Having recently experienced a Minnesota state government shutdown (and on the verge of a federal one), we should draw some more fundamental lessons than the left vs. right politics are messed up, personalities affect outcomes, etc. These are all true given the structure of the game. Why must the game be structured this way?
We have over the past two centuries centralized government, removing functions from independent groups of individuals (charities, guilds, clubs, companies) and brought those functions into centralized government. (Well, several single centralized governments: national, state, local). There were reasons for all of these changes as they occurred, but the reasons at the time may or may not still apply. Sometimes the government service emerged from a central government when the economies of scale were large, sometimes the function is a result of state takeover of private institutions.
I propose the lesson to be learned is that, to avoid a total government shutdown, the government should not be totally central.
The budget should not be unitary, with all resources into a giant pot, where it is centrally allocated out to all functions. This structure makes the government fragile. A robust government should not shut down because of an impasse. Each department/division/agency should have its own revenue sources and its own expenditure authority, most of which are not subject to annual legislative approval. So for instance, the Department of Transportation has a gas tax and some miscellany. A transportation commission decides the expenditures and the revenues required to satisfy them, and with approval from a public utilities commission for any changes in rates, goes forth, and collects revenue and spends money as needed to provide services. This kind of DOT is not shut down because of a decision impasse in some other department.
Looking up the functions of state government, I found the list below of the Governor's Recommendations by agency. The shear number of agencies is almost enough to make one a (big 'L') Libertarian.
I believe many of these functions are important, and many of course are relatively small. In the small category, The Barber Board, for instance has $188,000 in expenses and $221,000 in revenue. But does barbering really require (a) state licensure (Matthew Yglesias has been doing a series mocking licensing requirements), and (b) state budgetary approval, i.e. shouldn't this be self-managing and autonomous, so it does not need to be on budget. Why should a profitable unit of state government be subject to shutdown? Can't the state just charter a Barber's Guild (Civil Engineer's Guild, etc.) and be done with it?
[We could then deregulate, and allow you to get your hair cut by someone not in the Barber's Guild, at your own risk of a bad haircut. Similarly (if not more controversially) with a Civil Engineer's Guild, where there would be a regulation for full disclosure so that the building would have to prominently identify the engineers and architects and who certified them. If insurance would not be given on buildings not designed by certified engineers, few would build, live in, or work in such buildings. If insurance is readily given, perhaps the certification is not deemed valuable.]
Many of these regulatory or service units are, or should be, self-funding, suggesting they need not be state agencies. Many of the "Boards" fall into this category.
DOT of course could break even with an appropriate user fees.
Corrections historically was a profitable agency, Stillwater wanted the prison back in Territorial days as the free labor helped the logging industry. I am not suggesting we recreate that, but if we reduced the number of prisoners by decriminalizing more drugs, e.g., and then managed the remainder, we might have companies bidding to operate prisons, rather than subsidizing it.
Police similarly could break-even on many crimes, misdemeanors and offenses, by charging appropriate fines. This might create perverse incentives if carried too far, fines could not be too high or the police would have no revenue due to no crime. But fines instead of, or in addition to, prison could be considered for more non-violent crimes. Other departments also have enforcement/fine characteristics (human rights, agriculture, commerce, labor and industry, etc.) which could be separated. An off-budget Board (appointed by the Governor with Legislative consent) would manage the revenue and expenditures, and would have authority over some revenue stream (e.g. licensing) (as authorized) until the authority was removed.
If we can separate the regulatory and redistributory functions, and rethink what is provided by government vs. what government wants to ensure is provided, we can have a robust network of separate, smaller institutions (public and private), and a minimal centralized structure that can be paralyzed at the whim of a few parties.
This is a blog post, not a thesis, so I won't go into every department and suggest how it could be given autonomy (revenue + authority), but many of these are self-apparent.
The list of State Departments