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The generally bleak biannual Fiscal Survey of the States report was released today by the National Association of State Budget Officers (NASBO). It contained quite a bit of dismal, though not unexpected, news. In 33 states, general fund revenues are coming in below estimates this year. Pension and health care costs continue to rise faster than inflation. Twenty-three states had to make mid-year budget cuts, the highest number since FY2010. While general fund growth for the current year is 2.4 percent, expected spending growth is 4.1 percent (That’s excluding Illinois which throws off the figures because of its unique budget situation). General fund ending balances and rainy day funds dropped from $81.1 billion at the end of Fiscal Year 2016 to an estimated $69.4 billion this fiscal year. For 46 states, Fiscal Year 2016 ended June 30, 2016 and Fiscal Year 2017 ends June 30, 2017. (The most recent financial information in the report is from April.) A hint of better news comes in the projections for next year’s budget, which are a bit more optimistic. One reason is that oil and gas prices have been rising – good news for natural resource states, if not for drivers. General fund revenues are projected to grow 3.1 percent in Fy2018. A bit of that expected growth comes from tax and fee changes, which are slated to bring in $3.7 billion more overall. Fifteen states are raising taxes or fees and twelve are reducing them. Most notable hikes are in Oklahoma, Pennsylvania and Washington. Two powerful recessions in this century have generally heightened state caution. Although revenue is expected to grow 3.1 percent next budget year, spending is only going up 1 percent. States plan to add about $4 billion to rainy day funds in their upcoming budgets, with only seven states foreseeing declines in their rainy day fund balances. (Rainy day funds in 2017 held $49.6 billion, very close to the 2016 figure.) The area in which the largest number of states plan budget cuts in Fiscal 2018 is higher education (19 states). K-12 education is the area that will see cuts from the least number of states (11).  Six states plan some cuts to employee benefits next year. They are Alaska, Connecticut, Illinois, Massachusetts, New Mexico and West Virginia. We should point out that NASBO’s Fiscal Survey of the States focuses just on General Fund spending, which is about 40.4 percent of the total. Federal fund spending for states make up 31.2 percent, other state funds are 26.3 percent and bonds represent 2.1 percent. Mosts and leasts: State with the largest rainy day fund balance projected for FY2017: Texas with $10.2 billion States with no rainy day fund balances in FY2017: Arkansas, Illinois, Kansas, Montana, New Jersey, North Dakota and Pennsylvania State with the biggest spending increase planned for FY2018: Nevada at 7.3 percent State with the biggest drop in spending for FY2018: North Dakota at -23.4 percent State with the biggest mid-year budget cut: New York with $2.1 billion. (This was a decline in the transfer of General Fund revenues to General Reserves.)

We’ve been conducting interviews for an alarmingly long time and the last 25 years of have been largely devoted to talking with state, county and city officials. Based exclusively on personal experience, we’ve developed a solid sense of the things that our interviewees can do that will optimize their chances of communicating their message well. Important note: We’re not talking about a lot of the things you might hear in media training; like how to pivot from the question asked to the one you want to answer. Speaking for ourselves, when someone is pivoting away from our questions, we’ll just ask the question again and again and again, and finally we’ll just go to another source. That’s not what the original  source really wants, because  he or she loses all control over the information being communicated. We’re not saying that pivoting is never  effective in interviews — particularly on television or radio, where there’s a limited amount of time to probe. We’re just saying that it can alienate well-trained reporters. Some of the following may seem manipulative. That’s because some of the following is manipulative. But much of it is really obvious — though frequently ignored. Take five or ten minutes, before the interview, to find out a little about the interviewer and the publication for which he or she is writing. This can be crucial if it turns out that you’re talking to someone with a strong political bias. Be very careful about the meaning of “off the record,” or “on background,” or “not for attribution.” People bandy these phrases around as though they are universally understood. But they’re not. If you want to make ground rules for the conversation, be explicit, like “I do not want to see my name attached to any of the quotes, but you can feel free to attribute them to a ‘California budget analyst,” or whatever. A corollary to number 2: Make any ground rules explicit at the beginning of interviews. Journalists will assume they have the right to attribute any quotes directly to you, unless they’re told otherwise. The reporter should probably clarify this from the beginning. But if that’s not the case, you should make sure it happens. At least once in the conversation compliment the press representative as in, “That was a terrific question.” People like to be praised. Just don’t shower the reporter with kind words, or it will seem less genuine. Don’t make any assumptions about the knowledge-level of the reporter, and assume you can put something over on him because he seems to know nothing. Smart interviewers don’t show how much they already know, preferring to draw out the interviewee to provide more details. Use stories in interviews. Real, live stories. Most articles are going to call out for anecdotes, and if you provide them yourself, it’ll help to get your points into the final article. If you don’t know something, say you don’t know it. And if you use numbers or dates that are really just guesses, tell the journalist to double check on them. Or double check yourself and get back by phone or e-mail. It makes us crazy when we fact-check a piece we’ve written and discover that the source has given us some data that turns out to be just distant memories of data. It makes us wonder if anything we’ve gotten from that particular source is reliable. We hope this helps. And we’d really like it if those of you who are reading this would make any additions to the list as a comment on this website.

As we’ve written many times before, local government auditors often face major obstacles in doing their work. Threats to their existence are common, which is not surprising since audits often result in a steady stream of criticism of people who are in power. The criticism may be constructive, but it is often annoying. No one likes to be criticized. Last week, we wrote about the significant victory experienced by the Portland auditor’s office in a May ballot measure that protected the office from resistance by city administrators and bolstered the office’s independence. Today, we have a potentially sadder story to tell. This evening, the Lawrence, KS, City Commission will have a working session to talk about next year’s budget. One of the most controversial items on the agenda is the city manager’s proposal to eliminate the city auditor’s office. The city manager proposed the same cut last year and it failed.  In an article in yesterday’s edition of the  Lawrence Journal-World, City Manager Tom Markus explained his position that an auditor’s office was not necessary to evaluate the city’s performance and that there were other ways to do this. He also made it clear that cutting the audit office would not jeopardize the annual financial audit, which is contracted out to a financial audit firm. The city auditor, who reports to the City Commission and not to the city manager or mayor, focuses on performance audits. Presumably, the city manager’s idea is that matters of performance could be assessed through individual contracts, as well. So, what’s wrong with cutting out the city audit office and relying on contractors instead? We’ve been writing about performance auditing for 25 years. Here’s our take: Contractors deal with individual problems on a one-time basis. They do not have the knowledge or sense of history that is present in an established auditor’s office. There is also the important question of independence. An independent city auditor has more ability to choose the topics to be audited, often in conjunction with a council or commission. A contractor is more likely to be given a specific topic to be covered – one likely chosen by the administration. Of great importance, a contractor would generally sign a contract with the executive branch and report to the administration. An independent auditor does not report directly to the executive branch officials it is responsible for auditing. If the city audit office survives, one proposal that is being floated in Lawrence is to create an audit committee that would help to bolster the office’s independence and make recommendations to the governing body. It could help ensure quality work from the auditor, consider budgetary questions and have input into the topics chosen for review. In May, David Givans, the president of the Association of Local Government Auditors (ALGA), sent a letter of support for the Lawrence auditor to the Mayor and City Commission and also supported the idea of an audit committee. It emphasized the importance of local auditor independence and the important role an auditor plays in improving government operations and strengthening public accountability. In a similar letter last year, ALGA went into more detail about the Lawrence auditor’s work. “From ALGA’s perspective, Lawrence’s Office of City Auditor is a high quality performance audit office headed by an experienced government auditor. We note that the Lawrence City Auditor successfully passed two rigorous external quality control reviews conducted by ALGA in 2011 and 2015 that demonstrated his office’s compliance with the demanding U.S. Comptroller General’s Government Auditing Standards. The office has also won ALGA’s Knighton Award for the high quality of its report on financial indicators. These accomplishments are notable, particularly because Lawrence has an audit office staffed by only one person.” The Lawrence auditor, Michael Eglinksi has been in his position since the auditor’s office was established in 2008. City manager Markus took on his role with the city in March of 2016.  Eglinski reports that the explanation he received from the city manager for the proposed cut was that there were tough decisions that had to be made. The city manager’s budget eliminates 11 positions in city government. Ten are already vacant. The auditor’s position is the only one of the 11 that’s filled, according to a Journal-World article in early May. “I went through the stress and hassle of this situation last year,” Eglinski wrote us. “Last year, the Council put the position back in the budget and added a very small property tax increase to cover it. When this was going on last year, I had several other local governments that contacted me and asked if I’d be interested in working for them. Last year, I said, “I’m committed to Lawrence and I really want to stay here and I think I’m doing good work for the organization…but, if things fall apart, I’ll be back in contact.”  This year, I’m saying, “I really want the situation to work out in Lawrence, but tell me more about the job.’” NOTE: See editorial from Lawrence Newspaper on June 14.

Last week, Southern Oregon University put out word that it was duped out of $1.9 million by an email payment scam involving a campus construction contract. This unfortunate story has become eerily familiar. An email comes to a public entity with an address that appears to be the same as a contractor on a construction project. It tells the entity about a new bank account in which to deposit the amount due. In this case, the university wired the money to the account, then discovered several days later that the actual contractor received nothing. The FBI is investigating. We’ve read about similar scams in The City of Albuquerque, New Mexico,  which lost about $400,000 in early spring and a Socorro, New Mexico, school, which lost $200,000. Tim Keller, the New Mexico auditor put out a warning to government agencies in early April.  Auditors in Ohio and Utah have issued similar alerts. The FBI started publishing warnings about the scam several years ago and has said that it is spreading. Its Portland office put out a press release in late May providing guidance on how to avoid being fooled. Scammers also target businesses, but public entities may be particularly vulnerable because of the easy availability of contracting information and the frequency of construction projects. News articles within the last year have chronicled  construction payment scams affecting Appalachian State University, El Paso, Texas, the community college system in New Hampshire, an Ohio school district and a couple of counties in Utah. Daniel Salazar, a reporter for The Wichita Eagle, nicely summed up the similarities in some of these cases in early January, following up on the loss of about $500,000 to Sedgwick County, Kansas in late 2016.

We’ve been doing a lot of work on data topics recently and just came across the following quote — one of our favorites about data use in the public sector. “Data by itself is useless . . . You can’t pour data on a broken bone and heal it. You can’t pour data on the street and fix it.  Data is only useful if it is applied for useful public benefit.” Todd Park, United States Chief Technology Officer, March 1, 2012 to August 28, 2014. From a speech on February 27, 2013, at a federal Geographic Information System (GIS) conference.

A constant worry for auditors’ offices is their own independence. The Association of Local Government Auditors (ALGA) deals with these concerns all the time. When performance auditors rile mayors and department heads with negative audits, retaliation can come in the form of budget cuts, slow action on personnel requests or even suggestions that auditor functions be eliminated. David Jones, Seattle City Auditor and chair of ALGA’s advocacy committee, says “We frequently find that local government auditors are under attack.” When Mary Hull Caballero became Portland City Auditor two and a half years ago, she immediately entered a situation in which she felt her office was embattled. The office was working on an audit of the budget office, which was simultaneously discussing her upcoming budget.  That created a very uncomfortable situation. Other tensions quickly materialized. The Portland City Auditor has an ombudsman function and the mayor at the time was displeased with its reports on city agencies.  He began to suggest that the ombudsman office should be eliminated. More problems developed over time. For example, the way the city charter was written, Caballero’s office depended on the city attorney for legal advice, but that office also gave advice to officials her office was investigating. At the end of last year, Caballero began pushing the idea of a ballot measure to protect auditor independence. The Portland auditor’s office had changed substantially over the years, adding a wide variety of new responsibilities. She felt the city charter had fallen behind and didn’t reflect the office that existed in the 21st Century. Although one council member initially appeared to oppose the idea of amending the city charter, the ballot measure was unanimously referred to voters. On May 16th, 86 percent of Portland voters approved the measure.  The amendment to the city charter now provides the auditor with more control over budgeting, human resources and contracting. The office will be getting a new staff attorney, who will operate independently of the City Attorney. The ombudsman office is now protected by being included in the charter. We talked with the City Auditor yesterday about the impact of the ballot measure.  Our edited conversation follows. B&G: We were startled by how overwhelmingly voters approved the ballot measure. You did not campaign aggressively for the measure and did not raise money to promote it. What messages do you take out of this victory? Caballero: I think it’s a reflection of how much the public appreciates independent assessments of government. It’s a reflection of the work that’s been done in this office over the years. I don’t think the measure was hurt when the President fired the FBI director [about a week before the vote]. That was a reminder of how much people appreciate and respect independent assessments. They need information they can rely on that is produced at a very high quality. B&G: What’s been the reaction to the vote? Caballero: Several other auditors have told me they are now looking at revising and updating their charters. Everybody is shocked by the result. It emboldens people. Our power doesn’t reside in city hall. It resides outside city hall. This is an example of how much more beloved we are by the public than by the people in our government. B&G: Portland’s current mayor is much friendlier toward the audit office and function than the mayor who was in office when your term started. Were the changes in charter still necessary? Caballero: I wanted the structure of the organization to protect the employees who work in the auditor’s office. I didn’t want them to have to rely on the strength of any one individual auditor or on having a mayor with an appreciation for accountability. Our current mayor has that. But my goal was to have a structure put in place so that they would be protected organizationally. It’s also important to note that the mere appearance of an auditor’s dependent relationship with the people they’re auditing is a problem. It hurts our credibility if people think we’re not calling the shots we need to be calling. B&G: The city council will still make decisions on your budget. Can you explain what the change to the city charter means, as it relates to your budget? Caballero: What we got in the charter change was an expression of the role that this office plays in city government. It has responsibilities separate and apart from the other elected officials and the budget should be based on the responsibilities of the auditor’s office. That seems squishy and aspirational, but it’s a sea change in the way things have been done. It has changed the way we talk about the budget and the way it will be presented to the council in the future. The council articulates policy priorities like paving streets or getting homeless people off the streets. My office should always be participating in budget cuts for financial reasons, but not for priority reasons. The accountability budget shouldn’t be cut because you want to pave more streets. [Note: More information on the ballot measure is available in a report on the charter amendment from the City Club of Portland. We also wrote a brief blog post in January about the Portland city council’s discussions of this issue before they decided to refer the measure to voters.]

There is an allure to policies that promote purchasing preferences for state or local companies. The idea is that buying local increases jobs and tax revenues. This issue has been playing out nationally, as well as in individual states. This legislative session, we’ve been following several bills in Maine that seek to increase strong preferences for local and U.S materials and Maine contractors. We were interested to see the Maine Association of General Contractors (AGC) oppose two bills, “An Act to Help Maine Manufacturing” and “An Act to Establish the Maine Buy America and Build Maine Act,” and point out numerous problems with a third, “An Act to Quantitatively Evaluate State Contracts.” The bills were under consideration by the Joint State and Local Government Committee. None of this legislation has been passed by the legislature. We talked with Matt Marks, the chief executive officer of the Maine AGC, to get a better understanding of why Maine contractors opposed bills that, at least on the surface, looked as if they’d provide more work for firms located in Maine. The gist of his answer boiled down to the following words: “It’s complicated.” Here are some of the reasons he gave us for his association’s position. If Maine insists on a strong preference for Maine contractors and materials, other states will take the same action. “We enjoy that we can do work competitively in other states,” he told us. “What happens when you give an advantage to in-state contracting is that other states do it, too.” In a letter to the Maine state and local government committee, he wrote: “Any provision that places Maine in a silo for goods or services will lead to legislation in other states that would impact Maine firms. ”It’s very difficult to determine the source of manufactured goods and insisting on Maine or U.S. products adds burden to contractors and cost to agencies. “Who is making the determination of what is considered a Maine good? Is it assembled here? Is it actually manufactured here?” It’s also tricky to determine what constitutes a Maine firm. What if it’s a subsidiary of a larger company that’s located in another state? One concern is that a strong local preference might discourage firms from growing or expanding. It might discourage purchases by larger or international companies that could benefit local business owners. It also could discourage larger out-of-state companies from doing business in Maine, not necessarily the smartest choice for a state that is worrying about a lack of population growth. Often out-of-state firms, which might be discouraged from bidding, provide work for Maine subcontractors and suppliers for jobs that are too complex to be handled exclusively by local firms. The provision of one bill, which identifies a Maine company by taxes paid in the state, limits the ability of Maine contractors to take jobs in other states. Many contractors work in multiple states and need to take jobs, and pay taxes, elsewhere when local work slows down, as it did during the recession. Implementing strong local preference bills is costly and difficult. “Our concern is with the practicality of this. Who is going to manage this? What’s the cost? The intent is good, but the implementation is the problem,” Marks told us.

One of the trickiest tasks in government is estimating the impact of new legislation. Case in point: In 2013, the office of then Pennsylvania Gov. Tom Corbett estimated that by permitting tavern gaming in Pennsylvania, the Commonwealth would generate $93.6 million annually in tax revenues. In November 2013, he signed the bill that legalized tavern gaming, including pull-tab games, daily drawings and charity raffles. Pennsylvania’s excellent Budget & Finance Committee was given the task of computing, on an annual basis, the impact this new form of gambling would have on the state’s lottery. The 2nd annual tavern gaming report was issued in May. Turns out the actual state tax revenue generated by tavern games in 2016 was $1.48 million, with only 56 licensees, compared to original estimates of 2,000.  According to the report, “Expensive up-front license fees, intrusive background checks, and an unfavorable tax scheme have been cited as some of the reasons for low participation among tavern owners.” The Budget & Finance Committee concluded that the small amount of tavern gaming that is actually occurring “did not have a material effect on lottery sales.”

We hear governments boasting all the time about their transparency websites and there is no question that the material that’s posted on the Internet is generally leagues better than in the past. But we have a gripe. There is one transparency topic that appears to be in deep decline – the recording of meeting minutes for work that  takes place in legislative committee meetings, advisory panels, commissions and task forces. Meeting minutes are a great source of information for journalists, advocacy groups, government officials and interested citizens. Yet they are staggeringly uninformative; the governmental equivalent of empty calories. Take a look at the agenda and draft minutes from a California Actuarial Advisory Panel meeting on March 10, 2017 Agenda item: Current Legislation Minutes report of the agenda item. “The panel discussed current legislation.” Agenda item : Recent Public Plan Comments by the Press or Others Minutes report: “The panel discussed recent public plan comments by the press or others.” Agenda item – Emerging Practice for Actuarial Assumptions Minutes report – “The panel discussed actuarial assumptions” If you learned anything truly useful from this, you’re a whole lot smarter than we are. The one silver lining in this example, is that at least the California Board created a semblance of meeting minutes. In many cases, minutes are posted months late or never posted at all.  We feel cheated by websites that promise to provide minutes, but don’t. Take the Legislative Reference Library in Texas. At the top of the web page there’s a tab for committees. Once you click onto the committee page, you’ll see that the clickable words “Committee minutes & related documents” is posted on the left.  Click through and you’ll see, as we did, that the most recent “Committee minutes & related documents” are from the 75th session of the legislature — two decades ago, in 1997. Then there’s the Delaware General Assembly.  At the top of the page on the legislative website, there’s a tab for the Senate. Click there and you see a menu that promises to provide “Meeting Minutes”.  For the 2017 session, there is only one set of minutes for a labor committee hearing that took place in February. But there were many more committee meetings than that. We counted up 48. We checked out the individual committee pages and didn’t find minutes there either.  (For the parallel House page, there are “no records found.”) In Delaware, as in many other states, there is no actual rule that meeting minutes must be maintained. But we still think it’s an important practice. Audio or video recordings don’t provide the same kind of summary information, as they occur in real time. Shouldn’t open meetings held by government bodies provide good written notes of what went on? Isn’t that a cornerstone of true transparency?

To put together the “Which states are the best” video, we read through each governor’s “state of the state” address. The quotes we used in the video are not the only ones in which the governors bragged that their states were number one. Here is a full list of the quotes we collected. (We’ve included the three governors who gave an annual address in 2017, but subsequently left office –  Alabama’s Gov. Robert Bentley, who resigned in early April as impeachment proceedings were just beginning;  South Carolina’s Nikki Haley, who left office shortly after her state of the state address to become U.S. ambassador to the United Nations, and Iowa’s Gov. Terry Branstad, who resigned on May 24 to become U.S. ambassador to China.) Please note that the quotes below were taken from transcripts and may sometimes differ slightly from the video versions. For links to this year’s governors’ state of the state addresses, we used the handy list with links provided by the National Association of State Budget Officers (NASBO). Alabama Gov. Robert Bentley, February 7, 2017 (resigned in early April) “This Administration worked so fast and so efficiently that of the 26 new governors elected nationwide in 2010, we reduced the size of our state’s bureaucracy at the third fastest pace.” “PreK is truly an Alabama success story, our 4 year olds are thriving, and we are ranked Number One in America”. Alaska Governor Bill Walker, January 18, 2017 “We are the largest state in the nation.” Arizona Gov. Doug Ducey, January 9, 2017 “If there’s one thing we can agree on, it’s this: Arizona is, without a doubt, the most beautiful state in the country.” Arkansas Gov. Asa Hutchinson, January 10, 2017 “We have moved Arkansas to number one in the nation in computer science education.” Colorado Gov. John Hickenlooper, January 12, 2017 “We’re the number one state for business and careers, we have the best workforce, and we’re one of the best states for innovation.” “More people attend cultural events in Colorado than any other state, more skiers and snowboarders choose Colorado; we are the best place for outdoor recreation" “Colorado has led the country on moving to cleaner energy sources.” California Gov. Jerry Brown, January 24, 2017 “This is California, the sixth most powerful economy in the world.” Connecticut Gov. Dannel Malloy, January 4, 2017 “Today, thanks to great teachers and principals, our students are some of the best readers in the country.” Florida Gov. Rick Scott, March 7, 2017 “Our job growth rate is growing more than twice as fast as the national rate." “Our economy is booming . . .Florida is on the verge of becoming the job creation capital of the world.” Georgia Gov. Nathan Deal, January 11, 2017 “For four consecutive years, Georgia has been named the best state for business.” Hawaii Gov. David Ige, January 23, 2017 “Our people are among the healthiest in the nation. Our unemployment rate is the third lowest in the country.” “We invested in infrastructure and attracted investment capital.  And guess what? ”We proceeded to create the most desired and successful travel destination in the world.” Illinois Gov. Bruce Rauner, January 25, 2017 “We have the best people and best location of any state in America.” Indiana Gov. Eric Holcomb, January 17, 2017 “ Indiana today stands as one of the top five states in the country for doing business" “Because we’ve created one of the best business climates in the country, we’ve become national leaders in business growth.” Iowa Gov. Terry Branstad, January 10, 2017 (left office May 24 to become U.S. ambassador to China) “We just set an all-time record for ethanol production, set a new record for biodiesel production by an additional 55 million gallons and lead the nation in percentage of electricity generated by wind.” Kansas Gov. Sam Brownback, January 10, 2017 “Our state has record population, record new businesses, record grain production, and record income.” “According to the most recent information from the federal Child and Family Services Review, our state’s foster care program was first in the nation in protecting foster care kids from abuse and second in the nation in safely maintaining children in their homes.” “By many measures Kansas is the envy of the world." “Set in the most productive part of this blessed nation, Kansans enjoy unparalleled sunsets and a quality of life unimaginable to most humans throughout history." “Our people, numbering now almost three million, lead the planet in agriculture, telecommunications, engineering, aerospace, precision manufacturing, animal health, food safety, and composite material innovation." “Kansans are among the most hard-working, well-educated, and charitable people on earth.” Maryland Gov. Larry Hogan, February 1, 2017 “I’m proud to report to you that Maryland has now moved into the top ten states in the nation for overall economic performance.” “Maryland is ranked as the fifth most innovative state in America." “We rank third in the country in entrepreneurial business growth." “Our state has the second lowest percentage of people living below the poverty rate in the nation, and Maryland has the highest median household income in the United States of America.” Massachusetts Gov. Charlie Baker, January 24, 2017 “In fact, for the second year in a row, Bloomberg named Massachusetts the #1 state for innovation.” “Thanks to the hard work of state & local officials, teachers and parents our students are #1 in the nation in both math and reading for the sixth straight year.” Michigan Gov. Rick Snyder, January 17, 2017 “To give you a fact you might be amazed by, but we should be really proud, our state has the highest net-bound inward migration of people with bachelor’s degrees of any state in the Great Lakes region.” “We are number one in the production of 20 different commodities” “Now here is a stat for you as you travel Michigan. I want you to look for those Michigan cows. Michigan cows are the second most productive in the nation after Colorado per cow.” “Michigan had the highest growth in incoming international visitors of any state in the nation from 2014 to 2015.” “Manufacturing. We are simply leading the nation. We have created over 116,000 manufacturing jobs since December 2010. We lead the nation. We are number one both in terms of number of manufacturing jobs and growth rate percentage.” “I’m proud to say we lead the nation in having more industrial designers than any other state. I’m proud to say we lead the nation in having more mechanical and industrial engineers than any other state in the nation” Mississippi Gov. Phil Bryant, January 17, 2017 “According to the U.S. Chamber Foundation, we are the No. 3 state in America for export growth and the second best state for overall cost of doing business.” “Last year, our fourth graders led the nation’s improvement in reading and math” “I am proud to say, we were the first state to submit a Workforce Innovation and Opportunity Act action plan to the U. S. Department of Labor.” Montana Gov. Steve Bullock, January 24, 2017 “We hold the largest coal reserves in the country, and Montana coal production has been higher under my Administration than any previous one in the last three decades. Though, change is on the horizon — driven by historically low natural gas prices, regulatory concerns and changing consumer demands." We also have some of the best wind and solar resources in the country.” Nevada Gov. Brian Sandoval, January 17, 2017 “We are home to the only lithium mine in the U.S.” “I am proud to report that Nevada is the first and only state to allow wagers on e-sports.” New Mexico Gov. Susana Martinez, January 17, 2017 “We are ranked second in the nation in growth for students taking AP exams.” New York Gov. Andrew Cuomo, January 9, 2017 “We have invested more in education than any other time in history and more than any other state in the nation.” Ohio Gov. John Kasich, April 4, 2017 “Last fall, a survey of CEOs named Ohio one of the ten best places to do business.  Last fall.  That’s 34 places higher than we ranked in 2010.” “Forbes ranked us the 11th best state for business.  That’s up from 38th.  So we went from 11th with Forbes, from 38th just five years ago.  And there have been other good ratings, like the one from middle market executives – that’s sort of middle-sized companies — that placed us first in growth in the country.” Rhode Island Gov. Gina Raimondo, January 17, 2017 “By the end of this year, Rhode Island is going to be the first state in America to offer computer science classes in every town and at every public school around the state. Not California. Not Massachusetts or New York. But Rhode Island. We’re first.” “We’re already the first and only state in America with an offshore wind farm.” South Dakota Gov. Dennis Daugaard, January 3, 2017 “Our National Guard ranks number one in the nation for attrition loss rate, number two in security compliance, number three for timeliness in soldier evaluations, and number five for personnel readiness and soldier management.” “We recently launched an online pardon application site – making South Dakota the first state in the nation with a completely online pardon application process.” Tennessee Gov. Bill Haslam, January 30, 2017 “Tennessee’s median household income has grown at the second fastest rate in the country.” “On education, there is no state in the U.S. that is demanding the spotlight like Tennessee. It’s worth repeating: with the incredible hard work of our teachers and students, Tennesseans are the fastest improving in the country in math, reading and as of this year, science.” “Tennesseans pay the lowest amount of tax as a percentage of their income of any of the 50 states.” Texas Gov. Greg Abbott,  January 31, 2017 “We are now second in the number of Fortune 500 companies. And with your help, we’ll soon be No. 1.” “Texas is No. 2 in the nation for women-owned businesses. Our goal is to make Texas No. 1.” “Texas now has more public high schools ranked in the top 100 than any other state. We have the fourth highest high school graduation rate in America. We are second among Hispanic and African-American students, and first among economically disadvantaged students. And the No. 1 public high school in America is in Dallas Independent School District.” Utah Gov. Gary Herbert, January 25, 2017 “I truly could spend all evening simply listing the national accolades that have come our way.” “In the most recent National Assessment of Educational Progress — known as the nation’s report card — Utah’s fourth graders ranked 8th in the nation in Math, 7th in Reading and 5th in Science. And Utah’s eighth graders ranked 8th in Math, 6th in Reading AND were ranked 1st in the nation in Science.” “Utah is now in the top 10 in the nation for electric vehicle adoption and number one for Compressed Natural Gas infrastructure.” Virginia Gov. Terry McAuliffe, January 11, 2017 We made Virginia safer by reforming our juvenile justice system, and posting the lowest adult recidivism rate in America.” “We took action to protect Virginia from the threat of climate change and sea-level rise, winning a $120 million federal resiliency grant for Norfolk and other communities in Hampton Roads. That is the largest grant given to any state in America.” “Our state workforce is the best in America.” Wisconsin Gov. Scott Walker, January 10, 2017 “The percentage of people working in Wisconsin is one of the highest of any state in the country.” “We rank as one of the best states in the nation for health insurance coverage.” “We just started including everyone in the ACT tests and Wisconsin is one of the best states in the country in that category. Students here also have some of the best graduation rates in the country.” “As mentioned, more people are working than ever before in our state. Our schools continue to be some of the best in the country. The University of Wisconsin just moved up in another ranking. Chief Executive Magazine raised Wisconsin up again on the best places to do business – we’re up 30 states from 2010. Our improvement in the tax climate is one of the best in the nation. The economic impact of tourism went up 30% since we took office. Health care systems in our state are ranked in the top three in the country. And our farmers continue to produce some of the best food on the planet – heck, we just won the gold medal for the best cheese in the world.” Wyoming Gov. Matt Mead, January 11, 2017 “In 2016, Wyoming has ranked the best state to start a business, the best state to make a living, and the best state to retire.” “Wyoming continues to be ranked No. 1 among states by the Tax Foundation, for having the most business friendly tax climate.”

Many city, county and state departments collect cash, in various forms. There are fees for licenses, cash collected during events, and money exchanged for the sale of surplus property. We see poor cash-handling practices crop up in audits all the time. The San Francisco’s City Services auditor has focused on this issue over the last few years. It has faulted departments for storing cash or checks in unlocked drawers, for not checking to see if cash collected matched records of goods sold, or for not depositing cash in a timely way. The list goes on and on. Last week, the auditor’s office published a cash-handling bulletin summarizing the problems. We thought the following chart of cash-handling weaknesses and risks would be helpful to many other governments as well. The bulletin also has a very useful checklist. It asks a series of questions to help departments identify weaknesses. A combined report of six audits, earlier this year, describes specific cash-handling problems in greater detail.

Last week, the New York City Independent Budget Office reported on the large number of young men who are incarcerated on Rikers Island, the city’s jail complex, because they are awaiting trial and can’t make bail. The May 16 bail report came to the City Council in a 4-page letter addressed to Rory Lancman, the chair of the council’s committee on Courts & Legal Services. The statistics reported were certainly alarming. Of the city’s 63,758 admitted to the city’s jails in 2016, 78 percent were pre-trial detainees. On an average day, 7,633 individuals were in jail awaiting trial and about 52 percent of those individuals were in jail because they couldn’t post bail, with a median bail set at $5,000. This is obviously not a good thing, and Rikers is far from the only jail suffering from this backlog of cases. But we noticed that there was a lack of  comparative statistics in this alarming document. And although the IBO report provided a link to a similar report in 2011, it didn’t mention that between 2010 and 2016, the number of people admitted to the city’s jails had dropped by a third – from 95,000 seven years ago to 63,758 last year. Looking at the average daily population of pre-trial detainees who could not make bail, there were 4,772 in 2010 and 3,931 in 2016 – 18 percent fewer. The median bail set in 2010 was twice as high — $10,000. According to the city’s Department of Correction, the number of people detained on bail of $2000 or less has dropped by 36 percent since early 2014. There are new strategies to make it easier to pay bail and diversion programs to reduce the number of low risk people who enter jails. Why didn’t the IBO mention the improvement? We talked a bit with Doug Turetsky, chief of staff and communications director there. He agreed that arrests are down in the city and mentioned the efforts underway to decriminalize misdemeanors, as well as the ongoing effort to move lower-risk pre-trial detainees out of jail.  The report, he says, “was a snapshot of 2016. That’s what we were asked to do. That was what was agreed to.” The statistics still show “a substantial share of people who are sitting in jail are sitting there because they can’t make bail,” he says. We agree that this is a troubling. But we’d still like to see more acknowledgement of the progress that’s been made.