Montana Viewpoint


December 29, 2000

It’s often said that government should be run like a business, and in Montana that’s happened to a certain extent. Problem is, it’s not the best business practices in the world that the state is emulating. There´s an accounting concept called “deferred maintenance” that some firms use to make their bottom lines look good. I think it’s been used in Montana, and I think we might be in trouble because of it.

Any car owner who has put off needed maintenance for too long already knows the basic principle of deferred maintenance: you break down on the highway, and what with the tow truck, parts, and labor, it winds up costing a lot more than if you’d just replaced the doohicky when you knew you should have. The way big businesses use deferred maintenance is to improve their bottom line so that their investors won’t dump the stock.

The example closest to home that I remember is that of the once-proud Milwaukee Road. Now, you won’t find more hardworking employees than the folks who worked for the Milwaukee here in Montana, and I am not in any way maligning them. They were loyal to, and proud of, their outfit. It’s just a shame they had to watch it fade away. When they were in a financial bind, the Milwaukee put off making needed track repairs against that happy day when the sun would shine again, profits would bloom, and they could finally afford to do what they had put off. Meanwhile, by not spending money on maintenance, they had hypothetically less red ink, and so the balance sheet looked better to investors.

Unhappily, the sun never shone again for the Milwaukee, track and roadbed were neglected, and it took forever to get a car from Milwaukee to Tacoma. This put off shippers, who found other means of transport for their product. There was, in fact, one stretch of roadway so bad, that trains were restricted to a maximum speed of 10 miles an hour. Not bad for a few miles, but this was 200 miles between, I think, Forsyth and Harlowton. The rest is history. The physical plant deteriorated to the point that it was totally beyond economic reason to rebuild it, business evaporated, and the Milwaukee closed shop. It was a sad day.

What makes me think along these gloomy lines is that I see Montana’s infrastructure exhibiting signs of age and infirmity, even though, for the past couple of years, the state’s bottom line has looked good, sometimes even rosy. Now, the state’s budget has to balance, that’s in our Constitution, so no red ink’s allowed below the bottom line.

However, have we balanced the budget by leaving undone those things we ought to have done? Every day we read in our local papers about our local schools facing budget woes; about our county governments wondering what’s going to have to be cut next; and about sheriffs’ departments who are so slim that they have only one officer on call weekends.

I would argue that these are not the moans and groans of a collection of spendthrift bureaucrats. These are our neighbors whom we have elected to do the job. Now, I know it’s easier for someone who has never done the job to do it better than the person doing it, but it is not a coincidence or a contrived situation that virtually every local government is in fiscal trouble.

Our infrastructure is not just our highways and bridges, it’s our schools, police departments, fire departments and much more. And our infrastructure is not just important to those of us who use it: it’s important to us because of the people who we want to use it; the new businesses moving to Montana that will demand an educated workforce and fire hydrants that work.

We can operate on the cheap for only so long. After that it gets real expensive real fast. So, what’s the point of all this? Well, I’m certainly not advocating raising taxes to chuck some bucks at the problem, but I would just want to caution us to think about the condition of our state before we go once more down the merry lane of more tax cuts for big business. Whatever tax cuts the legislature has already enacted have had a serious effect on the folks who rely on property taxes to run our "businesses": the cops, the fire laddies, and teachers; and that affects our safety and our future. New businesses won’t move to a state with a 10-mile-an-hour speed limit on the Information Highway speed.

Jim Elliott
Phone: 406-444-1556
Mail: State Senate Helena, MT 59620