Three Envelopes and the Challenge of Long-Term Planning

Obvious but rarely used strategies to good governance and future decision-making.
March 3, 2010 AT 3:00 AM
Feather O'Connor Houstoun
By Feather O'Connor Houstoun  |  Contributor
A senior adviser to the Wyncote Foundation

With a growing list of states teetering on the edge of fiscal calamity, good governance and long-term thinking are frequent casualties. Elected officials and department heads are walking into crises not of their making, and generally find the public blaming them in short order. It makes me wonder: Who would want these jobs? Could a willing candidate possibly understand how challenging both the reality and politics of the public sector can be?

The time-frame in which this occurs today reminds me of that old joke about the three envelopes left by the outgoing official for the new guy. They are numbered, to be opened in sequence as crises arise. The first piece of advice: Blame your predecessor. The second: Blame the media. The third: Take out three envelopes.

In the past, for those of us who have spent substantial time in public life, the benefits of those first two envelopes usually lasted long enough to get at least a few significant things done. But today, it's not uncommon for public officials to reach the third envelope before the administration's first year is out.

This places increasing pressure on officials not only to make it through the first twelve months of inevitable budget meltdown and legislative confrontation, but also to build a framework for future decision-making. This task may fall first to the chief executive, but it must be emulated consistently by departmental leaders, down through departments and outward to external constituencies.

A failure to provide a multiyear context for these perennial conflicts can weaken an administration irreparably; with each budget battle repeating the same patterns, leaving department heads locked in a downward spiral of bickering, myopia and old-fashioned backside covering. After seeing too many of these situations play out, I asked a veteran of many state budget battles what strategies he believed could set in motion a more constructive conflict. He offered some observations which seemed pretty obvious to me, until on reflection I realized how rarely they are practiced.

  • Even if you want to blame your predecessor, accept responsibility for taking action and don't sound like a cry-baby.
  • Set an absolute standard of looking at every budget strategically and being transparent about the multiyear implications of cuts and additions to programs. Establishing where things are going and what can be afforded in the long run must come before short-term tactical decisions like using one-time revenues to close budget gaps.
  • Explain the size and magnitude of the problem in terms people can understand. Talking about "structural deficits" is a good way to get all but the wonkiest to tune out at the precise moment they need to pay attention. Repeat, regularly and consistently, messages households will understand so they are not forgotten but remain central to the conversation.
  • Give clear, factually accurate examples of the kind of cuts you are making and why the underlying policies have to change. The more voters see and understand the outlier policies and programs that are driving budgets out of whack, the less likely they can be mobilized into polarized positions.
  • Compare program expenditures, levels of taxation and levels of service to set realistic expectations and prepare external and internal constituencies for change.
  • Without attacking recipients or providers of services, make a clear case that many government programs are not held to metric standards of effectiveness, and thus limiting spending is the responsible thing to do.
  • Avoid ideological justifications for budget proposals and stick to factual considerations.
  • Cast a critical eye on transfer payments to local governments and school districts that may seem beyond the control of state government. In many states a strong case can be made that local spending patterns are out of line, or that smarter administration could produce better services at less public expense.

These strategies add up to three core elements. First, confront the reality of the situation and plan for responsible budgeting. Second, communicate clearly, often and widely the budget reality and the resultant strategy for meeting it. Third, steer clear of broadside attacks and instead use documented, factual examples of inequities, inefficiencies and unusual spending practices to engage and persuade the public that leaders must address them.