B&G Report: Questionable Budget Claims, CIOs Top 10 Priorities for 2014 and More

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December 3, 2013

Statehouse reporting is on the wane. Personally, we mourn the demise of strong newspapers that provide an independent check on state government. The good ones haven’t just covered politics but dig into management and policies – and put them into context. But we’ve gotten to wondering how universal our sentiments are. We’re curious to hear from the practitioners among our readers about how much – and if – they miss what we perceive to be the good old days of more complete coverage of state matters. Tell us what you think.

Perverse outcomes. Over and over again, we see states, counties and cities setting goals that result in unanticipated, negative consequences. In Arkansas, for example, authorities launched an investigation after a parolee with multiple past violations was charged with kidnapping and murder. It raised unsettling questions about whether a state’s decision not to revoke parole for some violators may have stemmed from a desire to keep official recidivism rates down. This has led to some reforms, which had the unfortunate side effect of overcrowding county jails – which has the state going back to the drawing board.

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This kind of thing reminds us of an incident that happened to our son (now 27) when he was in third grade: His teacher was deeply concerned about keeping textbooks neatly wrapped in handmade book covers in order to protect their physical integrity for the next year’s class. She made a major point that the boys and girls must keep their book covers in good shape – and indicated that at the end of the year she’d be checking them to make sure they weren’t frayed in any way (she even offered a reward to the owner of the most pristine cover). Our son came up with the only logical solution: He removed the book covers altogether, left them safely at home, and put them back on the books at the end of the year. He still didn’t win the prize, by the way.

California’s Legislative Auditor’s Office (LAO) provoked a slew of positive headlines a few weeks ago when it announced its prediction of year after year of healthy budgets. “The state’s budgetary condition is stronger than at any point in the past decade,” said the report, encouraging the Associated Press to dub the fiscal status of the state a “stunning turnaround.” But it didn’t take long for other press outlets to start looking a little more deeply, and the news reports turned – justifiably – a bit more realistic.

“You can balance the budget if you don’t make the adequate appropriations to long-term obligations. It’s like having a huge credit card debt and saying that your budget is balanced because you can make the minimum payments," said Steve Frates, director of research at Pepperdine University, in an article in the San Diego Union-Tribune.

The point? The state still has mind-numbing long-term obligations, notably to its pension fund, that can easily suck up the potential surpluses the state anticipates. The LAO itself acknowledged that its projections of surpluses didn’t take into account these long-term liabilities.

A Challenge to Wyoming. We’ve reported repeatedly in this space about large capital projects that go past deadline and over budget. There’s absolutely no reason in the world to think that the capitol renovation in Wyoming – recently priced at $113 million – won’t go smoothly and come in exactly on budget. But just to satisfy our own curiosity, we’ve decided to follow the progress of this particular effort as contractors upgrade and rehabilitate the building. If all goes well and the price tag is genuinely at $113 million, we promise to give the state big kudos here. If not, well, we’ll have an interesting case study to write.

"All cities are mad: but the madness is gallant. All cities are beautiful, but the beauty is grim.” ― American journalist and author Christopher Morley

New York City Mayor Michael Bloomberg’s administration has done a great many things that have helped put the city on better financial footing. And for that we congratulate his team. But the administration may have overstepped a bit when it announced that Bloomberg was handing the city over to the next mayor with a fully balanced budget. As we’ve pointed out in the past, balanced budgets are often an ephemeral thing – here one minute and gone the next. And that seems to be the point made in a late November release by City Comptroller John Liu, who said: “The Mayor’s math doesn’t add up. The facts are clear, not only will the next administration not inherit a balanced budget but it will also be greeted on Day 1 with a fiscal mess of historic proportions – 300,000 employees working with expired contracts.

“Mayor Bloomberg’s final budget modification continues to conceal huge fiscal risks and rely on one-shots like selling city property and depleting the Retiree Health Benefit Trust. His budget may seem balanced on paper, but the fiscal reality points to multibillion-dollar budget gaps on the fiscal horizon.”

Along the same lines, a number of states have happily reported that they were heading to surpluses at the end of this year. But this is a time for caution, not for huzzahs, based on a recent report from the National Conference of State Legislatures (NCSL).

It’s true that the surpluses are here. But, according to NCSL, state year-end balances in a number of places are likely going to fall by the end of fiscal year 2014. Here are a few of the pivotal conclusions in the report: As of August, it appeared that 31 states were going to show year-over-year growth from 2012 to 2013. But for next year, the growth rate for the states was projected at 1.3 percent, while appropriations increase by 3.9 percent. That’s a potentially alarming mismatch. No disasters, necessarily – not one state is projected to end that year with a deficit – but well worth keeping in mind.

Note to crooks: Stop tweeting your crimes. The International Association of Chiefs of Police has released its fourth annual survey about law enforcement’s use of social media. Three big takeaways:

  1. Out of a total of 500 law enforcement agencies representing 48 states, 95.9 percent use social media in some capacity.
  2. The most frequently used social media platforms are Facebook (92.1 percent), Twitter (64.8 percent), and YouTube (42.9 percent).
  3. 80.4 percent of agencies report that social media has helped solve crimes in their jurisdiction.

Want to reduce crime and save money? Take a look at this inventory of programs that have had the greatest benefit relative to their costs, from the Washington State Institute for Public Policy (WSIPP).

For example, WSIPP looked into a system called “Risk, Need and Responsivity” that, simply put, matches the likelihood of further offenses to the way the state deals with community supervision of high and moderate risk offenders. It found that this approach produces almost five dollars of crime-reduction benefits per dollar of costs. On the other hand, intensive supervision, where the focus is solely increased surveillance of offenders, “does not reduce recidivism and is a poor investment.”

The National Association of State CIOs has issued its list of top ten priority strategies, management processes and solutions for next year. Number one on the list is security – the first time it’s reached that position in recent years. Here are the top three on the list:

  • Security: risk assessment, governance, budget and resource requirements, security frameworks, data protection, training and awareness, insider threats, third party security practices as outsourcing increases, determining what constitutes “due care” or “reasonable”
  • Consolidation / Optimization: centralizing, consolidating services, operations, resources, infrastructure, data centers, communications and marketing “enterprise” thinking, identifying and dealing with barriers
  • Cloud Services: scalable and elastic IT-enabled capabilities provided “as a service” using internet technologies, governance, service management, service catalogs, platform, infrastructure

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