Otherwise known as “the law of increased government spending,” Wagner’s law is founded on the idea that as personal incomes grow so will government budgets. It is considered the first model of public expenditure in the history of public finance.
With this newfound enlightenment, you’d think personal income in Cook County’s private sector has skyrocketed in the last few years, given the rate at which local officials have escalated spending.
This would be an egregiously misconstrued perception, given the number of retired residents on fixed incomes who in January of this year received a 2.8 percent bump in their benefit, marking the biggest cost-of-living adjustment beneficiaries have seen since 2012. The previous five years averaged a smidgen over 1 percent (1.1 percent to be exact), while – over the same five-year period –the county’s budget ballooned a smidgen over 74 percent (74.16 percent to be exact).
Wagner’s law, named after the feisty 19th century German economist and politician Adolph Wagner (1835–1917), suggests that a welfare state evolves from free market capitalism due to the population voting for ever-increasing social services as general income levels grow across broad spectrums of the economy.
The takeaway phrase in that statement being, “as general income levels grow across broad spectrums of the economy.”
During Minnesota’s recent state budget history –both the 2017 and 2019 sessions – legislators proposed establishing a “disparity impact analyses.”
Among other things, this concept would require each change item in the governor’s budget proposal – requesting new or increased funding – to include “a succinct analysis of whether the new or increased funding is likely to increase or decrease disparities.” The measure went on to define “disparities” as “differences in economic, employment, health, education, or public safety outcomes between the state population as a whole and subgroups of the population.”
Consider Cook County’s “subgroup population” and the potential for “disparity impact” … considering the percentage of our population that is 65 years or older.
While the overall U.S. population 65 years and older is at 16 percent, similar to the state of Minnesota’s 65 years and older population at 15.9 percent, Cook County’s percent of population that is 65 years or older is at 28.6 percent! (Figures from the U.S. Census Bureau July 2018 report).
Add to this disparity key findings from a report published by the Minnesota State Demographic Center in January 2017: 44 percent of rural Minnesotans are age 50 or above and more than 1 in 20 are presently 80 plus. Given the high percentage of those in the 65-79 age group, these rates and numbers are anticipated to continue to rise.
Getting back to the state’s budgeting process, the initial table-setting testimony by House Research staff focused on four public budgeting objectives: accuracy, transparency, efficiency and acceptability.
The “acceptability” objective is disturbingly non-existent in our local budgeting process, which alarmed citizens have addressed ad nauseam.
Michael Porter, director of the Harvard Institute for Strategy and Competitiveness, argues, “We should understand politics as an ‘industry’ in which most of the key players are private gain-seeking organizations instead of unique public institutions governed by impartial laws. Like any other industry, participants in the political industry compete to grow and accumulate resources and influence.”
It’s worth noting that various stakeholders in government routinely work to advance self-interest and not necessarily the public interest. (Please, assure me you’re not hearing this for the first time.)
At least, for former state Senator John Brandl and former U.S. Representative Vin Weber, this understanding was central in ideas they addressed in a report titled, “Agenda for Reform” which they delivered to then Governor Arne H. Carlson 25 years ago. The report offered major reforms for meeting government’s responsibilities without raising taxes.
General principles included:
A target should be set for spending and targets should be established for all major expenditure areas.
Eligibility for government benefits should be limited to the most needy.
Funds should go to citizens, not bureaucracies.
Expand choices for government officials.
Enable families and communities to provide some services.
Set budgets based on realistic projections of available resources.
Unfortunately, unlike any other industry, the political industry self regulates and what’s more controls the rules, turning budget and policy challenges into unproductive impasses and exclusionary, unaccountable decision-making that is too often unresponsive to the public interest – and certainly in Cook County – continues to absorb an upsurging percentage of taxpayers’ hard-earned dollars.
Former Cook County Commissioner Garry Gamble is writing this ongoing column about the various ways government works, as well as other topics. At times the column is editorial in nature.
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