• Bottom line vs. well-being
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     | March 02,2013
     

    Vermont political leaders are showing renewed interest in measuring government performance. But as history has shown, the state’s bottom line isn’t the most important indicator.

    Twenty-five years ago, human services budget discussions focused on caseloads:

    Were they up or down? But it wasn’t clear if a higher caseload was good or bad. Was it a negative — a sign the economy was weak and more people needed help — or a positive — an indication the state was providing more help? In the early 1990s, then-Human Services Secretary Con Hogan had a radical idea: Instead of counting people served, the agency would measure Vermonters’ well-being. Were they getting healthier? Did they have enough to eat? How many kids were graduating from high school? Going to college? What was happening with domestic abuse? Child abuse? Elder abuse? What about teen pregnancy?

    It was an important and fundamental shift that recognized government’s role to improve Vermonters’ lives, and its responsibility to measure and be accountable for how well it did the job. Hogan received national recognition for his work.

    In the mid-2000s, in the name of efficiency and smaller government, a new administration stopped measuring Vermonters’ well-being. In fact, it got rid of the people who collected and analyzed the data needed for this kind of accountability. The agency went back to counting caseloads, and once again there’s confusion about what the numbers mean.

    In his 2010 Budget Address, when Vermonters were still in the grips of the worst recession in 70 years, Gov. Jim Douglas complained about the number of Vermonters receiving Medicaid: “Next year, the Medicaid system alone will serve 172,000 Vermonters. Since the beginning of the decade, overall spending for human services has more than doubled—a growth rate of three-and-a-half times inflation.”

    For Douglas, more Vermonters qualifying for Medicaid didn’t indicate their economic distress; it indicated state budget distress. So he looked for ways to reduce Medicaid benefits and payments to balance his budget.

    Similarly, the Shumlin administration is now alarmed by the number of Vermonters in Reach Up, the state’s welfare-to-work program. Some families have been on Reach Up for three years or more — again in the aftermath of the worst recession in 70 years — and the administration sees it as a sign the parents lack ambition or initiative, not that the state needs more case managers to help families overcome obstacles to employment. Claiming it will save money, the administration wants time limits for Reach Up.

    Gov. Peter Shumlin also has complained that the cost of Vermont’s earned income tax credit (EITC) — a tax break for workers in low-wage jobs that don’t pay enough to support a family — increased 49 percent between 2003 and 2011. More than half of the rise was due to more people qualifying for the EITC. The rest was due to an increase in the amount of the average credit, which rose at about the rate of inflation.

    More EITC claimants could be a negative indicator — a sign that the weak economy was moving Vermonters from good jobs to low-wage jobs that qualified them for the credit. Or it could be positive — people moving from the unemployment line into entry-level, low-wage jobs. But neither of those causes would indicate that the EITC was too generous, as the governor has suggested. And neither would justify the governor’s proposal to cut the EITC to pay for his laudable initiative to increase child care subsidies.

    Both the administration and the Legislature want new government performance indicators so taxpayers and policy makers can see whether public funds are being spent effectively and are improving Vermonters’ well-being. It’s a good idea — but only if we understand what the indicators mean. That more Vermonters are in need of help these days is not a sign that the state is doing too much for them.



    Jack Hoffman is a policy analyst for Public Assets Institute in Montpelier.

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