B&G Report: The Fairness of Fines, Disappointing Government Websites, and Wasted Financial Reports

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by | January 23, 2014

Los Angeles has been raising parking fines on a regular basis. In fact, over the last six years the average fine has increased by some 75 percent to bring in some $61 million in additional revenues for the city, according to LA Watchdog. It’s clear that L.A. can use the resources. But we’ve been wondering whether this is a reasonable approach to bring in more cash. Maybe it’s better than raising taxes – because it’s avoidable for people who park legally. Maybe it’s worse, because it can be done without any input from the community and is potentially a marker along the slippery slope to using the LAPD as a revenue enhancement center instead of a public safety unit. What do you think?

In the Nov. 21, 2013 edition of the B&G Report, we pointed out that all the links to New York government reports in a checklist provided by the New York State library were broken. This, we indicated, was particularly important as the legislative website was so unhelpful in finding these documents. We pointed this out to a librarian there, who told us that he would make sure that word about this problem would reach the appropriate ears.

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We checked back with the library’s site. The links now work and bring the user to a library catalogue with the URLs. Great so far, but this is mostly useful for historical information. The list is incredibly backlogged. In the list of October reports for 2013, for example, the second item is the comptroller’s annual financial report. But the most recent report is for fiscal year 2009. If you Google “comprehensive annual financial report for the comptroller,” you can find one for 2013 on the comptroller’s own site.

Some 23 states have cut taxes or taken other steps to reduce revenues over the last year, according to the National Association of State Budget Officers (NASBO).

When we came across this factoid, in NASBO’s Fiscal Survey of the States, we were taken aback. So far, the country hasn’t been in anything remotely like a robust recovery. It’s been reasonably modest – and potentially cyclical. Is this the right time to cut revenue streams? We think it’s premature in most cases. While we can understand the political pressures at play, states are still smarting from all the service cutbacks they had to make the last time the economy turned south and their revenues followed along.

Mention technology’s impact on state and local government and most people picture fancy data-crunching systems or online services. But there are an awful lot of technological improvements that are somewhat more pedestrian but can make a lot of difference to taxpayers. Consider the challenge of keeping roads functioning adequately during snow and ice season in many northern states.

According to a recent release from the American Association of State Highway and Transportation Officials, “high technology systems like GPS guidance systems and low-tech products like potato juice are helping states to cut costs, improve efficiency and minimize environmental impacts.”

Some states are re-inventing traditional snow plows. In Maryland, for example, plows have only cleared nine feet of roadway at a time. But the state is now introducing so-called “dual-wingplows,” which can accomplish three times as much by using a central blade and two additional ones on the sides of the vehicle that can be used in a variety of configurations.

And what about the potato juice? The Tennessee Department of Transportation and other states are using “Magic Salt” on the roads before and after storms. “By applying Magic Minus Zero directly onto paved surfaces, ice and snow will not bond, black ice is eliminated. [It] will not degrade or corrode vehicles, and slip and falls are reduced,” according to a release from the manufacturer.

"It is literally true that political appointees and career executives and managers live and work in two different worlds. They have learned to adapt to each other rather well, but that doesn't mean the structure makes any sense." -- Richard Clay Wilson, Jr. in Rethinking Public Administration.

Nobody seems to get very excited any more about the potential of state and city websites to deliver services. But there’s still room for improvement. Consider a recent audit of San Diego’s city website.

The audit revealed that the city had a number of opportunities to expand its site to offer more services, including construction and special event permits and information about golf tee times. Among the reasons the website fails to offer such things is the fact that “The city does not have a strategic direction or policy initiative for online service delivery,” said the audit. “Cities with nationally recognized websites have a formal process in place to identify and create new online services.”

Perhaps more importantly, the audit indicated that the list of online services is incomplete and hard to find. As of September 2013, the city technically offered more than 50 services online, “but less than half of them are accessible from the homepage drop-down list labeled Access Online Services. To find some of the online services, a user would have to know which department offers the service, navigate to the department’s webpage, and then locate the link to the service.”

While we’re talking about disappointing government websites, consider a December performance audit in Michigan about the state’s so-called “one-stop business center.” The system was designed to help people who want to start, operate or expand a business. But seven of the nine departments responsible for registering, licensing and permitting businesses are pretty much ignoring the site. This is even after the state invested over $20 million in the business center. What’s more, state agencies have no strategic plans to encourage the use of the site. The auditor’s strong recommendation was that state agencies make specific plans to incorporate use of the site in the immediate future.

A few months back, we wrote a Smart Management column about the importance of looking at total compensation when making comparisons between public- and private-sector employees, rather than just relying on pay. A recent study out from the Bureau of Labor Statistics shows just how important non-wage compensation is. Wages and salaries averaged $27.38 per hour and accounted for 64.4 percent of compensation costs. Benefits took up the rest, with the vast majority broken down in this way:

  • Insurance benefits were $5.14 per hour, or 12.1 percent of total compensation. The largest component of insurance costs in September 2013 was health insurance, which averaged $4.98, or 11.7 percent of total compensation.
  • The average cost for retirement and savings benefits was $3.97 per hour worked in state and local government, or 9.3 percent of total compensation.
  • Paid leave benefit costs include vacation, holiday, sick leave, and personal leave. The average cost for paid leave was $3.11 per hour worked for state and local government employees, or 7.3 percent.
  • Costs for legally required benefits, including Social Security, Medicare, unemployment insurance (both state and federal), and workers’ compensation, averaged $2.56 per hour, or 6 percent.

We’ve often wondered why it seems that university systems don’t use metrics for operational efficiency as much as many other entities that are funded – at least in part – by the government. A new report from the North Carolina General Assembly Program Evaluation Division recently reviewed the University of North Carolina’s efforts – or lack thereof.

The report points out that, since 2006, the UNC system has saved over $100 million from eleven projects aimed at measuring and improving operational efficiency. You’d think that would have led the system to do more and more. But, says a release about the report, “Despite these savings, the UNC system lacks important characteristics of a comprehensive approach. . . .The system also does not use specific metrics that measure the operational efficiency of its constitute efforts and lacks a reliable funding source for those efforts. In addition, most campuses do not track savings...”

The really alarming part of this evaluation is that we’re guessing the UNC system may well be doing more than most others.

Here’s an unnerving survey result from a new International City/County Management Association white paper: Apparently, state and local managers think that there’s a real benefit to the annual financial reports their entities issue. But, at the same time almost two out of three ICMA respondents stated that these audited statements “do not play a significant role in their policy decisions.”

This just provides more evidence, to us, that there’s a disproportionately large role played by budgets in states fiscal policy decisions, with too little emphasis on the year-end statements. After all, budgets are at best a predictive tool – and frequently differ from the events that actually come to pass. Financial statements, on the other hand, are an effort to actually portray the real world, constrained mostly by the kinds of issues that can afflict any individual accounting system.

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