Zero-Based Budgeting and the "Giant Sucking Sound"

When Ross Perot ran for President in 1992, he made famous the phrase "a giant sucking sound," referring to a place to the South where American jobs would go if, in that case, we passed NAFTA. History proved him correct, sadly.

In my conversations with residents, business owners, community leaders, elected officials, and taxpayers of the 14th District of Cook County, it's clear that the term could also apply locally. But the giant sucking sound I refer to now is in regards to the tax dollars being sucked out of the pockets of the residents of the far north and northwest suburbs, heading downtown, to be used elsewhere in Cook County.

To many residents of the 14th District I talk to, it does appear that their money is literally disappearing into a giant black hole.

Another relevant term in this discussion is a business phrase, "ROI" -- Return On Investment.

The purpose of Cook County government is not as a jobs machine for the politically connected. Its purpose, the purpose of any government, is to provide services to its residents. The services Cook County is supposed to provide center around these areas, as I often explain to audiences I speak to: Public Safety, Public Health, Public Lands, Public Records, and Public Works.

Residents in each of the 17 districts of Cook County should expect to see a reasonable return on their investment (ROI) in terms of services.

Let's do a little math to see how we are doing:

The Cook County budget for 2008, the last year for which there are final numbers, was $3.2 billion. Since there are 17 districts of nearly equal population in Cook County, I will make the assumption that the 14th District paid at least 1/17th of total monies collected. Of course, we know that not all monies collected by Cook County are in taxes. Some income is in fees, some in grants, etc. We are working to break down these numbers, and given the general lack of transparency in Cook County finances, this is not easy. But let's do this exercise as an illustration nonetheless.

And remember, the 14th actually probably paid in MUCH MORE than 1/17th, but the precise numbers by district are not available.

I divide $3,200,000,000 by 17 and get $188.2 million.

Since property values are higher in the 14th as well as disposable incomes to buy taxable goods (Barrington, for example, has the highest concentration of millionaires in the U.S.), the $190 million we likely paid in taxes is definitely an estimate on the low side.

While the current Commissioner Goslin voted correctly to oppose the Stroger sales tax, he has voted yes on Stroger initiatives and budgets all along -- budgets that have continued the fiscal mess we are now in. He has not led the implementation of the downsized and streamlined Cook County that former Commissioner Mike Quigley proposed in 2006. Goslin literally has failed in his fiduciary responsibilities as the 14th commissioner to be a steward of the 14th District's fiscal contributions.

For example, on his website page, Goslin states that, “Part of my job as your representative is to ensure that taxpayer resources are returned to the district. In 2008, $23,085,016 was returned to Commissioner Goslin's 14th District via improvements, services, grants and capital projects.”

Factually, however, the 14th paid in at least (probably much more) $190,000,000 in county taxes during 2008, for an approximate return of less than 20 cents in services for every $1.00 paid in taxes.

Giant sucking sound.

These numbers are all very general estimates. Obviously the frustration is how little information and specifics are transparently available to even those among us who REALLY want to find it out. Part of the problem is that Cook County's records are not accessible enough to know exactly. But you get the general idea.

Like most everyone, I understand the necessity for taxes, if they are frugally and well spent on vital services that benefit the community in which we live. Some taxes are necessary to give us all the basic public infrastructure we share.

But we all know that frugal spending on only vital services is not the way it is in Cook County currently.

Other examples of the "sucking sound" documented on the incumbent's website include the fact that the 14th District paid in almost $44 million in taxes for the health and hospital system while receiving only $2.6 million back in services.

And given the importance of the extensive Forest Preserves in the 14th, and the fact that we have a huge amount of acreage (the second-most land in Forest Preserves in the County), the incumbent, who has not been able to step up in his 12 years on the board and lead to fix this situation, has returned less than 59 cents in services for every dollar paid in taxes for the care of our public spaces of conservation.

What's the solution? Zero-Based Budgeting, something I have advocated strongly for since the day I announced my run for this seat.

Zero-Based Budgeting assumes nothing from year to year and requires every program and expenditure to be absolutely and continuously justified as a vital expense that fits within a careful strategic plan.

Zero-Based Budgeting takes an arm’s-length approach to determining what is needed and where it is needed, and it effectively and efficiently allocates resources to maximize the public good.

This is not a matter of political party, or "left versus right."

For example, it is in yours and my vested self-interest to control crime at the lowest cost possible, while keeping it out of our communities by having a criminal justice system that works well.

Public Safety and the criminal justice system take up almost half of what Cook County spends of your taxes. It is the largest single category of expense, and it is my personal area of expertise. I already consult with the federal government and the U.S. Congress on how to do it all better. I will bring that expertise to Cook County.

Solutions to our common problems and needs should also be the most cost-efficient. Here is my plan for how we will implement zero-based budgeting in Cook County:

First, we set well-defined and measurable objectives for each of the key areas that are included in a Cook County Mission statement that we would create with substantial public input.

This process will, no doubt, be very political, so we must be ready for the fights over what should and should not be included in the mission statement.

These objectives are to be achieved without regard to whom, what, when, or where. An example might be: provide a defined set of basic, critical, and well-care health services to uninsured families living at or below 150% of the poverty line as defined by the US Department of the Census.

Objectives are also political in nature because we are setting a measurable standard by which one can readily and publicly determine the degree of success that has been accomplished in meeting or failing to meet the stated objective. (The key here is that objectives must absolutely, positively be measureable.)

We then develop a set of focused strategies that outline how we will meet our objectives -- for example, provision of emergency, critical care, and well-care services based on analysis of socio-economic population densities. This results in a defined set of needs based on where and what.

We then determine tactics that are specific for the stated strategies and that will be employed to meet our objectives. For example: for high density/low income areas, provide a mix of centralized critical care centers and neighborhood basic care/well care clinics.

We can now define the processes (step-by-step actions) that we will actually take to implement our tactics.

For example, these are processes for bringing better health care to the suburbs:

1. Define the services to be provided by critical care centers versus well-care clinics.
2. Perform an economic analysis.
3. Determine the number and locations of necessary critical care and well-care clinics.
4. Determine the services to be provided by a centralized critical care center and cost services -- in-source/out-source.
5. Determine the services to be provided by decentralized well-care clinics and cost services -- in-source/out-source.
6. Perform an operations analysis to optimize the provision of services centralized versus decentralized.
7. Build rank order listing (watch out for the politics here) of which services will be offered and at what cost levels.
8. Based on an analysis of historical health service data, determine the number of services to be performed at centralized care center on annual basis and cost.
9. Ditto for decentralized clinics.
10. Multiply the cost of services versus ranking times historical usage, and you have a Zero-Based Budget.
11. Compare the Zero-Based Budget to available resources, and based on the rank ordering of services, reduce services provided until the budget parameters are equalized.

In this case, some tax monies will still leave our pockets, but only in trade for actual provision of vital services and provision of decentralized care clinics in the burbs based on socio-economic need.

Conversely, given the physical location of Forest Preserve land (different objectives, strategies, and tactics from health care), the dollars should start flowing back to the burbs from the city. Net, by clearly defining measurable objectives based on the particular budget component, we can define and cost out the processes -- step-by-step activities -- necessary for implementation.

I believe in zero-based budgeting based on establishment of measurable objectives, clearly defined and communicated strategies and tactics designed to met these objectives, and identification and implementation of efficient and cost-effective processes.

While we will never get a buck back for each one we ship downtown, we can at the very least ensure that there is a consistent and systematic approach for determining what we will do (objectives), planning how to do it (strategies and tactics), and implementation (process). This wrings the politics out of the budgeting process and ensures transparency and accountability.