involved in governing has to be aware that the margin is, at the very least, reduced. It may be all but gone," he said. "For those responsible for public finances, there is much more pressure on you to ensure that every dollar is spent well and that you are achieving a reasonable return on investment. For anyone who's been around Sonny Perdue, you've heard that formula for a long time. Every government is going to have to adopt an approach that demands real return on investment.
"The difficulty of governance going forward stems in large part from the fact that public finances are in these uncharted waters. Not since the Great Depression has a set of economic circumstances actually forced a new normal. And that's where we find ourselves - in need of a fundamental, new normal for government's role and its services."
Some might think the current economic troubles are but a passing storm.
"It will get better," Childress conceded. "But we're not going to bounce back. And I think that is becoming increasingly apparent."
Just look at personal finances in America, he says.
"At the height of the debt bubble, personal debt-to-income exceeded 130 percent. That number was in the 60 to 80 percent range not so long ago. And with all of the belt tightening and 'walking away from debt' we've seen personal debt-to-income still exceeds 120 percent. People are still stretched very thin and they'll be unable to increase borrowing or spending anytime soon."
What that means, in an economy that is more than two-thirds consumer spending, is that means there isn't some huge economic boom right around the corner.
"This reality demands a reduction in the size of government. It demands that we rethink the scope of our governments," Childress said. "We have to embrace the 'new normal' and rethink what we expect from government and for what we really want to pay. And I say this as a career government employee. We must perform fewer functions, spend less and achieve better returns on taxpayer dollars. There is no other workable solution." As he noted, we are in uncharted waters.
Bill Kinney is associate editor of the Cherokee Tribune.