This past fall, we stood up in front of about 200 people at the International City/County Management Association conference to talk about management issues. The speech was tricky: Much of the audience was made up of managers who hold responsible positions with municipal and county government, and they can get testy when a couple of journalists stand on a stage to tell them about their own business.
So we had an idea. In the minutes before the session began, we asked all the men and women in the room to answer two questions in writing. Question one asked, “When you think of the future financial stability of your government, what worries you the most?” And question two asked, “What routes to the future financial stability of your government are you most optimistic about?”
We got 127 responses. While we aren’t pretending that this was any kind of scientific survey, the results seemed more than sensible and worth sharing. To begin, the biggest worry in the crowd pertained to revenues. Even though about half the states have seen their revenues return to pre-recessionary levels, the number is far smaller among municipalities. In fact, 1 in 4 who sent us their responses indicated that oncoming revenue problems and shortfalls are significant sources of concern to them.
As you would expect, a fair number of attendees are placing their faith in a steady return of the economy to set things right again and put revenues neatly in line with expenditures. But the theory of rising tides lifting all boats wasn’t enough to keep the audience from coming up with a schooner full of concerns.
Jim McKnight, city manager of Rockledge, Fla., bemoaned the fact that “revenue sources are controlled by the state legislature.” Of course, he’s talking about decisions by folks in state capitols that determine whether cities can collect sales taxes, raise property taxes, use an income tax or make other revenue-raising decisions.
Even if the state does not stand in the way, it is hugely difficult persuading people that tax increases -- even small ones -- are acceptable. Ryan Harvey, a policy analyst in Provo, Utah, told us this story when we called him after the conference: His city was going to do a small property tax increase last year, just to cover inflation. But the citizenry wasn’t willing to go along. “One of the major objections we heard is that we were going to hurt the poor. That we were going to cripple them. But for the poor people who pay property taxes, we were talking about increasing them by a dollar a month or so.” Interestingly, an outpouring of concern for the poor came from the very same rich folks who were going to wind up paying a perceptible amount of additional taxes. We do not want to be skeptical here, but we can’t help but wonder who the wealthier residents were ultimately concerned about.
Other major elements mentioned by our respondents regarding revenue instability included decreasing state and federal funding, overreliance on property taxes given the potential of the housing market to crash again, and increasing demands for new programs.
But that’s just the beginning of the story. Many attendees were concerned about escalating employee costs, largely from pensions and other post-employment benefits. A good number of respondents told us that they were worried about pressing infrastructure needs and costs -- more pointed us in that direction than those who brought up health costs, the next most commonly mentioned item. Finally, though they described the phenomenon in a variety of ways, many respondents were concerned about rising citizen expectations in their cities for additional services now that the recession is allegedly over.
Inasmuch as we’ve spent the majority of our adult lives researching and reporting about state and local management, we found it particularly intriguing to note that the causes for optimism cited by the group largely fell into the area of managerial changes. More than 1 in 5 suggested that they were hanging their hopes on a variety of ways to prioritize services, control spending and inaugurate efficiency improvements. Tom McCarty, county administrator of Eau Claire County, Wis., was one of a number of people who recommended a focus on results-based performance measures to decide priorities. Others suggested that shared services and local government consortiums “will,” in the words of Caitlin Humrickhouse, a consultant at Baker Tilly Virchow Krause LLP, “provide a new operating environment that can help relieve some fiscal pressures.”
Particularly interesting was a post-conference chat we had with Greg Burris, city manager of Springfield, Mo. His city is studying storytelling -- using anecdotes to let constituents know how programs are affecting lives. “I’ve got my entire leadership team talking about storytelling,” he says. Burris’ rationale is that public employees are doing wonderful things every day, but the public doesn’t know about them. When that’s the case, it can be hugely difficult making any kind of meaningful change, even if there’s a lot of good data available.
“Performance measures impact the brain,” he says. “You can feel good about them. But what you remember are the stories. The people who hear [a good story about an accomplishment] will remember it a lot longer than a computer dashboard with statistics.”