The Centralization Continuum

States and local governments have been swinging like a pendulum between powerful and weak central controls.
 

From time to time, we fantasize about becoming consultants to governments. Truth is, there are a half-dozen good reasons why it's not a likely career path for us. Nonetheless, in our fantasies we do the job quickly and efficiently: If we're hired by a city or state that gives little power and authority to agencies, we write a 30-page report telling them to decentralize. And if we work for a government that is very decentralized, we write a 30-page report telling them to centralize.

The fact is, with or without consultants, cities and states over the past couple of decades have swung like a pendulum between powerful and weak central controls. Unfortunately, many wind up going too far in one direction or another. Florida, for example, did a pretty good job at giving agencies authority in the realm of human resources. They make their own hiring decisions and have a great deal of control over their employee base.

The downside, though, is that the central personnel office has been pretty much in the dark in terms of data about the state's overall work force. Agencies apply classifications and civil service rules differently. Planning for future work-force needs statewide became a complex task, since the information necessary for such a process was spread all over the place. On balance, the state may be better off without a powerful Wizard of Human Resources who hands down commandments from on high. But it would clearly be best off on a more middle ground.

One area that has been historically decentralized is the maintenance of public buildings. It's kind of odd that even governments that have rigorous long-term capital plans seem to lose their sense of responsibility once the ribbons have been cut. Houston, which has just begun to move toward a more centralized management structure for building maintenance, doesn't even have a central inventory of the 1,000 or so facilities with which the city is involved.

At the other extreme, some cities and states keep their agencies in tight shackles--particularly on budgetary matters. Cleveland, for example, gives managers minimal flexibility to move money around within budgeted categories. What's more, most acquisitions of more than $1,000 must be put out to bid. The ethos in Cleveland is understandable--extremely tight controls seemed just the ticket after the city's brush with fiscal disaster some 20 years ago. But, a generation later, such constraints could probably be loosened without the city suddenly lurching toward default.

Perhaps no area has witnessed such violent swings as information technology. In the 1970s, many cities and states turned over complete control of their computer systems to technocrats who assumed something of a dictatorial role over the agencies. Then, as desktops and networks replaced mainframes, agencies happily freed themselves from their indentured servitude and bought their own systems--often with no regard whatsoever for what anyone else in the government was doing. For many cities and states, the net result was a hodge-podge of high- tech enclaves that couldn't share information with one another.

A couple of decades ago in Nashville, for instance, city agencies were dictated to by a central office--one official described it as "autocratic"--that controlled the city's mainframes. When desktops and networks made it possible for the agencies to run their own shows, they happily escaped from heavy-handed rule and bought all manner of software and hardware. The net result is a "patchwork" of non- compatible systems. The current administration is now implementing and enforcing standards that will, in time, make Nashville's IT far more effective and efficient.

Similarly, Milwaukee has brought in a chief information officer and given that CIO authority to set standards and to enforce them. "Everybody wants to retain the best parts that decentralization has given us--it has fostered a lot of innovation and creativity in departments," explains Gary Langhoff, the budget and management team leader there. "What we don't want to do is go back to some kind of IT dark ages, which is what existed in the early 1990s, where you have this monolithic structure saying, `No, you can't do that. Yes, you can do that.'"

The key, whether in human resources, budgeting, IT or any other realm is to "trust, but verify." As Michigan's CIO, George Boersma, puts it, "You have to go and balance centralization with empowering the local people." The movement toward using performance measures certainly adds to the capability of some governments to give adequate power to the agencies while still maintaining solid oversight.

It's unquestionably a good thing for agency heads--the people closest to the tasks at hand--to make their own decisions. But without accountability to the central government, creativity can become chaos.

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