The Center for Local Innovation recently released its annual By the Numbers report. The report summarizes information from the state Treasury Department about the cost of local government for the most recent year available (in this case 2003-04). It is an arduous task at best and author Michael Lowrey is to be commended. Inevitably the report generates a great deal of debate across the state and many localities feel unfairly judged by the report because some officials think it mischaracterizes their tax burdens and may not reflect localities’ true quality of life.
There are many more legitimate critiques of the report, but it is the best way for citizens and the press to have some idea about how much money is going to local government. It is also a useful tool to recognize quickly the differences in population, annual average salaries, and other facts by comparison statewide.
As expected, the report continues to show that the cost of local government is rising. It is rising in actual numbers and even as a percentage of people’s incomes. It is rising faster than inflation. It is rising faster than population growth. And without sounding like a Dr. Seuss book, it is important to note what is going on. More often than not, we hear sporadic stories about a tax increase here and there, but the report shows that it is an upward trend.
We can debate the reasons for this and would probably agree that one of the most egregious reasons is the ridiculous mandate of having counties pay for part of Medicaid. It’s simply appalling and an embarrassment to our state. This policy will change. It’s simply a matter of time, but it will change.
But there are additional reasons that are more the result of social creep than an insidious conspiracy to deprive you of your income. The belief that a new program will dramatically improve quality of life in and of itself isn’t inherently wrong, but the problem is that boards change hands, managers leave, staff turns over, and there is rarely a review, at the program level, of what should be phased out or simply stopped.
There isn’t a real requirement to prove that funding is necessary. We simply grab the previous budget, add a few new program idea, add in the oppressive mandates from the General Assembly and poof! a new budget pops out that not only spends the additional tax base but also requires another tax increase. And, no, I’m not forgetting about education, but it is subject to much the same duress.
As I toured the state earlier this year, I pointed out that in the 2003-’04 budget year, 35 counties had increased property taxes, in ’04-’05, 32 counties followed suit, in ’05-’06, 45 counties increased taxes. In fact, 19 counties this past year had tax increases of more than 10 percent. I often say the fact that only 32 counties increased taxes in ’04-’05 was because it was an election year, I predict fewer than 45 will increase them this year for the same reason.
There are many innovative ways in which we can actually improve government at the local level. Performance management actually improves morale, increases responsiveness to public concern, saves money, and rewards hard work. Competitive sourcing tests the way in which local government spends money for services by ensuring that anything that can be done in a competitive way is done so. As we approach yet another budget cycle, we should be always vigilant in looking for ways in which to phase out outdated programs, reluctant to create new programs, and desirous of ways to actually limit the growth of our local bureaucracies.
Chad Adams is director of the Center for Local Innovation.