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Accurate Cost Analysis Critical

February 18, 2012
The Intelligencer , The Intelligencer / Wheeling News-Register

As annual surpluses in West Virginia's budget dry up and the cost of government soars - as will occur soon - it will be imperative for state legislators to have accurate guidance on spending.

For that reason lawmakers who want to establish a new fiscal analysis office are absolutely correct. Though it would add slightly to the cost of state government, it probably would save money in the long run.

Legislators currently rely on state agencies to give them estimates of what programs, existing and proposed, will cost. That information is especially important when lawmakers are being asked to provide new services or expand existing ones.

Bills to implement such changes include "fiscal notes" on budget impacts, prepared by the executive branch of government.

As some legislators have pointed out, agency officials - often bureaucrats with their own agendas - can use fiscal notes to influence how lawmakers vote on such bills. If an agency's officials are eager to establish a new program, they may underestimate its cost. If they oppose proposals for change, they may inflate cost estimates.

That is a way of life in government. Anyone who doubts the damage it can do should look at the federal budget, where new programs almost always exceed cost estimates, sometimes dramatically.

It has been projected a new fiscal analysis office in the Legislature would cost about $720,000 a year. That would be money well spent, even if the cost swells to two or three times the estimate.

State officials in all three branches of government have done excellent jobs of controlling spending for many years. But they also have become accustomed to regular budget surpluses. Again, that is expected to end soon, making it more important than ever to guide spending on the basis of accurate information. Legislators should make the investment in a new fiscal analysis office.

 
 

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