Public Money

Uber’s Unforeseen Fiscal Challenges for Government

The explosion of sharing or on-demand services like Uber and Airbnb is the beginning of an economic upheaval every bit as significant as the industrial revolution. The on-demand economy promises to radically reshape the cost of services and change the face of the workforce. These upheavals, in turn, are altering state and local government policies -- imposing unforeseen fiscal risks.

One of the fallouts, for instance, is an upsurge in the growth of temporary or part-time workers, such as Uber drivers, Airbnb hosts and Axiom Law attorneys. These workers are providing on-demand services at rock bottom prices. They are not working in downtown or suburban office buildings or for traditional employers, nor are they eligible for traditional health-care or pension benefits. The challenges for states and localities, therefore, will be how, in light of these changes, they adjust tax policies, revise regulations for zoning and public safety, and provide retirement benefits.  READ MORE

The ABCs of Cost Accountability

There’s an old adage: Politicians are all for efficiency, but only for programs they don’t like. That’s why asking if a program is cost-effective is usually a political nonstarter.

But sometimes what stuff costs becomes a hot political question. In fact, we’ve seen a predictable pattern since the mid-1980s: The economy starts to bounce back from the most recent recession; state and local leaders recall the dreadfully blunt ways in which they cut their budgets during that recession; and they vow that if they ever have to do it again, they’ll get the right information to whittle down spending in a strategic, focused way. Around this time they start to hear about an accounting method known as activity-based costing (ABC) that can solve this problem. READ MORE

Ebola Scare Highlights the Uncertain Costs of a Pandemic

With the arrival of Ebola in the U.S. came public fear, widespread misinformation, and the ever-present danger of contamination and contagion. While the cases have been isolated, the threat of the virus required state and local leaders to assume unprecedented leadership and extreme diplomacy in dealing with the public, the medical community, and even medical suppliers and contractors, who balked at handling blood samples, soiled linens and hospital waste out of fear of the virus.

But when a virus like Ebola hits a jurisdiction, there is a hefty fiscal price as well. In Texas, Dallas County was the first U.S. locality to deal with the sudden challenge of an outbreak. The impact on the budget was not inconsequential. It cost the county a quarter of a million dollars to gut and decontaminate the one small apartment of the nation’s first Ebola victim, Thomas Eric Duncan -- part of the approximately $1 million the county expended in the first weeks of the crisis. READ MORE

Environmental Risks Becoming Part of Bond Assessments

Each spring the city of Orting, Wash., is the final stop on the Daffodil Festival Parade. Against the expansive backdrop of Mount Rainier, this town of 7,000 puts on a wonderful show that earned it the nickname “Small Town, Big View.”

MORE: Read the rest of the December issue. READ MORE

States Struggle to Contain Firefighting Costs

Firefighting is expensive. In the past 30 years, the costs for key pieces of equipment have jumped more than fivefold. And that’s the least of it. The time and training to become a certified firefighter have increased. Volunteers, who make up roughly 70 percent of fire department personnel, not only pay for their own training but also face additional indirect costs, such as temporary lodging, lost time at work and medical expenses. Not surprisingly, a growing number of localities are confronting a significant decline in volunteer firefighters.

A recent report from Pennsylvania, where 96 percent of all fire companies are fully staffed by volunteers, spells out the problem. The state’s 72,000 volunteer firefighters provide services with an estimated annual tax savings value of $6 billion. But those savings and systems, as the report notes, “are creating increasingly serious challenges,” including a decline in the number of active volunteer firefighters (down from 152,000 in 1985 to 72,000 today); difficulties in funding, with volunteers spending 60 percent or more of their available hours on fundraising activities; and unnecessary and inefficient duplication of firefighting equipment. READ MORE