Publisher's Note: Hard choices
By Jody Reese
Perhaps the state of New Hampshire should start playing the lottery.
According to our cover story this week (page 12), we are currently on track to spend $250 million more than we bring in. Our story looks at some creative ways to make up that difference, from selling state parks to privatizing the prison system.
The next budget cycle is expect to produce a half-a-billion-dollar hole.
Last week I wrote about taking a more longterm view of what services we provide and how we pay for them. Even though the recession gets blamed for all our woes, the real culprit is rising Medicaid and retirement costs — almost all related to the cost of health care (though, to be fair, our retirement system is bloated with back-loading salary in the last three years to create higher retirement payouts). These costs as they stand are consuming a larger and larger share of government spending. If we don’t want to lose our other parts of government services, such as prisons, courts, police and environmental services, we’ll have to make the tough decision to raise taxes or deal with these costs.
If we turned to raising taxes, we’d be looking at an increase of 15 percent or more every year. Not only would this be politically unpopular, it’s unsustainable. Though tax increases will surely be part of a long-term solution, reducing the cost of our retirement system and Medicaid programs is a must.
Reducing those costs can happen a few ways. The easiest and potentially most unpopular would be to restrict access to Medicaid and the retirement system. If we’re serving 200,000 people, move the line and serve only 100,000. Same goes for the retirement system. If you can retire at age 55 with 30 years of service, move the equation to 65 plus 40 years of service — and so on. Of course the federal government might have restrictions on providing less Medicaid and such retirement changes would only apply to incoming folks.
A far more reasonable solution would be to look at curtailing the cost of providing benefits under Medicaid and the retirement system. If the current system isn’t working, why not create one of our own?
Could a long-term solution be that our state government actually provide lower-cost health care to retirees and Medicaid recipients? Why not hire a few doctors, rent some space and get those costs under control? This could be accomplished through a private contract or by creating a government-run network. Would it be the Cadillac of health care? No. But it could get the job done, save us billions and still provide basic care to those who can’t afford it.
Obviously, this idea has many drawbacks and potentially many issues, but it goes to the point that in order to deal with these huge issues we’re going to have to make hard decisions and change the way we do things.
In the end, closing the courts for a few days or letting a few hundred prisoners loose is only forestalling our Medicaid and retirement issues.