Public Money

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

Seattle Adopts an Old Way to Pay for New Parks

Seattle produces some of the finest brewed coffee in the country, and some of the top software. Even its long mild winters are among the best in the world. But if you ask Seattleites what gives them the greatest civic pride, many will point to their world-class city parks. Seattle’s leaders often use parks in the same sentence with words like “community identity,” “bridging generations” and “social justice.”

That’s why it’s so encouraging that Seattle voters recently reconceived how they’ll pay for them. Like Amazon with online retailing or Costco with big-box stores, Seattle might be out ahead with yet another disruptive trend for its citizens. READ MORE

Fracking's Financial Losers: Local Governments

The shale gas market is an economic boon for the 30-odd states that permit fracking. The severance tax states impose on the process adds up. In 2010, it generated more than $11 billion. The flow of that revenue goes straight into state and federal piggy banks, as does increased corporate income tax revenue from energy companies profiting from fracking.

Localities, however, enjoy no such benefits. Instead, they get stuck with all the fracking problems: noise from blasting, storage of toxic chemicals, degraded water sources and heavy truck traffic, as well as the rising costs of cleaning up the detritus fracking leaves behind. North Dakota counties affected by hydraulic fracturing have reported to the state Department of Mineral Resources’ Oil and Gas Division that traffic, air pollution, jobsite and highway accidents, sexual assaults, bar fights, prostitution and drunk driving have all increased. READ MORE

Should Someone Audit Government Auditors?

The California state auditor’s office raised lots of eyebrows around Sacramento last spring. In an annual review of the state’s financial statements, auditors identified more than $30 billion worth of errors. They found faulty accounting assumptions, transactions recognized incorrectly and simple arithmetic mistakes, among other problems. Fortunately, these errors were corrected before the final financial report was published.

In a state with almost $300 billion of assets, enormous pension funds and dozens of quasi-independent entities under its purview, a few small mistakes can quickly add up to $30 billion. Controller John Chiang, whose office prepares the financial statements, characterized many of these as honest errors attributable to understaffing and a lack of clear internal procedures -- fixable problems. READ MORE

Can Governments Give the People What They Want?

Know what a trend gap is? It’s the difference between governments’ long-term ability to provide public services that the public demands, and citizens’ willingness to pay for those services.

That’s according to Bo Zhao and David Coyne, two economists who have been using the phrase as a measure of the long-term fiscal sustainability of states and localities. READ MORE