Public Policy and our Pocketbooks
Jim Nielson, AIA, is a Senior Principal with CRSA and a Utah State Representative. First, Do No Harm is a series of posts about how what happens on Utah’s Capitol Hill affects public, business, and personal budgets. This segment sets the stage, and will be followed by a look at specific laws passed in the 2014 session.
Years before I decided on architecture school, my first thought was an MBA. As I was deciding, I worked initially as a management analyst for a large defense contractor. Shortly thereafter, I served for several years as a policy analyst at the U.S. Department of Education in Washington.
In those early jobs and ever since, budgets and financial management have always been key. I never had an accounting class, only on-the-job training. I chose architecture because I needed an outlet for creativity; I figured a creative approach to business and financial management might be hazardous to my employer’s reputation, not to mention my own.
My career has come full circle, though. In my roles over the years as architect, project manager, chief financial officer, and managing principal on many different projects, I’ve always had an eye on the numbers. (And of course I’m careful to confine my creative endeavors to design, not to finances.)
Serving in the Utah House of Representatives has brought more on-the-job training. Being assigned to the House Revenue and Taxation committee was a particular learning opportunity. The curriculum: public finance, which of course affects business and personal finances as well.
One thing I’ve learned, not just in architecture, but also through staff service in Washington, D.C. and my time as an elected official, is the law of unintended consequences. In the public and the private sector, it can be almost impossible to predict the effects of decisions. During my time in office, one of my business partners has told me repeatedly, “First, do no harm.” Medical doctors are bound to that edict as a professional standard of care. I’m not sure whether it’s harder for a doctor, for an architect, or for a lawmaker to ensure that his or her actions do no harm.
Public policy affects every one of us. Its impact extends beyond public finance to our own bottom line, as individuals and businesses. The power to tax and the power to spend are at the heart of that impact. Is one more significant than the other?
I can’t say for sure, but I do have an opinion. When former Utah Congressman Gunn McKay visited my school in the mid 70s and took questions, I (being an overly confident and somewhat obnoxious high school student) wasn’t impressed with the fact that he was on the “powerful House Appropriations Committee.” I asked why he made such a big deal of it.
“What committee would be more influential?” He shot back.
“Ways and Means?” I ventured.
He didn’t agree, but I’ve stuck with the notion that taxation is at the very heart of public policy. Interestingly enough, though, in my experience it is easier to pass a tax incentive than pass an appropriation. Appropriations go through a more personal, subjective, almost mystical process known and controlled by only a few.
Of course, tax policy has its own dogma and associated phraseology, which includes counter-intuitive concepts such as tax expenditures and illogical constructions like, “How are we going to pay for a tax cut?” Speaking with accountants over the years I’ve confirmed that these phrases get it wrong. They mix up the two sides of the ledger, which are intended to provide a clean separation between revenues and expenditures. (Taxes are revenues. If revenues are cut, you don’t pay for the reduction; you come up with a plan to get by without it.)
Regardless of dogma, the actions of government officials affect the public as a whole. In our State Legislature, just about every policy decision, in addition to taxation and appropriation, can and does impact budgets—public, business, and individual. Newly enacted laws affect every sector, every business, and every one of us. We should all be paying close attention.
To cite a specific example, the 2014 general session of the Utah State Legislature eased the burdens on certain farmers by making it legal to bury a horse on their property. Really. (More on that to come.)
In my next post, I will begin looking at new laws passed in 2014 that may impact all of our financial health.