Private Perks are Nice, But Not at Public Expense

Overstated savings, underestimated budgets, and more
by | October 22, 2009
 

"Wrong on this one," wrote one of dozens of B&G Report readers responding to an item of ours a couple of weeks ago. The Anchorage Daily News had covered an audit about the use of city credit cards. That led us to write that perhaps some of the personal items discussed might really have legitimate benefits to cities -- including, for example, flowers for hospitalized spouses of employees. Knowing that this might be a contentious issue, we invited readers to tell us if they agreed or disagreed.

The latter group overwhelmed the tidy handful of e-mailers who thought we had a point. The vast majority told us that the very notion was some combination of illegal, unfair, unreasonable, foolish, ineffective and "a misuse of public funds."

As we read the notes, we turned around in our thinking -- if not 180 degrees, then at least 120. At a minimum, it turns out that our suggestion is probably both impractical and hideously timed. (We had to agree with the folks who wrote that having a city pay for get-well flowers probably isn't a good idea at the same time as it is laying off employees.)

But there was a great deal more to be learned from our deluge of electronic mail. In the next B&G Report, coming out two weeks from today, we'll go into detail.

As a side note, while we were kind of reeling from this onslaught, we also got an e-mail from Anchorage's eminently reasonable director of internal audit, Peter Raiskums, who pointed out that we had picked up the wrong spelling of his name from the Anchorage paper. This made us sorry we had brought the whole thing up in the first place.


It's very difficult to translate ambitious plans for program savings or new revenues into reality. Anyone who doubts that should take a look at the legislative auditor's recent review of Wisconsin's Accountability, Consolidation, and Efficiency Initiative.

Some of the news is good: The state saved $19 million over three years by negotiating better prices for purchasing of goods and services. But the initial savings projections of $200 million over a four-year period that ended last June were vastly overstated. Some of the plans simply didn't materialize. The legislature authorized the Department of Administration to sell $76 million in surplus property over the last two biennia, but the actual sales only amounted to $9.6 million. An effort to consolidate IT and provide support services for 20 agencies moved far slower than expected, with the task completed in only seven agencies after four years.


Beating a dead horse? We seem to be fixated on the speed with which allegedly balanced budgets are proving to be anything but. The following is from the Kaiser Family Foundation's latest annual report on Medicaid, released in late September: "Medicaid officials in three-fourths of the states believed there was at least a 50-50 chance that initial FY 2010 legislative appropriations would be insufficient, including a dozen states where a Medicaid budget shortfall was regarded as almost certain. Thus, the FY 2010 growth rate for total Medicaid spending is expected to be higher" than the 6.3 percent growth reflected in the budgets. You can find the full report here.


Our favorite quote of the week comes from Virginia State Senator Janet Howell, in the Washington Post. Howell was commenting on a damning legislative audit that provides an update about the disastrous 10-year Northrop Grumman deal to outsource Virginia's information technology. Said she, "This is a cautionary tale on what can happen with public-private partnerships. The lesson is be very cautious -- and don't be the first state to do it."


User fees have always seemed like a sensible idea to us -- when they're utilized sensibly. But we've been troubled by issues of fairness in states that charge fees to people when they file a lawsuit. To us, access to the courts has never seemed much different from access to schools or city hall. But we haven't ever really delved into the topic, and we're confident that there's a rational countervailing argument.

With that in mind, we were particularly interested in an Associated Press piece indicating that a lawsuit has been filed in Oklahoma over just this issue. According to the article, the suit alleges that these fees "are unconstitutional and should be struck down. Among other things, [the suing attorney] claims the fees, which can total hundreds of dollars, interfere with a citizen's constitutional right to unrestricted access to the state's courts."

Meanwhile, agencies that rely upon these fees for funding are concerned about which way the case will go. For example, domestic violence shelters in the state depend, in part, on these dollars. "It's a lean, lean time right now and losing these fees could really be problematic," Charlie Price, spokesman for the state attorney general's office, was quoted as saying in the article. We'll keep you posted when a decision comes down. The case seems particularly interesting at a time when governments are desperate for revenues and see user fees as one good alternative.


Bus stop. A new audit report from the auditor's office in King County, Washington, makes a number of recommendations for saving between $23 and $31 million a year on the county's buses. The majority of the savings, the auditor's office says, could be found simply by scheduling buses more effectively. One particularly interesting example: Nationally, buses spend about 21 percent of their hours in "recovery time." That's the time they spend for "operator breaks, to ensure that buses leave on schedule for their next trip and to maintain adequate spacing between buses," explains Northwest Hub, an online news site. But King County Metro Transit's average recovery time is more like 29 percent, which means that over an eight-hour span, the bus is standing still for about two hours and 20 minutes. So just getting to the national average could help a lot.


We can't count the number of times we've spoken to government officials who are appalled at press coverage of their work. So we were intrigued by a research article written by Rebecca Goldin, director of research at Statistical Assessment Service (STATS), a nonprofit affiliated with George Mason University whose goal is both to offer educational resources and to call attention to poor or exceptionally good media coverage. She argues that misrepresentations in the press are frequently due to a lack of understanding of basic numerical concepts.

On Goldin's list: the difference between causation and correlation; the meaning of "statistically significant"; orders of magnitude and the "prevalence" of a problem; confounding factors; relative risk versus absolute risk; margin of error and the importance of scientific consensus. You can find her piece and many other items of interest on the STATS Web site.


Despite all the good reasons for balanced-budget requirements in state and local governments, are they always a good thing? A few experts in the field have questioned this in conversations with us recently. Maybe, they speculate, it would be a better thing to let a little deficit hang over to the next year, rather than precipitously cutting services, raising taxes or using budgeting gimmicks. We understand the dangers inherent here. But we also think it's an idea worth thinking about. And we'll bet there are more than a few people doing just that.


After years of on-and-off cutbacks in a number of states, we've long been concerned about the capacity of public health departments to do their jobs. Now it looks like the new seasonal flu shots will present an interesting opportunity to see just how well many can perform, according to a University of Maryland associate engineering professor, Jeffrey Herrmann. He has created software to help public health officials plan the logistics of allocating flu vaccines.

"It's like a preseason game for public health officials," he says. "These vaccination clinics give public health officials a chance to execute their plans in a real-world situation, unlike the exercises they've been practicing, and then to improve them before a more dangerous threat appears," Herrmann adds. "Experience and good planning are essential to saving lives when public health officials must respond to a deadly infectious disease."


Times are tough for employees everywhere. No news there. Layoffs leave some people overworked, and the lack of other resources coupled with fears about the future make for one tense trifecta. One byproduct, according to a CareerBuilder.com study: "Longer hours and heavier workloads are common in the current economic climate and employers are becoming more flexible with their time-off policies," said Rosemary Haefner, vice president of human resources at CareerBuilder. "Sixty-three percent of [those] we surveyed said they let their team members use sick days for mental health days. If you need time to recharge, your best bet is to be honest with your manager."


Research Assistant: Heather Kerrigan

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