Tuesday, October 13, 2009

Local Government As Performance Art

Caught in a brutal vise of too much poverty, shrinking density and a broken tax structure, the next person to head up City of Memphis Government may need to be an alchemist, not just a mayor.

There are so many troubling trends taking place in Memphis, and they converge by necessity in the budget hearings of city government. Because of it, the acrimony and conflict of this year’s budget hearings are destined to become an annual event if nothing is done to dramatically change the key forces shaping our city’s future.

There’s the 20% bulge in children in Shelby County when compared to Nashville/Davidson County and its peer communities. It’s a regional anomaly, and when converted into public costs, it amounts to roughly $180 million a year. In other words, if we had the same percentage of students as Nashville, we’d be spending $180 million a year less in education alone (not including the costs of services to poor, at-risk kids).

Not Dense Enough

Meanwhile, the costs of delivering public services are going up because of the decreasing density of Memphis neighborhoods. Density fell 21% percent from 2000-2005, accelerating a trend that began four decades ago. When compared to 35 peer cities, Memphis is #5 in the greatest decline in density.

Today, there are 28% fewer people inside the 1970 city limits of Memphis as there were back then, and density is half what it was. While density is a key indicator of neighborhoods that work, it matters to taxpayers most of all. Public services are less expensive when they are serving high-density areas, and capital costs are almost 50 percent cheaper than low-density sprawl.

That’s why the strongest champions for high-density should be our local elected officials, using their bully pulpits to correct public misperceptions that higher density means lower property values; to persuade financial institutions not yet comfortable with funding urban-oriented construction; and to reinvent the local development standards that often discourage higher densities.

Upside Down Tax Policy

Finally, as a result of too many kids and too little density, we are paying the highest combined city-county tax rate in Tennessee. In the words of the Tennessee Advisory Commission on Intergovernmental Relations: "Memphis has the highest combined county and city nominal tax rate in the state…Total local taxes are regressive, since each of the three taxes (property tax, sales tax and wheel tax) is separately regressive. Regressivity refers to lower income persons paying a higher percent of their income for taxes than do higher income persons."

Put another way, not only are our taxes too high but the poorer you are, the greater percentage of your income is spent on them.

Because of these facts, contrary to conventional wisdom and despite relatively effective financial management, our tax rate is destined to remain high and the trends combine to push it higher. For example, if we had the same percentage of student-age population as most major metros, our tax rate here would essentially be the same as the tax rate in Nashville, a city we regularly reject and covet simultaneously.

Getting Real About Change

The fact that a contrary public opinion is widely held is testament to the purposeful way that local government obscures information from the public. For example, we may well have entered a world of Web 2.0, but local government seems incapable of creating a digital environment that would have measured up to Web 1.0. It’s understandable that many people have concluded that the government websites here aren’t accidentally cumbersome and unhelpful, but they are a direct reflection of the prevailing government attitude of obfuscation.

If we were the next city mayor, rather than hire the usual corporations that would charge more than $500,000 to reinvent the city website, we’d give five local, innovation website developers $20,000 a piece and challenge them to define what a public website should look like in the 21st century. More to the point, they should create a website that let’s the sunshine into city government and that contributes to a shift in a culture that hides public documents and treats public records requests as if we don’t have a right to know what’s going on in the government we pay for.

Here’s the thing: every transaction, application and request that the public can make standing on the other side of a government counter should also be available online. Every report, every tax freeze given by government and every study paid for by taxpayers should be posted on the Web. Every government form should be downloadable on the city website and it should get serious about engaging the public and giving them a voice.

Transparency Is Not Just Campaign Rhetoric

If there’s a model for is kind of transparency, it’s the Missouri Accountability Portal on the state government’s website. It posts detailed information on expenditures by agency, category, contract or vendor and salaries for state employees.

But there’s so much more that can be done here to save money. For example, there are mechanic shops working on publicly-owned vehicles for various agencies all over Shelby County. Even within city government, most divisions have someone assigned to handle information technology. The opportunities for merging functions that are replicated over and over again – from purchasing to maintenance to human resources – can yield more than savings. It also contributes to the sense of teamwork and collaboration that are sorely lacking in local government today.

In a nutshell, the challenge for the next mayor of Memphis is to create a high-performing government based on and focused on performance – from budgets to salaries. Today, there’s just no real connection between a department’s performance and its budget and there’s no connection between an employee’s performance and salary.

Performance Matters

We’re not saying this is about overlaying private sector models onto the public sector. As a Harvard study concluded years ago, government is too different for these simplistic notions – not to mention campaign sloganeering – about bringing business to government. (And the truth is that everyone is in favor of the government acting more businesslike until it affects them.) Despite this, the notion that performance can’t be applied to the public sector is outdated and flawed.

First and foremost, it requires for a set of outcomes to be defined and to link them seriously to budgeting, evaluation and salaries. To its credit, City of Memphis yearly conducts the Memphis Poll to understand the public’s priorities and opinions, but we’re hard-pressed to see any meaningful way that the polling results are applied to budgets or service delivery.

In the end, it’s about the kind of focus and accountability that can transform the culture of local government, because that’s really the overall objective. It’s also been called the equivalent of changing a tire on a car traveling 60 miles per hour.

No Waiting Room

To compound the challenge, a significant part of the public workforce are Civil Service employees who know that they can ordinarily wait out a person that sets out to change things, whether it is Kriner Cash, A C Wharton or the next city mayor.

We can’t afford to wait anymore, and while getting the basics of government right, it’s even more about reversing trends that exacerbate all of this in the first place. That’s the toughest challenge of all, because it requires the repopulating of Memphis, and this won’t take place until the public feels that its tax dollars are being wisely spent and are creating the kind of city in which they want to live.


Anonymous said...

Your observations about the city's websites is spot-on. MLGW's payment system is silly. You can't make a one-time payment w/a credit card unless you have Discover or an ATM card, and there is a fee attached. They make you go through CheckFree to make an online payment by check. A city the size of Memphis should be able to get that programmed in house, and not have to farm it out to a third party.

Anonymous said...

And why do we have to pay 2% to pay online? We're saving government time and money.

jford1983 said...

"You can't make a one-time payment w/a credit card unless you have Discover or an ATM card, and there is a fee attached."

And why do we have to pay 2% to pay online?

Some companies do charge a flat fee for making payments online and by phone, even utility companies do it. Whenever I made payments using Nashville Electric's online service (www.nespower.com), they would always charge a $4 flat fee. They have since moved to their own online system, waiving the fees in the process, and I think it's something that MLGW should look into doing themselves. If not now, then in the future.

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