The Blunt legacy

Also on this page is Gov. Matt Blunt's assessment of his accomplishments in this year's legislative session.

As one might expect, the governor paints a rosy picture. Others will find dim spots. From my own angle, he certainly can be commended for his handling of the state budget.

I'm thinking of the large picture. He has pushed revenue and spending policies that have produced comfortable surpluses. This is not true in many other states.

An interesting story in Wednesday's Columbia Daily Tribune described the tough choices many state officials face as spending outstrips revenue and they decide whether to dip into state reserves or cut spending or — oh, well forget it: Raising taxes is avoided like the plague.

In Ohio, Gov. Ted Strickland cut spending by $700 million to balance his state's budget. He avoided using his rainy-day reserve fund because it had been depleted the previous year but said if things got worse, he might dip in again.

In Tennessee, Gov. Phil Bredesen is holding firm against using reserves, proposing to cut spending by $468 million and eliminate as many as 2,000 state jobs.

Not all financial advisers are so protective of reserve funds. Liz McNichol of the Center on Budget and Policy Priorities urges states to use rainy-day funds when revenue fall short. "Having a rainy-day fund and not using it is the same as not having a rainy-day fund at all," she said.

Well, yes, but that does not exactly solve the riddle. McNichol poses a fascinating dilemma facing all public budget planners, but most, at least the prudent ones, are not quite so frivolous. When revenue fall and reserve funds are threatened, a natural tendency is to hang onto the fiscal safety blanket. Above all, it's dangerous to use rainy-day funds for ongoing operational expenses. It's wisest and easiest to avoid one-time expenses for a year or two, leaving reserve funds intact, raising the question: Why have the fund sitting there at all but providing no answer other than to keep the thing intact, just in case?

Best, of course, is the outcome Governor Blunt and his legislative supporters have fashioned: a nicely balanced budget that avoids such emergency compromises.

The big event in Blunt's budget-balancing act was his early reduction of Medicaid spending by purging eligibility roles. This was opposed by those who thought the cuts were unmerciful, but it is beyond argument the state budget was heading for a train wreck largely because Medicaid expenses were out of control.

Since then the governor and others have been debating how to restore eligibility for certain recipients by selective reinstatement of subsidies, leaving plenty of room for partisan disagreement about who, how and when. This year Blunt proposed a big increase in payments to health-care providers without much in the way of cost containment, and budget-wary legislators from his own party withheld support.

The governor's message lays out his case for accomplishment this year.

It's not a list everyone will support, but it's not nothing.

Henry J. Waters III is the publisher of the Columbia Daily Tribune.