The water crisis in Flint, Michigan, was engineered by a governor, Rick Snyder, whose campaign commercials in 2010 said in part, “Treat citizens like customers. Manage Michigan like a business.” It became his mantra. I wrote this column 19 years ago and thought it might be of interest today.
The day after Arizona Gov. Fife Symington resigned from office as a result of his felony conviction, a Nevada state agency chief told me, “That’s two Arizona governors who believe government should operate like a business who have been forced to resign in ten years.”
The linkage was interesting, and deliberate – this Nevada official believes those who preach running government like business do not understand how the dynamics of government differ from those of business. And he thinks that sooner or later those who try to implement such a philosophy will fail and government’s mission will suffer. The issue can be neatly illustrated by the experiences of three Nevada governors – Robert List, Richard Bryan, and Robert Miller.
In 1981 List successfully proposed the famed “tax shift” – moving Nevada from principal reliance on property taxes to sales taxes. The problem was that the shift was scarcely enacted by the Nevada Legislature when the 1981 recession was underway. Nevada, whose leaders had always regarded the state’s gambling economy as “recession proof,” quickly learned it was no such thing. Sales taxes are far more uncertain in hard times, so List had effectively sent the state into the teeth of a major recession in a far more vulnerable position.
Within months of the enactment of the tax shift, the governor found himself forced to cut public services once, twice, then a third time to keep the budget in balance as revenues plunged ever lower. By the time the third phase of cuts had come around, List had refined a sales pitch to make the cuts in services more acceptable to the public. “When businesses must tighten their belts,” he said, “government should do the same.”
It was an easily explained argument, and it fit List’s overall Republican philosophy of government. But his opponent in the next election, Democrat Richard Bryan, considered it nonsense. And after Bryan used the state budget crisis to portray List as incompetent and defeat him, the new governor spelled out exactly why he disagreed with the argument. In his first message to the legislature after being sworn in, Bryan outlined his philosophy:
“Another observation goes to the fundamentals of government. We have heard that in hard times, business tightens its belt. Government, we are told, should do the same. It is an appealing argument, and indeed when times are tough, government should cut expenses. Government cannot, however, avoid its responsibilities. When times are tough, business loses customers. When times are hard, government gains customers, and they are customers who cannot take their business elsewhere!” Hard times, Bryan said, drove up mental health problems, child abuse, alcohol treatment, prison populations, medical aid to the indigent. “When times are tough, government is more in the grip of uncontrollable expenses than is the private sector.”
Flash forward a decade. During the 1992 recession, Gov. Miller, a Democrat, found himself in a role very similar to that of List, of having to slash services to keep the state budget in balance. In two televised statewide addresses that year, he described how state agency budgets were being cut. And as Miller looked for ways to sell the pain of service cuts to the public, there was an interesting twist: Miller the Democrat seized on the rationale of List the Republican, rather than espousing the view of Bryan the fellow Democrat. When families and businesses must cut their budgets, Miller said, so should government.
Miller did not suffer politically from the effects of the recession as did List. Part of the reason may be that Miller had more time left in his term of office after the recession ended to recover politically from the hard choices he’d had to impose. Another reason may be that the public may be more receptive to budget slashing arguments when they come from a Democrat, in the same way that a tax increase from a Republican can be more palatable. As Mr. Spock put it, only Nixon could go to China.
Dennis Myers is an award-winning journalist who has reported on Nevada’s capital, government and politics for several decades. He has also served as Nevada’s chief deputy secretary of state.