I am working with a student who is looking to create an objective prioritization list of GovGuam agencies. The budget is supposed to be allocated in logical order, from the most to the least essential, depending on the budget level. During tough times and budget is limited, there might not be enough to fund those agencies toward the bottom of the prioritization list.
This list should have been put in place before any financial crisis occurs. If such list had been available, the discussion of where to cut costs within GovGuam would have been handled a lot easier. As it currently stands, agencies are fighting each other for importance.
This process is no different from my course syllabi, which tell students, on the first day, how they will be graded and what the expectations are in my courses, regardless of who the students are, i.e., if you did not meet the minimum grade points, you will not pass the course even if you are or connected to the most influential person on this island.
These rules “tie my hands” as I have to apply them equally to all my students. The prioritization list should “tie the hands” of our government officials, regardless of who runs the GovGuam agency at the bottom of the list. During ideal times, we can try to keep all agencies operating but when push comes to shove, the essential agencies get priority in funding while those at the bottom of the list would face furlough.
As a second step, as agencies are prioritized, their budget must be scrutinized to make sure each of them is operating in the most cost-effective manner. Does an agency need all individuals on its staff? Are some of them dispensable? Regarding the staff and overtime pay, could duties be performed during regular hours or must they work overtime?
As common sense will tell you and as most people can see, there is opportunity here to “game.” If I can be approved for overtime hours and pay, why would I do my work during regular hours? This creates an undue incentive to be unproductive during regular hours. This also biases against hiring an additional staff member who, if hired, would take away my overtime hours and pay. This in turn creates a situation of being perpetually shorthanded. Again, overtime hours and pay must be clearly justified.
One principle in economics is opportunity cost: with limited budget resources, they must be used in the best way possible. When hiring staff, budget resources must bring it the most qualified/competent/productive individual. Adherence to this concept puts into question the practice of political hires. This is where politics and economics do not jive together. During a financial crisis, a review and possible elimination of political-hire positions present opportunities for reduced spending.
Even in my limited interaction with GovGuam, I have witnessed a waste of resources going to incompetent political hires. In one meeting with a GovGuam agency, the director — who was a political hire — was completely clueless as to what was being discussed. Observing this, I noted two things to myself: 1) What a waste of limited budgetary resources taken away from better use or hiring a better qualified person; and 2) It looks like it’ll be me doing the work, i.e., the director would be completely useless in accomplishing the task.
The worse part of this experience and the consequence of political hire is that this above-referenced director is now a senator and that directorship served as a stepping stone, unfortunately, all charged to GovGuam’s budget.
Based on this concept of opportunity cost, GovGuam should use its limited budgetary resources to bring in the best people to lead its agencies before creating commissions or task forces that rely on the volunteer efforts of the business and island community.
Even before the latest financial crisis occurred, GovGuam did not have resources to waste and was not in the best position to be generous with pay. It should have engaged in effective financial management then. The situation is worse now and calls for even better financial management.
Dr. Maria Claret Ruane is a professor of economics at the University of Guam. Send feedback to email@example.com