Search Results

Several years ago – right before the start of the pandemic -- our book, The Promises and Pitfalls of Performance-Informed Management was published by Rowman & Littlefield. This past weekend, we had a somewhat jarring reminder of the pitfall aspect of that title in a recently-released City of Austin performance audit: The audit, titled Strategic Direction 2023: Progress on Economic Opportunity and Affordability Outcome, takes issue with the timeliness and quality of the performance measures used to measure strategic outcomes in the Texas state capital. The subhead of the audit, was sobering: “Issues With Performance Measures, Monitoring and Delays Affected the City’s Ability to Measure and Report Progress Towards a Key Strategic Outcome.” While the audit noted that its exploration of the use of performance measurement only concerned one of six strategic objectives, it noted that the conclusions drawn likely applied “to the other five outcome areas as well.” Here are a handful of problems cited that underscore fairly typical challenges with state and local government performance measurement: · There were issues with the timeliness of reported data. In fact, only 23% of measures covered the most recently completed fiscal year. The audit labeled 46% of data as “old data.” · While the goal was to measure equity, too few measures examined progress with an equity lens. While the five-year strategic planning document stated that “Race is the primary predictor of outcomes,” only 23% of economic opportunity/affordability measures could be disaggregated by race/ ethnicity, · When surveyed by the auditor, department teams raised concerns about data quality. According to the audit, of 24 comments received, “the majority (67%) expressed negative opinions about the data quality of performance measures.” Problems focused on data sources that were difficult to update in a timely way; dependence on unreliable third-party data, and a lack of connection between the measures used and the work of their own departments. · The performance measures lacked targets. “The lack of targets makes it very difficult to determine where the City has been successful or where more effort is needed,” auditors wrote. · Over half the measures focused on “community indicators”, in which results depend on a wide variety of external factors with potential results difficult to connect with government funding, management or policy choices. There’s a clear silver lining around the storm clouds that these problems represent. Left unexamined and unaddressed, the “promises” part of our book’s title can be little more than the clichéd “best laid plans,” that often go awry. In fact, we want to give credit to the City of Austin Audit Office for following up on how the performance measurement effort is working. The problems cited just go to echo a message that we have delivered over time (and in our book) that performance measurement is hard to do, and that it heavily depends on timely and high-quality data. This kind of audit should not discourage the effort, which is very necessary, but help to improve performance measurement in this and other cities, counties and states. #StateandLocalGovernmentManagement #StateandLocalPerformanceAudit #StateandLocalGovernmentPerformanceMeasurement #StateandLocalPerformanceManagement #StateandLocalPerformance #StateandLocalGovernmentData #PublicSectorDataQuality #CityofAustin #AustinAuditOffice #PerformanceMeasurementPitfalls #PerformanceMeasurementChallenges #DataTimeliness #DataQuality #EconomicOpportunity #StateandLocalStrategicOutcomes #ThirdPartyDataReliability #PerformanceMeasurementTargets #PromisesandPitfallsofPerformanceInformedManagement #BarrettandGreene #CityPerformanceMeasurement #CommunityIndicators

Episode Two: Inappropriate Computer Access - We don’t recall any performance auditors complaining to us about the frustration they must feel when they find similar operational shortcomings repeated year after year. But we can only speculate that even the most patient and understanding of auditors must want to tear their hair out when they see that governmental agencies seem condemned to repeat past problems despite the performance auditors’ good work. Hence the Sisyphus title of this occasional series, which stems from our feeling that performance auditors have a lot in common with the mythological figure who was condemned to arduously roll a rock up a hill, only to watch it slide down again and start over. In this, the second episode of this series, we’re looking at two related problems that come up over and over again: Employees who leave their jobs but retain access to sensitive government technology systems. Access to sensitive data that is granted to too many employees leaving the possibility of potentially compromised security or privacy. Consider the December 2022 audit of the Connecticut Department of Emergency Services and Public Protection, which pointed out that the department did not “promptly or properly deactivate 17 terminated employees’ access” to the state’s criminal justice and accounting systems. For the 10 former employees who had criminal justice access, the failure to deactivate also permitted continued use of the National Crime Information Center and the International Justice and Public Safety Information Sharing Network. For those individuals, the cutoff only occurred between a year and 25 months after they left government, according to the audit. A similar problem was found in three prior Connecticut Department of Emergency Services audits which occurred in 2012 through 2019. There’s no reason to think that any of the former employees had ill intent, but still “unauthorized access to a protected information system can jeopardize the security of the information in the system,” auditors wrote, noting that untimely deactivation stemmed from a lack of communication between human resources and individuals responsible for providing tech access. The agency agreed with the findings and has been improving its internal controls, while also putting in place weekly reports to provide improved monitoring. That might solve one agency’s specific difficulty, but our experience gives us little doubt that the same issue will crop up elsewhere. That same month, a Department of Law Enforcement operational audit in Florida also found that user access privileges “weren’t always removed upon separation.” One of the causes cited was “untimely notice of employee separation.” A similar problem was also found there in 2020. In both cases, auditors also cited “inappropriate access” among employees who continued to work for the state, but whose jobs didn’t require the use of the technology. The 2022 audit noted that there was an unmet need for periodic review of who can log into potentially sensitive computer systems. There’s more. In November 2022, two other audits came out that raised similar issues; one in Hillsborough County, Florida and the other in San Antonio, Texas. In November 2022, in an audit titled “ServTracker System Access Controls” auditors in the county reported that “not all user accounts belonging to separated employees or contractors were disabled in a timely manner,” while the November audit of the San Antonio Fire Department Arson Bureau found that user access for fire department arson investigative software was “not routinely terminated” when fire department employees left the bureau. It also found that “employee access to the evidence tracking software was not always appropriate,” and recommended more diligent periodic reviews. Even when problems like this persist in multiple places, journalists and other government observers don’t tend to take note. We do. Our hope is that columns like this one can help to draw management attention to audit findings that are depressingly common. And we invite our readers to make recommendations for future episodes of the Sisyphus files (we love that name!) #Featured #BarrettandGreene #StateandLocalPerformanceAudit #StateandLocalPerformanceManagement #PerformanceAudit #StateandLocalHumanResources #StateandLocalGovernmentPerformance #StateandLocalGovernmentAccountability #PublicSectorDataAnalysis #Cybersecurity #StateandLocalPolicyImplementation #StateEmployeeComputerAccess #CityEmployeeComputerAccess #CountyEmployeeComputerAccess #UnprotectedComputerAccess #SisyphusFiles #RepeatAuditFindings #GovernmentOversight #BarrettandGreeneSpecialFeature #BarrettandGreeneSisyphusSeries #ConnecticutAudit #SanAntonioAudit. #HillsboroughCountyAudit #FloridaAuditorGeneral #KatherineBarrettandRichardGreene #ComputerAccessAuditFindings #OperationalAudit #LaxGovernmentPrivacyProtections

While we generally write about the use of performance measurements in the realm of state and local government, lessons can be learned about their use – and their potential flaws – from a wide variety of sources, including major league baseball. Over the last twenty years or so, baseball managers have become increasingly convinced that, rather than trust their instincts, they should rely on reams of data that are supposed to help them to improve fielding and hitting in a variety of ways. The practice was jettisoned into public’s awareness when Author Michael Lewis wrote his bestselling book “Moneyball: The Art of Winning an Unfair Game.” It showed how the Oakland Athletics had used data to put together a strong team, even though it had one of the smallest payrolls in the sport at the time. Baseball, which has long been a sport full of statistics, seemed like the ideal environment for such a movement just as government (which also thrives on data) is a place where metrics can be powerful tools. But beyond the common sense of the issue, there are some, in both government and baseball, who feel this reliance can have some downsides, as a recent article in the New York Times pointed out when it quoted record-holding slugger Aaron Judge of the New York Yankees. The Times reported that “he believes data can ultimately be manipulated to have whatever desired outcome a party is looking for.” Clearly most data aren’t being misused in this way, but Judge makes a good cautionary point for both baseball and government. The Yankee was quoted saying, “We get a lot of numbers, but I think we might be looking at the wrong ones and maybe should value some other ones that some people might see as having no value.” Another good point for both baseball and government. Some players told the Times that the over-reliance on data had the perverse effect of removing reliance on instincts that could be beneficial to a player’s game. Reported the newspaper, one player indicated that “there were numerous voices in his ear earlier in the season and it messed with his swing because of all the tinkering the numbers were suggesting.” Here, too, we can see how government managers might learn something from the comments of these professional athletes. When government employees are inundated with data to rule the way they do their jobs, there can easily be a tendency to believe that their managers already know all the answers, and there’s little need to consider their own instincts. That kind of attitude can rob an organization of the insights that employees might have – beyond those reasons that are based in the analytics. And that’s not a good thing.

Out of the 36 gubernatorial elections last November, 26 resulted in the return of an incumbent while only one, Nevada’s Steve Sisolak, lost. That left nine new governors taking office, not an earthshaking number, but enough to make us curious about the demographic shifts in the new cadre. Our efforts turned up some interesting facts that we wanted to share. Perhaps most intriguing, the new group is dramatically younger than the governors they’re replacing. This is probably inevitable for all elections, as older officials are term-limited or choose not to run for re-election and are often replaced by younger ones. But the change has been somewhat more extreme among the nine new governors who were elected in November than we would have anticipated based on past experience. In fact, the average ate of newly elected leaders in Arkansas, Arizona, Hawaii, Maryland, Massachusetts, Nebraska, Nevada, Oregon and Pennsylvania is 52, as of today’s date, as opposed to 65 for those who are leaving office. To put this another way, only one of the new governors would qualify for Medicare, compared to 5 of the 8 who are now departing. Four of the nine new governors were born in the 1970s and one in the 1980s. The youngest -- and the only one of the 50 to be born in the 1980s -- is Sarah Huckabee Sanders, who takes over the top spot in Arkansas from 72-year-old Asa Hutchinson. Sanders, who was President Donald Trump's press secretary from 2017 to 2019, is 40 years old. The second youngest governor in 2023 will be Wes Moore, age 44, who will take over the top spot in Maryland from 66-year-old Larry Hogan on January 18. As a result, the generational shift is dramatic. All of the nine governors being replaced are Baby Boomers (born 1946-1964). But six of the new ones belong to Gen X (born 1965-1980) and one is a millennial (1981-1996) There’s more. The new governors represent a more diverse group than their predecessors. four of the nine are women, compared with one of the outgoing state leaders. Two of the four – Maura Healey of Massachusetts and Tina Kotek of Oregon lead openly lesbian lifestyles. Wes Moore will become the first Black governor of Maryland and the third ever elected in the United States. (The other two were from Virginia and Massachusetts). Of the nine newly elected governors, two are doctors– Josh Green of Hawaii, and Nebraska’s Jim Pillen (who is a Doctor of Veterinary Medicine). And two are lawyers, Joshua Shapiro of Pennsylvania, and Massachusetts’s Maura Healey, both of whom were their states’ attorneys general prior to becoming governors. Four of the others have master’s degrees, with one in crisis management (Nevada's Joe Lombardo), one in social work (Arizona’s Katie Hobbs), one in international relations (Wes Moore), and one in international relations and comparative religions (Maura Healey). Sarah Sanders has a Bachelor of Arts degree, with a major in political science. For the record, the nine new governors, who will soon be added to our website feature “Guide to the Govs” after they’ve all been inaugurated on January 18, are: Arizona: Katie Hobbs (D), replacing Doug Ducey (R) Arkansas: Sarah Huckabee Sanders (R), replacing Asa Hutchinson (R) Hawaii: Josh Green (D), replacing David Ige (D) Maryland: Wes Moore (D), replacing Larry Hogan (R) Massachusetts: Maura Healey (D), replacing Charlie Baker (R) Nebraska: Jim Pillen (R), replacing Pete Ricketts (R) Nevada: Joe Lombardo (R), replacing Steve Sisolak (D) Oregon: Tina Kotek (D), replacing Kate Brown (D) Pennsylvania: Joshua Shapiro (D), replacing Tom Wolf (D) NOTE: This column has been revised to include Arkansas Governor Sanders, who was inadvertently left out when it was first published on January 5. #Featured #BarrettandGreene #NewGovernors #Governors #StateandLocalGovernment #StateandLocalGovernmentManagement #StateGovernmentCulture #PublicSectorLeadership #StateLeadership #GenerationalChange #FutureofGovernmentJobs #WesMoore #MauraHealey #TinaKotek #JoshuaShapiro #JoshGreen #JoeLombardo #KatieHobbs #JimPillen #StateofArizona #StateofMaryland #StateofMassachusetts #StateofNebraska #StateofNevada #StateofOregon #StateofPennsylvania #NewStateAdministrations #GubernatorialDiversity

In the June issue of Government Finance Review, we have a column titled “Are Tax Incentives Good for Cities and States?” Though the headline, which we wrote, leaves the question pretty much open, readers of the piece will discover that based on a number of interviews, we discovered that the answer is pretty much “no.” To sum up, in the words of Shayne Kavanagh, senior manager of research at GFOA’s Research and Consulting Center, “There is compelling evidence that these things are often not effective.” With that in mind, we were intrigued to read an excellent report that came out last week from the Citizen’s Budget Commission, a nonprofit civic organization that focuses on the finance and services of New York City and New York state government. It was titled 11 Billion Reasons to Rethink New York’s Increasing Economic Development Spending. The 11 billion in the title referred to the total dollars spent on economic development in New York’s state and local governments – a number that the report indicates “likely will increase more in the coming years, potentially exceeding $13 billion in 2025.” Though the report focuses on New York, we know that its basic conclusion is true in many other places: There’s insufficient evidence that this spending is effective. As the report states, “Despite improved disclosure about individual projects, state and local economic development spending continues to increase without sufficient evidence that these programs cost-effectively create jobs or are more beneficial than alternative uses of the funds.” The report calls for data-driven evaluations about the effectiveness of incentives and grant programs and we agree entirely. But there may well be political reasons why such research isn’t done, not the least of which is that elected officials can get lots of mileage out of announcing major economic development initiatives, and they may not want to know exactly how well they’ve panned out. As we wrote in Government Finance Review, “It’s difficult for elected officials to take credit for many of the things that genuinely attract new businesses, like good education systems, a willing workforce, local amenities like golf courses and, naturally the weather. Even the most hyperbolically inclined politician in the world can’t take credit for blue skies and a temperate climate.” It feels like this may be a good time for greater demand for accountability when it comes to economic development spending. Increasingly, governments – both in legislative and executive branches – are demanding evidence that new programs work before they fund them. Indeed, the federal government has been pushing for evidence. According to a White House statement, “Since its first week in office, the Biden-Harris Administration has prioritized evidence-based decisions rooted in the best available science and data.” Getting back to the CBC report, three of its recommendations for New York State and its localities are that they “Rigorously evaluate existing incentives and programs to determine their effectiveness; Narrow, shrink, or eliminate programs that are not proven effective; and Adopt performance-based incentives whenever possible.” Sure make sense to us. #StateandLocalGovernment #StateandLocalManagement #StateanLocalGovernmentData #Data #GovernmentFinanceOfficersAssociation #EconomicDevelopment #CBC #NewYorkState #NewYorkCity

by Dawa Hitch, Communication and Public Engagement Director, Asheville, North Carolina. In historically disenfranchised communities, trust in government is low and there needs to be an emphasis on empowered decision making. Historically that has been the case in Asheville, and so when a former City Manager said to me “we’ve got to do something to improve community trust,” about eight years ago, I responded with a resounding “yes.” But then came the critical question: How? This is the story of our journey, and though we haven’t completely reached the desired destination, we’ve worked long and hard on the road map to get there. This is our story. We began with an internal team to explore the meaning of that precious and fragile commodity: trust. We acknowledged trust in our government had been eroded through a history of systemic racism and broken promises. From there it became clear that building and sustaining trust takes both intention and connection. We agreed there are many practices and actions that contribute to trust and we agreed that actions speak louder than words. Figuring out where to start felt overwhelming at times, but we discussed actions the organization could take to build and sustain community trust. This process helped us to hone in on communication and public engagement. Three critical components of trust were identified through the team’s discussions and subsequent conversations with community members. Improving community trust would require applying these practices: ​ intention listening for understanding commitment. ​ In our organization the actions would be applied through: ​ Improving internal communication Communicating through multiple channels Supporting best practices in community engagement across the organization ​ The team jumped into the work of improving internal communication and communicating through multiple channels. Simultaneously we worked to integrate a standard for engagement across all departments through the use of communication and engagement plans for all projects and initiatives. ​ Utilizing the resources of the International Association of Public Participation, much time was spent communicating how input for each project would be used in decision-making, who was responsible for making the final decision and then reporting the final decision back to those who had initially engaged with us. ​ Then, in 2020, in the middle of a global pandemic, we were faced with the community outrage surrounding the death of another Black man, George Floyd, dying at the hands of law enforcement. That tragic event served as a further catalyst for change in Asheville and it was clear that engagement with the public needed to be improved – and quickly. One of the channels created to affect change was a public engagement effort to Reimagine Public Safety. ​ Staff worked hard to make sure engagement with our residents about public safety was inclusive. Further, we needed to develop clear expectations for how the input would be used. Since it was probable there would be budget implications, we knew we couldn’t promise all ideas would be acted upon. We made it clear to all concerned that the input we’d be receiving would be used to guide operational changes and budget priorities. ​ Input poured in through an online survey and focus groups. Survey questions were answered, and comments were submitted. Then, something happened in a focus group conversation that remains an inspiration. A young man who is African American made this point: If the government wants people to provide input that will then only be considered and possibly integrated into final decisions, the government must first find ways to commit to and then implement ideas from people who have been historically disenfranchised. ​ Empowered decision making isn’t an easy task in a representative democracy. There are many needs and often not enough resources. However, with intention and deep listening there are opportunities to embrace. Whether it's a Neighborhood Matching Grants program, building a database that memorializes neighborhood needs and finding ways to address them, or paying community members to design and lead input sessions with demographic groups with whom they identify, there are ways to give people the chance to have the final say. ​ We have to push ourselves further. If improved trust in government is on the other end, I’d say it’s worth it. ​ The contents of this guest column reflect those of the author and not necessarily those of Barrett and Greene, Inc. #StateandLocalGovernmentManagement #TrustinGovernment #CommunityEngagement #CommunityOutrach #StateandLocalGovernmentCommunications #InternationalAssociationofPublicParticipation #ReimaginingPublicSafety #StateandLocalGovernmentBudgeting #PublicSafetyBudgetingPriorities #AshvilleNC #DawaHitch #CitizenInput

by Craig S Maher, Director School of Public Administration, University of Nebraska, Omaha and co-editor of the Public Finance Journal There’s a great deal of valuable academic work being churned out every day in order to help practitioners deal with real world questions. How can we help governments be more efficient and effective? What are the implications of policy changes? How can we better insulate government programs from economic shocks? What is a sound fiscal policy? What are the impacts of certain taxes and the combination of tax systems? What does a fiscally healthy state and local government look like? The list goes on and on ​ The primary organization that supports budgeting and finance professionals is the Government Finance Officers Association. GFOA’s mission is, “... advancing excellence in government finances.” A quick glance at GFOA’s website reveals that budgeting and finance professionals are interested in many of the same topics researched by scholars. Much of the GFOA training focuses on best practices, financial reporting, intergovernmental relations, etc. I serve on a regional GFOA board – the Great Plains GFOA – and can attest that these same issues are at the core of our annual conferences. ​ I attend most of the academic conferences geared toward public budgeting and finance (including Association for Budgeting and Financial Management, and the budgeting and finance section of the World Social Science Association). I also frequently attend professional development conferences such as GFOA and ICMA. It is clear that despite these shared interests – academics are always looking for research ideas and professionals are always interested in best practices – there remains a divide between academic research and professional needs. ​ One of the barriers to connecting professional research needs and academic research interests is the approach many academics traditionally take to publishing their research. Dr. Phil Joyce, the well-known professor of public finance at the University of Maryland, wrote a great piece explaining this phenomenon a few years back in Governing magazine. In essence, he explained, for academics to succeed they need to publish in top-tiered academic journals. Publishing quite often requires building large historical datasets and conducting complicated statistical data analysis. Furthermore, the publication process – writing, submitting to journal, waiting for reviews, responding to reviewers’ comments (if it gets that far), revising the manuscript, and publishing – can take well over a year. Then once published, only those who pay a subscription fee have access to most professional journals. ​ Meanwhile, state and local government officials typically have immediate needs and limited turn-around time and aren’t well served when potentially helpful ideas are stewing in the broth of a protracted process. ​ Enter the Public Finance Journal (PF). This new journal is the brainchild of the GFOA and several prominent public budgeting and finance scholars (see the journal’s editorial team). Unique features of the journal include free access, shorter article length, focus on current public budgeting and finance issues in the U.S. and Canada and the inclusion of reviewers, and board members, who serve in state and local government. ​ PF journal is a biannual journal publishing peer-reviewed research that examines and analyzes contemporary issues in budgeting and finance and explores the applicability of solution sets. The journal is published by the Government Finance Officers Association and serves as a forum for discussion on significant issues related to the advancement of our scientific understanding. Articles go through a rigorous peer-review process and are chosen for publication based on their originality, importance, interdisciplinary interest, timeliness, and accessibility. As a journal focused on connecting science with the practice in public budgeting and finance, all manuscripts must connect the study with the needs and interests of both the scientific and practitioner communities for the field. ​ The mission of Public Finance Journal is to serve those engaged in public budgeting and finance through the publication of significant advances in the science of the discipline that conveys both theoretical importance and timely application. Aims & Objectives ​ The journal has four guiding principles. These are: Public Finance Journal is an open-access journal that is committed to the community of practice; All articles published adhere to the standards of peer review and the ethical standards of the Committee on Publication Ethics; We encourage posting open data and methods for all published articles to our Dataverse; and, Both replications and manuscripts with null results are important to the scientific process. If you are interested in writing for PF, or want to serve as a reviewer, please reach out to me at . csmaher@unomaha.edu. ​ The contents of this guest column reflect those of the author and not necessarily those of Barrett and Greene, Inc #StateandLocalGovernmentManagement #StateandLocalGovernmentBudgeting #StateandLocalGovernmentPerformance #AcademicPolicyImpact #AcademicPractitionerConnection #AcademicPractitionerCollaboration #PublicFinanceJournal #OpenAccessforAcademicResearch #GovernmentFinanceOfficersAssociation #PhilJoyce #CraigSMaher #PublicFinance

Leaders in state and local governments persistently claim that they want to be more transparent, and we believe that this is a sincere goal. That’s why we’re frustrated about a troubling phenomenon that we encounter with increasing frequency; their phone numbers and e-mail addresses – and sometimes even their names -- are no place to be found. The following is going to be a combination of an observation and a rant. When we begin work on a column or a report, we start to seek out the people in positions that we think will make them well equipped to answer our questions and help us get things right. If we’re smart, our first step is to write a simple note asking for time to chat. Or, alternatively, we make a phone call (and leave a message, as nobody seems to answer their phones). But we can’t do either one without an e-mail address or a phone number. You’d think that this would be basic information, provided on a government’s website, but often it’s not. It’s our guess that in these troublesome times that’s because people are concerned about security. But if security gets in the way of transparency, that’s an unfortunate tradeoff. The next step for us is to work through a public information officer. But, with growing frequency, their contact information isn’t available either. We don’t get this at all, because if a public information officer can’t be reached by the public (including the press) then they’re not really able to do the jobs they’re paid for. More and more, when we can’t find a direct route to communications offices, we’re guided to an online auto messaging system. That technology could work well, but only if someone actually responds to the message in a reasonably timely way. But at a rough estimate at least half the time, leaving an online message in this way is as effective as trying to communicate through smoke signals. This scenario in which we leave the message but don’t get response to the message reminds us of a scene in Seinfeld, in which Jerry is trying to pick up a reserved rental car, only to discover that it’s not available. He says, “the car should be there, that’s why you have the reservation.” When the clerk rebuffs his complaints saying that she knows why they have the reservations, he snidely responds that he doesn’t think she does, saying” You know how to take the reservation, you just don’t know how to hold the reservation and that’s really the most important part of the reservation.” Fortunately for us, we have contacts of some sort in many of the states and localities about which we’re writing, and we can turn to them to help. But it’s our sense that many others don’t have that advantage and so wind up giving up altogether and simply quote directly from the website without being able to get background from a source who can explain things. The result: People in the public sector often complain that researchers and writers don’t get things right. That may be true, but we think that wouldn’t be the case as frequently if there was a human being who could be reached. #StateandLocalGovernment #Transparency #StateandLocalManagement #StateandLocalGovernmentManagement #StateandLocalGovernmentHumanResources #Seinfeld #StateandLocalTransparencyChallenge #PublicSectorTransparencyChallenge #TheTransparencySecurityTradeoff #ContactInformationSecrecy #DisappearingStateandLocalContactInformation #StateandLocalGovernmentTransparency

by Dr. Carolyn Bourdeaux, Senior Visiting Scholar, University of Georgia; Board Member of the Concord Coalition; Former Member of Congress from Georgia’s 7th District ​ ​ Now that we’ve come through the debt ceiling drama, most of us who want to see more fiscal responsibility at the federal level can agree that we got to a reasonable result, but the process was - to put it mildly - a problem. ​ We cannot use the full faith and credit of the nation and the economic health of the global economy as a bargaining chip to restore fiscal responsibility. There has to be a better way. In fact, many of us who study state budgeting annually observe budget processes that lead to (largely) fiscally responsible decision-making and do not require high stakes hostage taking to get there. ​ As someone who has worked at both the state and federal level, the differences are striking and suggest that some serious thought should be given to translating some valuable lessons of state budget processes and policies to the federal level. ​ The most obvious place to begin is that almost all states have some sort of statutory or constitutional balanced budget requirement. The objection to this at the national level is that the federal government may need to run deficits to reboot the economy or respond to emergencies – but we are now running nearly $2 trillion-dollar annual deficits when times are good. And without any procedural restraint to invoke, it is very hard for policymakers to temper expectations and build a culture of fiscal discipline consistently over time. ​ While balanced budget requirements at the state level are often perceived as strictly binding, state budgeters can deploy any number of tricks to circumvent these requirements. States can short their pension obligations, issue debt to cover operating expenses, create off-the-books entities to issue debt, pass the buck to local governments, and game the revenue estimate - just to name a few gimmicks. Yet, by and large, year after year, most states pass fiscally constrained budgets. Balanced budget requirements are as much about perception than about a hard and fast rule. ​ The balanced budget expectations also set the groundwork for everything that follows. If everyone believes you have to have a balanced budget on an annual basis, then the revenue estimates at the beginning of the year need to be conservative and binding so that the state doesn’t run over budget by the end of the year. Cuts in taxes or increases in spending have much more tangible consequences because there are clear and transparent tradeoffs experienced within a single fiscal year – the fiscal pain typically cannot be pushed to amorphous future years as so often happens at the federal level. ​ The state experience suggests that balanced budget requirements don’t have to be airtight. They can accommodate emergencies, but they need to be credible enough to create an expectation around fiscal restraint that a broad swath of the population accepts. ​ During the Great Recession, I was director of Georgia’s Senate Budget and Evaluation Office. The legislators I worked with, most of whom were Republicans, hated making budget cuts and certainly hated increasing taxes to balance the budget. Many feared that balancing the budget would end their political careers, but they grit their teeth and did it, cutting billions out of a $20 billion state budget, eliminating programs, raising taxes, and imposing a two-week furlough on all state employees. ​ The budgets passed by broad and bipartisan majorities, and despite their fears, no one that I’m aware of ever paid an electoral penalty for these actions. A legislator could stand in front of constituents and show a graph of the revenue shortfall and explain that the budget had to be cut and taxes raised because the state was required to balance its budget. Interest groups and advocacy organizations certainly resisted the cuts or tax increases, but the debate centered more around the fairness of shared fiscal pain rather than whether cuts or tax increases should be made at all. ​ At the federal level, this dialogue has completely broken down. Money is no object. And while I applaud the effort to impose spending caps, legislators are going to find it very hard to enforce them when it comes to the actual appropriations and revenue bills. You can’t ask one group to accept fiscal pain if it is not perceived as necessary in the first place – after all the federal government can run deficits. It has before, why not again? A budget process needs to accommodate the very human dimension of cutback budgeting, which is that it is very hard to tell someone that they are going to have to sustain a loss. And how people perceive a loss is heavily influenced by context. ​ Public sector budgeting, state or federal, does not resemble the textbook “rational allocation of priorities.” Fiscal decisions are deeply affected by an interaction of political forces with culture, community expectations, and common human cognitive errors such as loss aversion. Fiscal discipline is as much about the habits of the heart and mind than about any process or rule. However, the process and rules do matter and inform the presentation of tradeoffs as well as help establish the expectations around a budget. ​ With deficits projected to average roughly $2 trillion over the next 10 years, balancing the federal budget in a single year or even over ten years is likely more than our political system or even economy can sustain. One way or another, however, the federal government needs a comprehensive statutory change that sets realistic, enforceable deficit and debt targets. We need to radically upend the expectations around the budget so that the effort to restore fiscal restraint becomes a systemic part of the debate year after year – as opposed to requiring one-off moments of heroic political sacrifice or crazy political maneuvers such as hijacking the national debt limit. And while it is not entirely clear what form this should take; it’s time to start the debate. ​ The contents of this guest column reflect those of the author and not necessarily those of Barrett and Greene, Inc. #StateandLocalGovernmentBudgeting #StateandLocalGovernmentManagement #StateBalancedBudgets #IntergovernmentalRelations #StateBalancedBudgetRequirements #FederalDeficitSolutions #StateFiscalDiscipline #StateandLocalBudgetingGimmicks #StateandLocalRevenueEstimating #StateofGeorgia #GeorgiaSenateBudgetandEvaluationOffice #StateandLocalGovernmentPerformance #PublicSectorBudgeting #StateBudgetingLessonsfortheFederalGovernment #RestoringFederalFiscalRestraint #CarolynBourdeaux #BudgetLessonsfromtheStates

This male-dominated 1953 photo of a National Association of State Budget Officers (NASBO) annual meeting would not have been a surprise to public sector leaders of the time. Not many people would have expected back in Eisenhower’s first term that women would be in important budgetary leadership positions in the states. But 70 years later, a lot has changed, as evidenced by the recent NASBO webinar that featured three of NASBO’s current leaders: Oregon’s Kate Nass, who served as NASBO president from 2020 to 2022; Colorado’s Lauren Larson (2022-2023) and Ohio’s Kimberly Murnieks, who starts her term as president in July. Also participating in the webinar was Moody’s Analytics economist Emily Mandel, and the current NASBO executive director, Shelby Kerns. This is the first time that all three top executive officers of the membership association are held by women, and Kerns notes that it is reflective of a demographic shift in membership that has occurred over many years. “I’m glad this resonates with women who are looking for models of strong, smart women leaders,” she says. “Lauren, Kim and Kate were elected by their peers – women and men – because they stand out as leaders in their states and in their profession.” Demographic shifts occur slowly over time. In the 1990s, when we were first researching and reporting about state government management, NASBO saw the first woman elected to the role of president – Nevada’s Judy Matteucci. That was followed by two budget directors we knew well -- Kansas’s Gloria Timmer in 1996-1997 and Utah’s Lynne Koga the following year. In 1998, Timmer was appointed the first female NASBO executive director. (We remember fondly the tour she gave us of the Topeka Capitol in the late 1990s, and were saddened, as were so many people, by her untimely death in October 2000.) The percentage of women in NASBO’s membership, which is typically made up of the top three budgetary positions as reported by states and territories, has more than doubled since the time when Matteucci took the role of president. In 1992-1993, there were 26 females out of 147 listed or 18%. By 2023, females held 68 positions out of 178 listed or 38%. Below is a photo from the 2019 annual membership meeting in Seattle, which provides a powerful visual picture of the shift that has occurred over the years. On the left side from front to back are Beth Ashcroft, state budget officer, Maine, and Bran Shim, Finance Director, Massachusetts. On the right side from front to back are Bakia Parrish, budget administrator, Georgia; Chris Wells, division director, Georgia, and Melissa Moats, division director, Georgia. (Note that titles and positions are from 2019.) “The change does stand out when you see it in pictures,” Kerns says. (This blog post was originally published in a slightly different form on March 14, 2023. The original on our website was accidentally overwritten and we’re re-publishing it now.) #StateandLocalGovernmentBudgeting #StateandLocalGovernmentManagement #WomeninGovernment #WomenBudgetDirectors #NationalAssociationofStateBudgetOfficers #NASBO #NASBODirectorShelbyKerns #StateandLocalGovernmentLeadership #NASBOLeadership #ChangingTimes

by Greg LeRoy Executive Director, Good Jobs First, a nonprofit watchdog group on economic development incentives. Public officials, groomed for decades to “give away the store” to attract businesses, are misreading the new CHIPS and Science Act. Contrary to what some are telling taxpayers, the Act, which includes $39 billion for new semiconductor factories—does not require massive or matching subsidies from states or localities. Still, microchip manufacturers — all too glad to double dip — aren’t correcting the record. That may come as harsh news to some residents of New York and Ohio, which have recently committed two of the biggest subsidy “megadeals” in U.S. history to microchip makers. The Empire State committed at least $6.1 billion to Micron and the Buckeye State’s total for Intel is $2.1 billion and counting. In fact, those states and others who are playing the same game, do not have to spend huge sums to qualify for the federal incentives, even though that’s a generally held impression. Read the federal CHIPS Act closely and you’ll see that states or localities seeking to win a “chip fab” need to offer “incentives.” But it then immediately defines such incentives as including a number of things other than direct-to-company aid, including investments in workforce development or other public goods. Indeed, the CHIPS Act anticipates that states will reflexively try to subsidize companies directly, but advice about its use from the Commerce Department says direct corporate subsidies, such as tax abatements, are less beneficial and thus less competitive. Yes, an applicant company “must be offered a state or local government incentive,” however: The [U.S. Commerce] Department encourages projects that include state and local incentive packages capable of creating spillover benefits that improve regional economic resilience and support a robust semiconductor ecosystem, beyond assisting a single company. Such incentives might include investments in workforce, education, site preparation, or infrastructure (including transit or utilities) that are not limited to the applicant, but designed to benefit both the applicant and the broader community. Likewise, the Department will place less weight on incentives (such as direct tax abatements) with less potential for spillover benefits. Translation: states and localities should focus on making themselves “sticky” for tech employers by investing in cost-effective public goods and services that generate the biggest payoffs. That’s the opposite of risky “megadeals” and a smart way to ensure the broadest possible community benefits. The CHIPS Act guidance is the latest evidence that Uncle Sam, thanks to the Biden administration, is finally over the reflexive American fear of Industrial Policy. Combined with elements of the Inflation Reduction Act that augur in favor of domestic manufacturing, the two laws are signaling that the “economic war among the states” or “race to the bottom” is a losers’ game. The real competition is overseas, not the state next door. That’s great news from Washington, but the early microchip deals reveal that the 80-plus years of indoctrination by our tax break-industrial complex has created a belief system among states and cities that will not fade away easily. We at Good Jobs First call upon President Biden and Commerce Secretary Gina Raimondo to get louder on this crucial message. The CHIPS and Science Act is not intended to drain state or local coffers by bankrolling subsidy megadeals, but rather to help build more resilient economies. More resilience means wider broadband access, better access to public health services, catch-up help for students after Covid, cheaper access to community colleges and state universities, modernized infrastructure — and other public investments that benefit all working families and employers both incumbent and prospective. The contents of this guest column reflect those of the author and not necessarily those of Barrett and Greene, Inc

by Hala Altamimi Assistant Professor, School of Public Affairs and Administration, University of Kansas In the public administration literature, it is generally expected that city managers are likely to support practices that improve government performance. There’s little question that’s true for a variety of reasons. For one thing, unlike elected officials who can retain their jobs based on simple popularity or name recognition, city managers are evaluated based on their ability to achieve policy goals and improve the quality of life for residents. This creates an incentive to encourage practices such as performance measurement, auditing, and evaluation that help them achieve these goals, building a strong reputation and career as qualified professionals. All of this means that they tend to take a long-term view in managing their cities. But, at least in one field of endeavor these expectations, surprisingly, do not seem to hold true as I discovered in my recent research on performance auditing in 110 local governments. One of the questions I tried to answer was whether performance auditors are more effective in council-manager or mayor-council governments. My unexpected conclusion: Performance auditors may not be as successful in council-manager governments. This finding contradicts previous public administration literature but is consistent with research done by former Kansas City Mayor and Auditor Mark Funkhouser in 2000. He also found that municipal governments with a council-manager form are less likely to have an audit function. The research that led to this conclusion didn’t delve into the reasons for this startling finding, but I have a few possible explanations. First, elected officials – and those who seek to obtain those positions – may use audit findings as a political tool to suggest problems in government management and policy implementation, which can create tension between auditors and managers. Audit findings can be weaponized to advance political goals and agendas, and media coverage of audit reports can make this strategy more effective. This can hurt the relationship between auditors and managers. Actions that blame managers for performance problems can potentially breed antagonism and reduce managers' acceptance of audit recommendations. ​ Second, local government managers may feel like they are competing with performance auditors for professional recognition. Both managers and auditors play important roles in policymaking, and they both see themselves as stewards of effective governance, organizational learning, and accountability. As such, they may end up competing to achieve these shared goals. This competition may become more visible when auditors are independent of the manager's office. Additionally, managers and auditors both want to influence the governing body, which can create tension between them. Managers may prefer to be the only ones influencing that body. ​ Finally, managers and auditors have different kinds of institutional logic that shape their perspectives and behavior. Auditors see their role as one of control and oversight, while managers see their role as one of professional judgment and discretion. As a result, managers may see auditors as a threat to their professional judgment and discretion. ​ To address this potential tension in the manager-auditor relationship, many auditors adopt a collaborative approach that focuses on building trust with managers to facilitate information sharing and problem-solving. This approach involves using a less confrontational tone, involving managers in discussions, and suggesting appropriate actions to address identified problems. Research has shown that auditors who follow this approach are more successful in getting managers to listen to them. ​ Life isn’t as simple as total collaboration, however. Though it’s in the auditors’ best interest to work smoothly and well with city managers, they must do so without risking their independence or creating any biases – implicit or explicit -- by getting too close to managers. ​ The contents of this guest column reflect those of the author and not necessarily those of Barrett and Greene, Inc