Where the Waste Is: Why Not a Flipcam? Edition

A PA system does not cost $14,500, it costs about $400-700 dollars

Forks Township supervisors agreed to solicit bids for a proposal that would replace an aging audio system with digital technology to stream audio on the Internet from municipal meetings.
Township Finance Manager Jim Farley will solicit bids from vendors for a new sound system — estimated to cost between $14,500 and $24,500. The system would be funded through the township’s capital budget, according to supervisors.

A good-sounding PA system, microphones ($100) and a Flip cam ($117) will easily do the trick, and you can probably get them all for under $1500.

Regional Policing Moves Forward in Nazareth

Pamela Sroka-Holzmann at the Express Times brings us some encouraging news on regional policing:

Borough council on Monday unanimously agreed to negotiate a contract for police coverage from the Colonial Regional Police Department.

Borough council wants to move forward on a three-year contract with Colonial Regional. A committee including councilmen Jack Herbst, William Matz, Daniel Chiavaroli and secretary Paul Kokolus will negotiate the deal.

Mayor Fred Daugherty Jr. recommended last week that the borough start negotiating with the force:

“I would like to thank council for acting on the recommendation I made,” Daugherty said. “This is not something I just jumped into. … “If it’s unpopular, with certain folks, so be it. I’m willing to live with that, I am doing the job I was elected to do.”

That’s exactly the right attitude for politicians to have. Not every good policy is going to be popular, and it’s no fun to cast votes that make a lot of people want to yell at you, but politicians can always choose to do the right thing and take the heat for it. Good on Fred Daugherty and Borough Council for taking the plunge together unanimously.

Casino Money and Budget Transparency

Doling out casino money seems like a good source of leverage for Northampton County to make municipal governments put their budgets online. To get any money, municipal governments should have to make their budgets available on the county website as machine-readable data, not PDFs. If you had everybody’s budget data, you could compare per capita expenditures for services across the counties and see who’s getting a good deal, and who’s getting ripped off.

I think this would make a great campaign proposal for Stephen Barron.

Where the Waste Is, Cont’d.

Jan Murphy reports on a state transfer to municipal governments that’s exempt from any reporting requirements:

In February, Howe Township received $150 from the Pennsylvania Liquor Control Board.

There was nothing mysterious about it. Every year for decades, the Perry County township, like hundreds of others across the state, has received a check from the Liquor Control Board to defray the cost of local law enforcement.

But Howe is one of hundreds of towns getting grants, even though they don’t have local police departments. The township relies on the state police.

About a third of the communities that received such grants in February — 407 of the 1,153 communities — rely on the state police.

The liquor board can’t say how the money is used. Communities have no reporting requirement, regardless of whether a municipality receives $25 or $1 million.

Probably one of the strongest points in favor of county-based police departments is the fact that so many townships (Lower Macungie…) free ride on the state police even though they clearly ought to be paying for a police force of their own. The rationale for hyper-local municipal police departments is the assumption that their response times must be better than county departments, even though there’s not any hard data to support this claim. But then what should we make of the places that seem to be pretty content, at least for the time being, mooching off the state police for their local policing needs?

What Should Liberals Want From Local Government?

Apologies up front for a really sloppy post, but I wanted to throw some thoughts out there on a topic whose importance has increased recently because of Gracedale and budget shortfalls:

What do liberals want local government to accomplish?

The conservative answer is easy: the bare minimum provision of law enforcement services, paid for through a very low level of regressive taxes.

The liberal answer is more complicated and requires us to prioritize what we care about. It requires us not to confuse our priorities at the federal level and the state level for what we can realistically accomplish at the local level. There are only so many things local governments can do because 1) their power is limited by state government and 2) willingness to pay local taxes is very low.

Here is a short list of what’s in the toolkit:

1) Directly pay for the provision of services (education, law enforcement)
2) Contract for services (garbage, nursing homes)
3) Require other private citizens and businesses to pay for things.
4) Tax or ban harmful activities
5) Make rules that promote social equality (same-sex couple benefits, etc)
6) Targeting spending or planning in a way that attracts private investment (public/private partnerships, high density zoning, etc.)

Feel free to add in other things I forgot.

Here’s a key source of my disagreement with some other liberals: local government should not be thought of as a jobs program. I think the goal should be to provide high-quality high-impact public services as cheaply and efficiently as possible.

Because the willingness to pay taxes is so low, and local budgets must be balanced during recessions, local government shouldn’t get tied up with its own entitlement programs.

This means we need to be thinking harder about the trade-offs of directly providing services vs. contracting for services. Sometimes you need to directly provide services, as in the case of law enforcement, but that means you’ll get stuck paying for pensions and health care. There’s a strain of make-work liberalism that views this as a benefit, but I think it should be seen as a cost.

In order to have more money to accomplish our other goals, I think we should actually want minimal benefits and short terms for civil servants – cash + health insurance and a defined-contribution portable pension. A Geeting Administration would push for short contracts for non-executive public sector jobs: you put in 3 years, we contribute 10% of your salary to your pension every year, you’re vested after 3 years, and then you can take your retirement savings account and go do something else. We don’t want to be giving people incentives to stay in administrative public sector jobs for their entire lives. The “retired in place” phenomenon is a real issue in the public and non-profit sectors, and I think liberals need to take that critique more seriously.

And we want to do this not because we don’t value what public sector workers do (we do! we’re liberals!), but because we want to maximize the amount of money we have to accomplish other goals that have an equally strong claim to limited public dollars.

One thing we should do is look for ways to accomplish our goals without spending money, by privatizing costs. For instance, you could tax residents to set up a government fund to pay for facade improvements, or you could tax people for not paying for their own facade improvements within a certain district. One way costs the taxpayers, the other does not. The same is true of open space preservation. You could tax residents to set up a government fund to buy farmland, or you could use zoning to block suburban/commercial development on land you want to stay farmland. One way costs the taxpayers, the other does not. We should be moving toward the latter strategy in a number of areas.

We also need to reconsider when it’s better to discourage harmful activities by banning them outright, and when it’s better to discourage them through taxes and pecuniary penalties. I think taxes should be substituted for bans wherever possible because it’s a two-fer: you discourage the activity in question by privatizing the cost and you get revenue.

For instance, current law says the DA should shut nuisance bars down as a deterrent strategy. But you might get the same or better results by fining the offending establishments. The same goes for parking. You could paint more parking spaces, you could tax residents to build another parking garage, or you could just charge more for the spaces you already have. You could shoot yourself in the foot on economic development by banning certain kinds of businesses from opening in the downtowns because there’s not enough parking. Or you could raise the price of parking near those places to ensure faster turnover of spaces.

Local taxes are regressive, so it’s better to try to get as much revenue as you can by taxing undesirable things before you tax property, income and sales.

I probably haven’t made it clear enough that the main reason I write about urban issues so much is not just because of aesthetic preferences – it’s about increasing the economic opportunities available to disadvantaged people.  It’s about ensuring that the economic benefits that come with population growth are broadly shared. There are many things that local government can do to reduce economic and racial segregation. How well are the children of economically disadvantaged people served by the education system relative to the children of wealthy people? Not very well, as I understand it.

And the ugly truth is that it’s because there are two education systems: the white property tax dollars are segregated from the brown property tax dollars. Additionally, the low-density development patterns favored by white suburban people pull jobs and revenue out of the cities and into the suburbs, leaving fewer licit job opportunities for economically disadvantaged people in the cities.  To get to the jobs, you have to own a car.

That’s why higher density and public transportation have to be an important part of the opportunity agenda for local government. The closer together people and their jobs are, the more it makes sense to invest in quality public transportation. Sometimes these urban issues sound like yuppie concerns, but when you actually look at who would benefit most from reducing barriers to high-density construction, reducing the need for car trips, reducing tax base segregation, reducing licensing and other barriers to entry in the labor market, it’s the lower income brackets who would be helped the most by all those things.

This is already much too long, so I’ll stop there, but to summarize, we need to be more strategic in our thinking about solving problems, and make sure we’re using all the tools available to us.

The Day of Reckoning Fallacy

It’s hard to understand why Bernie thinks Doug Reichley’s political cowardice is a “reality check.” Consider the following quote from Reichley:

I was at a candidates’ night last week of school board candidates where four of them promised they will not raise property taxes to abounding applause from, primarily, seniors. So we’re gonna’ have the Armageddon of school district battles in East Penn of people who are opposed to tax increases against people who have kids in school. And that’s as it should be. There’s no more ducking this issue. We overspent the last few years.

First of all, if the state raised income taxes, or replaced the state’s regressive flat income tax with a progressive rate structure, or raised taxes on investment income like capital gains, that would also protect seniors from property taxes. Instead, the Corbett budget cowardly kicks state debt down to local governments and school districts, creating the need for property tax increases. By rejecting state level income tax increases out of hand, Reichley will be directly responsible for the property tax increases he says he opposes.

The other problem with Reichley’s comments is that he apparently subscribes to the same Day of Reckoning Fallacy that Tom Corbett and Bernie believe. The story goes like this: the state budget is out of balance because “we overspent.” We thought we could afford to increase education spending, but then the recession happened so we’re screwed. We’ve reached a Day of Reckoning where we have to atone for the “sins of the past”. We’ve made our bed and now we have to lie in it.

If that story misrepresents Bernie’s views, I’ll be happy to amend it, but as it stands, it is a very very stupid story.

Pennsylvania did not suffer a tsunami in 2008 that ruined that state’s ability to produce goods and services. There was no earthquake or terrorist attack or famine outbreak. In other words, the economy did not suffer a real shock, it suffered a nominal shock – a temporary flight to safety where households and firms decided they wanted to buy fewer goods and services and horde more cash money and safe assets. The drop in buying and sellling meant lower tax receipts. But now that tax collections are returning to normal, the deficit is shrinking and PA now has a surplus six times larger than projected.

That’s all just to say that there is no Day of Reckoning – as demand for goods and services continues to return to normal, revenue collections will also go back to normal and the state’s deficit will disappear all on its own.

Corbett, Reichley and Bernie appear to think the budget is some kind of morality play where the state is doomed to slow growth forever, but really it’s just a temporary, totally avoidable waste of our productive capacity with needless human consequences. Reichley’s not being brave, he’s not speaking hard truths, and this is certainly not a “reality check”: it’s a fundamental misunderstanding of where the budget deficit came from.

The Liberal Case for Selling Gracedale

Rich Wilkins invites me to convince him not to vote for the Gracedale initiative:

Gracedale- I’m voting to keep the home. Supporters of a sale say we’ll get a $20 million, one time pay in, after all the costs are subtracted from the cost. After that, we’re done. This county is in great fiscal shape, the only reason there wouldn’t be money to run the home is because of a choice to not do so. If we sell the home, it won’t prevent a tax increase in the near to medium future, and anyone saying otherwise is just setting up to irresponsibly vote “no” on that. Let me be clear, because some think a sale will free up money for other things, like infrastructure improvement, mass transit, and a bi-county health board: The sale of Gracedale will not finance those things. Don’t be fooled. Couple all of this with the strong-handed effort to not allow this to go to a vote, and it’s an easy “Yes” vote for me.

Disagree? Come on and convince me to change my mind then.

Ok here goes:

I think the main disagreement here is about means, not ends. It’s a pretty standard tenet of Big Government liberalism that the richest country the world has ever known has a moral responsibility to care for senior citizens. That’s why we created Medicare. An enormous amount of medical spending happens at the end of life, which creates an adverse selection problem in the insurance market. In a truly free market, there’s no way any insurance company would sell insurance to a senior citizen. So we created a single payer system to better manage risk, and as liberals never tire of pointing out, its been more successful at negotiating lower prices than private insurance companies have. But this is still a very expensive undertaking, and it’s about to get much more expensive as the baby boomers retire.

But even though it’s going to get more expensive, and sundry politicians and think tanks are now putting forward proposals to control long-term health care costs, notice that we’re not talking about ratcheting down spending to match lower revenues this year. And that’s because the federal government can run a deficit. There doesn’t need to be any immediate reduction in care, because the program is financed at the federal level. I think this continuity of care, despite deficits, is one of the most important features of our health care delivery system for seniors.

You don’t see the same thing with Medicaid. Republicans want to turn Medicaid into a block grant program right away, under the guise of helping relieve the fiscal crunch at the state level. Now, if Republicans were really serious about helping states, they’d be talking about making Medicaid a fully federal program, to prevent any need for cuts during recessions. But because state governments have balanced budget requirements, the politics of cutting Medicaid aren’t nearly as toxic as cutting Medicare, since the alternative to cuts is raising taxes, which nobody is willing to do.

I’ll bet Rich would probably agree with me on federalizing Medicaid, for the reason that it pulls the program off of a pro-cyclical budget and onto a counter-cyclical budget. As a general rule, it is better to pay for services that we don’t want to be interrupted from a counter-cyclical budget.

Gracedale is on a pro-cyclical budget. And that is why we’re seeing the same political dynamic as with Medicaid. Selling it is unpopular, but look at the looming fiscal crunch, and ask yourself whether a majority on County council is going to vote for the tax increases Jenna Portnoy describes here:

Say, for example, the nursing home needs $6 million in county dollars in 2012 — same as this year. The administration is still assessing capital needs, but Stoffa said improvements would total about $15 million over five years. Debt service on a $15 million bond would cost about $1.2 million a year for 20 years.

Operating costs and debt service add up to $7.2 million, which is almost the amount of revenue generated by 1 mill of tax. A 1 mill tax hike would mean a 9 percent increase over this year and would cost the owner of a home assessed at the county average $590, which is $50 more than this year

No decisions have been made about how to pay for future operating and capital needs. The county won’t begin forecasting the 2012 budget until the end of May.

Stoffa said that even in the face of a budget crunch no one would be forced to leave Gracedale. However, he could refuse new admissions and lay off staff if what he called draconian measures were the only way to maintain quality care at the Upper Nazareth Township facility.

This is a recipe for a steady slouch toward worse conditions because nobody is going to have the political will to vote for these tax increases year after year. Rich is absolutely right that this will be a choice, but I’m not optimistic that people are going to make the right choice to keep approving the tax increases. I do not want to see seniors get caught in the middle of such an unsustainable political dynamic.

What’s my solution? I want private provision of care and federal financing. Yes, the VA hospitals are excellent, and in some European social democracies government-run hospitals and nursing homes deliver much higher quality care at lower cost. But again, that’s all financed from a national tax base, not a county tax base. If people have an ideological axe to grind and want to prove that a government-run health care delivery system is superior, more power to them, but the appropriate arena to have that fight is at the federal level. The county does not have the resources or the political will to do it right.

If you care about indigent people being able to get quality housing and care, I think the best short-to-medium term goals are to increase Medicaid reimbursements and regulate higher standards at nursing homes if you think their standards aren’t as high as Gracedale’s. So far though, we’ve seen zero evidence from the Yes side that for-profit nursing homes deliver worse care despite strong claims that this is the case.

Finally, Rich says:

Let me be clear, because some think a sale will free up money for other things, like infrastructure improvement, mass transit, and a bi-county health board: The sale of Gracedale will not finance those things. Don’t be fooled.

I have no delusions that the current Council office-holders would use the savings for other liberal agenda items. The slightest whiff of a balanced budget would immediately prompt calls for tax cuts from the Republicans. But 5-10 years out, the sale of Gracedale creates the possibility of radically transforming what services County government is responsible for.

I’ve written at length in this space about the unsustainable system of local government in PA, and I think the best solution is to transfer more and more responsibilities from the municipal level to the county level. For instance, right now the entire criminal justice system is run at the county level except for policing. This is a deeply stupid arrangement, but obviously it will cost the county more money to provide police services.

The same is true of land use planning and zoning, water and sewer, economic development and preventive health services. These are the services that county government should start absorbing over the next several years, but it will not be able to if more and more money is committed to Gracedale.

Rich’s point seems to be that the county will not want to do these things, and that’s fair, but there’s really two separate questions here.

A) Will selling Gracedale free up money to absorb these other services?
B) Will incumbent elected officials want to absorb these other services?

I think the answer to A is yes. I think answer to B depends on who the elected officials are, which of course we can do something about through elections.

I believe the Yes supporters need to seriously reckon with what the liberal project at the local level is supposed to look like. It’s an important liberal goal to take care of our senior citizens, but you need to think about what level of government is best suited to doing that. I think the better liberal project at the local level is to design a government that performs its services as efficiently and inexpensively as possible, since that is what will build a more general trust in government to solve problems. You can make a lot more progress on issues like segregation, equal opportunities for education, career opportunities for low-income people, equal access to preventive health, etc. if you can move more services and decision-making to the regional level.