The Leaky Paper Caper

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The Leaky Paper Caper

by Ari Armstrong, July 15, 2005

I was sleepily browsing through the Rocky Mountain News online on July 8 when I came across a link that shocked me to full attention. "State wastes lots of cash, ballot-measure foes say," a headline read. I've been working on a paper outlining some examples of wasteful spending within state government, so the headline immediately made me uneasy. Sure enough: the article discussed an early draft of the paper that had been released prematurely to the press. Just great, I thought. I was upset for awhile, but I've since decided it's not that big a deal. But no writer wants the general public to read (or read about) an early, unpolished and unfinished draft of anything.

I had imagined that stern e-mail warnings such as "THIS IS A DRAFT ONLY THAT IS NOT AUTHORIZED FOR DISTRIBUTION" would prevent unauthorized distribution. I was mistaken. I should have also added a second disclaimer to the pdf itself, which I have since done ("THIS IS A DRAFT ONLY. DO NOT DISTRIBUTE OR CITE.") Of course, sending anything into cyberspace comes with the risk of undesired distribution. However, in this case there was really no good way for me to get feedback and generate ideas without sending out the pdf to (what I expected was) a small group. I'll take the outcome as a lesson learned the hard way.

Jim Tankersley, who wrote the article, saw a draft that was much earlier than the one I was working from as of the publication of his article. If a draft had to be leaked, I wish it would have at least been the most recent one. But that's the way it goes.

The idea for the paper came about weeks ago when I bugged Jon Caldara -- president of the Independence Institute and now a leading opponent of Referendums C and D -- for such a document. He was in communication with Citizens Against Government Waste, and somehow (I'm not familiar with the details) the project was approved. So my understanding (and this is subject to change) is that the paper will eventually be published by the Independence Institute, and I will be paid a modest fee for my efforts. A number of other people have passed along their ideas and leads. The examples included in the early draft that Tankersley saw were never approved for publication. I suspect that most of them will end up in the final document in some form, while a few of them will be cut, but I don't make the final decisions. (Obviously, this article represents my own views only, and it is subject to my exclusive editorial control.)

Tankersley begins, "Waste is in the eye of the beholder. Opponents of two fall ballot measures that would boost state spending say government doesn't need more money because it wastes what it has now. They drafted a report this month detailing that alleged overspending. But much of what the report calls overspending -- including locking up drug users, prosecuting anti-trust cases and employing a lieutenant governor -- others call core government functions."

Tankersley's lead is curious. "They" did not draft a report; I did. My name was clearly printed at the top of the first page; I wonder why Tankersley didn't call me about it. Also, the paper suggests qualified changes to drug sentencing only for non-violent drug offenders. Why did Tankersley obscure the example in this section? Thankfully, the list of examples that accompanied the article referred to "nonviolent drug offenders." Finally, why did Tankersley choose to open with the most controversial examples, rather than the examples most universally considered wasteful? Tankersley simply omitted some of those examples.

Tankersley correctly notes, "The Independence Institute, a think tank based in Golden, identified the alleged government waste in a draft report it recently posted online by mistake."

He continues, "The 'Piglet Report,' at www.taxincrease.org [but since removed], warns voters against ballot measures Referendum C and Referendum D." However, "piglet" is only the informal name for the report. The title as currently listed on the paper is, "Wasteful Spending by Colorado Government'." But that's just my place-holder title that has not been approved. I don't know what the paper will be titled when it's released.

Tankersley writes, "For example, the 'Piglet Report' cites $500,000 spent by the University of Colorado on alcohol, about $13,000 of controversial professor Ward Churchill's salary, a $10,000 film grant and up to $15,000 for fireworks in Pueblo. Thursday, a leader of the Vote Yes on C&D campaign called the paper 'a joke.' 'If it does anything, it proves our point,' said Katy Atkinson, the group's spokeswoman..." But let's see if Atkinson calls the final, published version "a joke." Somehow I doubt that Colorado taxpayers think wasteful spending is a laughing matter.

Besides, even those who support the massive spending hike entailed by Referendum C should favor cutting wasteful spending, right?

Tankersley writes, "Two of the priciest overspending examples the institute cites are $3 billion in an unfunded liability for a state pension program -- money that the state is not, in fact, spending at the moment -- and up to $53 million for private prisons, which cost the state less per-inmate than public prisons... [Caldara] also said some items could drop off. He didn't give examples, but the institute has previously pushed government to save money by contracting with private companies for state services, which is the case with private prisons."

The example about pensions came from a June 18 story by the Rocky Mountain News. That article (by David Milstead) claims the total unfunded liability for the state's retirement system is $12.8 billion, $3 billion of which has been added since 2003. I don't know whether that example will make the final cut. But it's arguably relevant even though, as Tankersley writes, the state is not "in fact, spending" that money "at the moment." If the legislature has let the pension system get so far out of control, should we really trust the same legislature to spend even more of our tax money? Arguably, the legislature should focus on the projects already on its plate, rather than figure out how to spend more money on other projects.

Tankersley claims that "private prisons... cost the state less per-inmate than public prisons..." However, his claim has been disputed, and he doesn't bother to cite contrary opinion. But Tankersley's remarks are beside the point. Even if it's the case that "private" prisons cost less, and even if it's the case that, generally, "contracting with private companies for state services" is a good idea, and even if it's the case that contracting for prison services is a good idea, that doesn't change the fact that money was wasted concerning Colorado's "private" prisons. The state auditor's office recently described several problems with Colorado's private prison system, though of course Tankersley did not choose to cite that report.

Tankersley also writes, "The items in the report -- pension funds excluded -- don't total nearly enough to solve the state's budget problems." However, the early rough draft didn't contain many examples that will appear in the finished project. In addition, my resources are extremely limited, so it's unreasonable to suggest that I could find all or even most of the possible examples of wasteful spending, given the state budget is around $15 billion per year and includes (I'm estimating) hundreds of thousands of individual transactions. Finally, the Independence Institute also has issued the paper "Priority Colorado" that outlines some general ways to save money. So it's simply not appropriate to take the paper on wasteful spending out of context and treat it as if it were everything to be said about reforming the state budget.

Here's one example from the draft that Tankersley didn't mention. The draft cites a June 14 AP article about how "Colorado's Medicaid program spent $2,000 supplying Viagra and other impotence drugs to five registered sex offenders..." Here's what State Senator Dan Grossman told the AP: "The fact that our system is so loose and so ad-hoc that it would allow sex offenders to receive sexual enhancers at public expense is not that surprising, but it [is] outrageous nonetheless." If Grossman is right, that it's "not that surprising" that the state bought sex drugs for sex offenders, might it be a good idea for a newspaper with vast resources to check into Medicaid expenses generally?

But at least Tankersley noted the paper is a "work in progress" that was "posted online by mistake."

A June 9 editorial by the Rocky Mountain News didn't even clarify that fact. The editorial, "Bogus spin on Ref C," is itself bogus spin. The editorial begins, "Yes, there is waste in state government. And yes, the Independence Institute's 'Piglet Report' identifies several examples. But as an argument against two ballot measures that would increase state revenues, the report is almost laughable. And yet this is what the report purports to be. Independence Institute officials were not entirely happy with the document, either, since they ended up pulling it from their Web site."

For the editorial to omit the fact that the paper was an early draft, far from a completed work, is misleading. The final draft will look much different from the early draft, and it will contain new information.

The editorial also states, "If opponents of Referendums C and D want to be taken seriously, they need to stop pretending that Colorado government is awash in money, because it clearly is not." The claim that already-scheduled spending hikes are at least adequate to fund state government does not depend on the claim that the state is "awash" in money. What would it even mean for the state to be "awash in money?" Generally, the legislature will find a way to spend whatever tax dollars are available. But the existence of wasteful spending does not depend on the state being awash in money. Nor is a massive spending hike justified simply because the state is not awash in money.

So whoever wrote the editorial calls the rough draft "almost laughable" and says its claims "just doesn't pass the straight-face test." But it's unfair of the News to treat an early draft as though it were a final copy. The editorial is almost a cheap shot.

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