Everyone, including local governments and their elected leaders, benefit from economic growth. Consequently, local governments devote time and resources to encouraging it. In the largest and most densely populated jurisdictions in metropolitan Atlanta – the City of Atlanta, Fulton, Cobb, and Gwinnett counties, there is plenty of government sponsored economic development activity.

Organized, institutional efforts to spur economic growth at the local government level often comprise four components — a chamber of commerce, a government agency, transfer payments (tax incentives and grants), and one or more special purpose entity.  The special purpose entity may issue bonds, control assets, or forge partnerships.  It may or may not receive grants from the local government in the way of real estate or cash.

A good working relationship among these four types of entities is probably necessary for an effective  local economic development effort, but identifying  just what “effective” is, is the more difficult task. Economic development programs are notorious for taking credit for any positive economic activity within a jurisdiction’s boundaries – job growth, increased property values, and even rising income levels. The problem is that at least a dozen factors unrelated to a local government efforts contribute to positive economic outcomes. Teasing out the impact of government action is a statistical quandary.

The policy question presented to elected officials is simple, but nearly impossible to resolve – what investment in economic development yields a net positive benefit? This past week, the Fulton County Commission in a 4-3 vote decided that $750,000 more is needed to spur economic development in the County. Commissioners Darnell and Edwards, regular defenders of programs that support the poor, wondered where was the feasibility study and where would the funding come from given the County’s fiscal condition.

No answers were given. The County’s peers have such agencies and that might just be enough. These types of local government agencies coordinate resources to attract businesses, apply for and manage federal and state economic development grants, develop incentive packages, and analyze economic development trends.

It is unclear  just what Fulton County will gain in return for its $7.5 million investment in economic development (present value of $750,000 at a 10 percent discount rate), but alas, a majority vote of the Commissioners beats policy analysis every time.

The City of Atlanta Public Schools is still reeling from the cheating scandal of 2009. The Atlanta Journal Constitution first brought attention to unusually high increases on state curriculum tests at several APS schools in 2008.  Further investigation uncovered cheating at dozens of schools resulting in 178 educators being implicated in the scandal. Immediately attention focused on Atlanta’s award-winning superintendent of 10 years — Beverly Hall — whose hard-driving, take no prisoners, hold everyone accountable style alienated some while winning praise from others. She wanted the test scores to improve and would not abide excuses. To emphasize the importance of this goal, she offered financial incentives to everyone in the school – cafeteria workers and bus drivers alike – if the school’s test scores met improvement goals.

Imagine the school teacher’s reaction when presented with the proposition that if her students’ CRCT scores improve, she will get $1,000. ‘So that’s what’s been holding me back from giving these children my all — a check for $1,000,’ the teacher says to herself. If you are the principal of a school, and you have a teacher whose students perform better only when the teacher is promised a $1,000 bonus… fire the teacher.

Consultants can be depended on to echo management guru Peter Drucker’s time-tested mantra that you can’t manage what you can’t measure. Many consulting practices are organized around helping managers figure out what they should measure and how to report it. Somewhere along the way consultants began to recommend not only performance measures but tying individual performance measures to financial incentives.

With the introduction of performance measures to the public sector, Campbell’s Law took effect. ”The more any quantitative social indicator is used for social decision-making [read: the allocation of public resources to an organizational unit or an individual], the more subject it will be to corruption pressures and the more apt it will be to distort and corrupt the social processes it is intended to monitor.” [Campbell, Donald T., Assessing the Impact of Planned Social Change The Public Affairs Center, Dartmouth College, Hanover New Hampshire, USA. December, 1976]

But why financial incentives don’t work  to explain or predict individual behavior although useful at the firm or societal level is akin to why Einstein’s Theory of Relatively works for the macro level but fails to explain physical phenomena at the subatomic level. We just don’t understand it completely yet. Physicists appreciate the power of Einstein’s theory to explain the behavior of planets but recognize that Max Plank’s quantum theory is superior in explaining the behavior of protons, neutrons, and electrons. Social scientists, and the public sector managers who listen to them, need to come to the same conclusion about applying economic principles to individual behavior.

Having success in grafting a new idea upon management culture is often a matter of the means one chooses to communicate it. One effective way, I shall assert, is by formulating the idea as a law. So here it is, the first law of ESTIS:

If you have team members who love what they do, no manner of financial reward will make them do it better.

Hire people who love what they do, pay them commensurate with the market, and give them the tools and support to do their jobs.

•  Share your client’s interests: “The first condition of a good counselor is that his ends and interests be not inconsistent with the ends and interests of him he counsels.”
• Make the case for your counsel in language that is logical, clear, and concise: offer advice with “…as firm ratiocination, as significant and proper language, and as briefly as the evidence will permit.”
• Know your subject matter: “No man is presumed to be a good counselor but in such business as he has not only been much versed in but has also much meditated on and considered.”

Hobbes suggest that consultants to government obtain a thorough understanding of the following:

• The nature of people
• The nature of governments
• Law
• Economics
• The inclinations and designs of a government’s allies and enemies (particularly in matters of foreign policy)

When advising on matters governed by infallible rules (e.g., engineering, statistics) know the rules, experience matters little. But when advising on matters not governed so, experience rules.

In Hobbes’s time consultants to government were not housed in firms with omniscient sounding names, but operated as members of the Court whose job it was to know a subject and to provide counsel to the King. Today such counselors include staff members as well as outside consultants that offer advice on matters such as the political implications of a decision or a vote, the costs and benefits of implementing a policy, and ways to organize and deploy resources efficiently. How counsel is solicited and used, and how it is delivered are critical components of modern government. Methods for improving such advice are worthy of critical examination, but before reading that 150 page business book explaining how to be a better consultant, one might consider studying the seven and half pages Hobbes devotes to the subject in Chapter 25 of Leviathan. If public executives and advisors to government follow Hobbes’s advice, the reputations of both would be enhanced.

If concern for the ethos of self-government is not growing then we should be concerned indeed. Such complacency indicates we understand little of what makes the American experiment in self-government successful — a tacit agreement by both parties to honor the reciprocal duties and obligations that exist between the American people and their government.

Gwinnett County, Georgia, a melting pot suburb of Atlanta, just concluded an amnesty program for drivers who were issued a bench warrant for failure to appear in court.  Under the program the warrant is recalled and the $25 bench warrant fee is waived for anyone paying their citation in person. At the start of the program there were 30,000 warrants outstanding.  The results are in:

Fines sent to the general fund — both from overdue tickets and those collected as part of normal business — totaled $734,521. That’s about $65,000 more than was taken in during February and $35,000 more than was received in January. However, last March when no ticket amnesty program was offered, the county took in $903,676. 

Amnesty programs, which are widespread in US state and local government, can generate revenue, but at what price. If these fines and fees are otherwise uncollectible, the cost of amnesty would appear to be zero. But certain costs are inevitable:

• Law abiding citizens who honor their obligations and pay on time bear an unequal share of the cost of supporting government
• Future fine collections may go down – people anticipating a future amnesty program may delay payment

The more significant cost, however, is  hidden — the erosion of faith in representative government. The public’s faith in its government is like dark matter in the universe. It is nearly impossible to measure, but we know that it must exist or else the system would collapse on itself. Amnesty programs eat away at the dark matter — the pubic trust —  which is the indispensable glue of self-government.

Constant reminders that government cannot enforce its laws can only have the effect of eroding the public’s confidence in institutions of government. The Arizona immigration law of 2010, and Georgia’s 2011 “me too” version, may be more about closing the gap between legislative intent and executive action than it is about keeping foreigners out. If we square immigration laws with enforcement practices, perhaps the national government can bolster its legitimacy it the eyes of residents of border states.

There is no one person or group of people responsible for the clogged process of issuing, serving, and enforcing warrants. American government, local and national, is an amalgam of factions and interests moderated by a sovereign Cerberus. Democracy is the second worst form of government on earth according to Winston Churchill, all others being the worst. And it is here where the “worst” part is observed — the penchant for government to make grand gestures to appease voters with little concern for the implications of such decisions.

The American government works because we abide voluntarily by the laws and customs of our polity. If a significant number of citizens decide to break the law all at once (think Tahrir Square) the government’s enforcement apparatus would be hopelessly overwhelmed and feckless. There are occasions where civil disobedience is necessary (think Tahrir Square), but generally a political system works when its citizens agree to and abide by its laws and customs. There will always be a fraction of the citizens of any nation who break the law, but they represent a manageable minority. At the edge of this minority sits a tipping point beyond which the average citizen perceives that government can no longer be relied upon to honor its obligations in the social contract. Leaders in a democracy should not take actions that push the public toward that tipping point in exchange for a quick revenue fix.

Unless the exact same dollar amount is collected from each individual and returned promptly dollar for dollar, then any and every tax redistributes income.  Once society forms for itself a government and begins collecting taxes, it is redistributing income. It matters not for what the taxes are used. Taxes, by definition, redistribute income. Even if the exact same amount is collected from each individual and spent on a public good that everyone in the society could or would consume (e.g., national defense, managing foreign relations, collecting taxes, or administering justice) the effect would be to redistribute income.

Setting aside the absurdity of having every individual contribute an equal amount in taxes – including babies, the developmentally disabled, unemployed, and the aged – the basic reason that all taxes redistribute income is that every single person does not receive the same benefit from the public good being purchased with the taxes.

• National defense: The threat of invasion or terrorist attack is greater in some parts of the country than others.   Consequently, the distribution of defense forces is strategically arranged to anticipate attacks. It is not distributed to ensure that every location is equally protected.  There is a higher concentration of defense forces around Washington, DC than say Bismarck, North Dakota. Although it is the goal of the military to defend the entire country, we neither have the resources, nor would it be wise, to arrange our defensive capabilities to protect every square mile in the entire country equally.  To think of it another way, if each state in the United States were a nation, 23 of them would not have a navy.
• Managing foreign relations: Some industries depend on the free flow of trade among counties and therefore have a greater stake in the US having favorable diplomatic and trade relations with other countries.  Indirectly, all inhabitants of the United States benefits from having good relations with the world.  The shipping industry, and industries relying on imports and exports, benefit directly from favorable diplomatic relations, whereas a small US-based agricultural company that sells all of its food locally, may not derive a great benefit from the portion of its tax dollars that go towards creating favorable trade relations with say a Central American country that produces the same products more cheaply. The benefit each taxpayer receives from expenditures at the State department vary according one’s business interests and consumption patterns.
• Administering Justice: The application of justice is concentrated in those areas where crimes are committed.  Because the incidence of crime is not evenly spread throughout the population, the need for the services rendered by the justice system is different for different locations.  Some people and neighborhoods receive a greater share of justice services than others.
• Collecting taxes: The effort necessary to collect taxes varies by tax type and by the type of entity being taxed.  Following up with taxpayers is easier to do when they are physically close to a tax office and reachable by transportation and telecommunication networks.  Sales taxes are easier to collect than income taxes.  Although many people would not consider the collection of taxes a “service,” it is an activity of the government that is administered in unequal doses to reflect the variation in effort required to collect different types of taxes from different types of taxable entities.

These four functions correspond to the four cabinet level agencies created with the founding of the US Republic in 1789.  They represent the minimal executive infrastructure necessary to operate a national government.

To say a policy redistributes income says nothing about whether it is a good policy or a bad one. The question should be: does the redistribution serve a public purpose and from whom are the funds coming and to whom are the benefits going.

Kudos to the Mayor for being visible, taking responsibility, and stepping in where the State fell short.  However, allowing a major City to shut down for a week after a predicted snowfall is unacceptable.  Here are some suggestions for being better prepared in the future.

• Know the potential need: Snowfall and temperature  predictions are fairly accurate; the number of lane miles in Atlanta are fixed, the time necessary to spread gravel/salt per mile is known, the equipment the State and the City has on hand and the personnel it has to operate the equipment are documented.  A straight forward algorithm can be developed to calculate snow removal equipment and personnel needs given certain weather conditions.  The City needs an emergency plan that ensures the City is back to work in two days given a range of weather related emergencies.
• Coordinate State and City responses.  The City and the State must know each others’ capabilities and plans.  A good emergency response plan can avoid confusion over who is doing what and when.  If necessary the City and the State should execute a memorandum of understanding regarding their responsibilities in a weather emergency.
• Outsource snow removal.  Government entities in places where snow is a rare should put contractual arrangements in place that allow them to augment their snow removal capabilities on short notice.
• Be creative.  During the week-off in Atlanta, thousands of able-bodied persons sat at home, eager to get their City back to work.  Businesses were eager to get the City back to normal so that they could minimize their losses.  How about organizing volunteer brigades to extend the City’s capabilities.  A strong citywide volunteer coordinator should ask businesses to offer vouchers (a meal, movie passes, store discounts, etc.) to all those who volunteer to remove snow during an emergency.

Trust and communication, analysis, contingency planning, and volunteer coordination could have mitigated the impact of 4 inches of snow and below freezing temperatures on Atlanta and the State of Georgia.  With the experience fresh in their minds, State and City leaders should sit together to upgrade their weather emergency plans.

Prior to November 2009 Atlanta residents had a well justified, casual attitude toward paying for parking downtown. In the ’90s a letter to the weekly newspaper Creative Loafing advised readers never to pay for parking in downtown Atlanta, because ‘a free space can always be found nearby.’  From May 2009 until the following November, monitoring of metered spaces was neglected altogether because the City of Atlanta had laid-off its parking meter collection staff creating 2,500 free parking spaces downtown. Compounding this easy parking policy was the pattern of development in downtown Atlanta over the past three decades which has produced soaring office towers surrounded by surface parking lots. Residents and commuters alike had been accustomed to abundant and inexpensive parking in downtown Atlanta for years.  Some people had even come to see free parking downtown as an entitlement.

Fiscal pressures and promises from a private contractor to increase parking revenues finally convinced the previous mayor – Shirley Franklin – to sign a contract with PARKatlanta to outsource parking enforcement. The PARKatlanta contract has caused such a firestorm that had it occurred during Mayor Franklin’s first term, it would have threatened her re-election.  The current council and Mayor inherited this debacle and aren’t considered responsible for it, but they are responding aggressively to residents’ outrage.

Press releases by the City and PARKatlanta say the right things – the purpose of the contract is “to improve the uses of the public right-of-way,” but the initial policy choices belie the rhetoric. Enforcement 24 hours a day, when drivers only want parking from 7 am to 10 pm, is rightly seen as merely an effort to grab more revenue.  Rates, time limits, and enforcement are appropriate mechanisms for allocating the scarce resource of convenient parking spaces, but not for filling a budget gap.  The City emphasized revenue rather than the public purpose of metered parking and parking enforcement which resulted in policies that yielded little public benefit and which generated a negative citizen reaction.

City policy should establish the public purpose of the use of the right of way, as follows:

1. First and foremost, enable the personal, commercial, emergency, and public safety vehicles to move about the city
2. Allow for the temporary parking of vehicles but only after the primary purpose of the right-of-way is addressed
3. Where demand for parking spaces exceeds supply, set a price for use of the space by means of parking permits in the case of residential areas and parking meter rates in the case of commercial or mixed use areas
4. Establish time limits, rates, and enforcement practices for parking to allocate parking spaces in an efficient manner
5. To ensure that meter revenue is not a tax for general services, allocate any parking revenue in excess of the cost of maintaining the meters to support construction, maintenance, and operation of the right-of-way

Because public demands for parking spaces vary across a city and change over time, a city should establish Parking Zone Advisory Committees to make recommendations about enforcement hours and time limitations for parking in the zones.  Their recommendations are not binding, but give public officials a sounding board for parking policy decisions.

The effort to implement Atlanta’s new parking regime is seen by many as a failure in change management. In some ways it is, but closer examination reveals it as a failure in policy as well. When pressed, Atlanta could not justify its draconian 24 hour enforcement policy or uniform time limits on grounds of efficiency or public benefit.  The impact on the public (a transfer of several million dollars a year from parkers to City government) called for a defensible policy and a major public relations campaign. The City initially missed on both counts and today – 14 months later – is still facing fallout from that mistake.

My perspective is that of a policy analyst.  I am interested in data.  I am handy with the tools of my profession — microeconomic, statistical, and organizational analysis.  There is little room for ideology in my analysis of policy alternatives for local governments.  I can lean left or right, but generally shoot straight.   My approach is informed by objective analysis, but is tempered with years of experience as a consultant to public officials.  I have spent over 20 years of my professional career advising state and local governments on what to change and how to go about making change.  

My beliefs about government are simple.  The principles of government that emerged from the enlightenment still offer the best guidance for organizing society.  Among these are natural rights, separation of powers, limited government, and the rule of law.  Neither the right nor the left has a monopoly on the truth, but both are essential for the survival of a republic.  For citizens to guide the ship of state along a straight path, they need oars starboard and port.

This blog addresses effectiveness and efficiency issues in the major functional areas of state and local government such as: public safety and criminal justice, education, public health and the environment, human services, and transportation and infrastructure.  It also analyzes cross-cutting functions such as: human resources, budgeting, financial management, procurement, and technology.  Occasionally posts discuss management improvement approaches such as performance measurement, change management, strategic planning,  balanced scorecard, performance auditing, business process management, and six sigma as they apply to state and local governments.

I hope this blog will inform readers, encourage debate, and deepen our collective understanding of how to improve local government.  I am glad to have you along.