PARDON ME GOVERNOR, YOUR ACCOUNTABILITY GAP IS SHOWING
Michigan’s Governor Rick Snyder claims to be all about accountability. He ran as a self-described number-crunching “nerd”. Touting his business acumen as reason to trust him to lead Michigan out of a funk so low, it can easily be painted as a decade long one-state depression.
What is Snyder’s accountability plan?
For starters, he’s forcing schools and cities to bend to his will by complying with what he erroneously calls “best practices”. Under Snyder, funding is denied if his demands are not obeyed — no matter how sucessful schools and cities are otherwise in balancing their budgets and providing exemplary services — Check cancelled! Snyder says it’s his way or the highway.
Snyder’s plan has several components, key among them are privatization and consolidation. Any moderately knowledgeable CEO would know that a good business plan must first examine the previous success/failure rate of its various components to predict the outcome of its objectives, yet the Snyder administration has blithely ignored what truly is a “best practice” here. They’ve failed to grasp the utter uselessness of privatization and consolidation as a means to achieve the goal of fiscal health in the public sector. What may work in the private sector does not always make for good governance, and can often be deleterious in the business realm too.
THE CONSOLIDATION MYTH
In Public Act 63 of 2011, the “Economic Vitality Incentive Program”, Snyder has compelled local units of government to demonstrate under his purported “best practices” that they have made an effort to consolidate services, either internally or across jurisdictional borders. These acts of consolidation must, at least superficially, demonstrate a cost savings. The problem is the only way consolidation can possibly save a single dime is through a diminution of those services. Firefighters, police, 911, EMTs, are all put at risk under the consolidation scheme.
Basically there are two ways to consolidate: private or public.
Starting with the former, when these services are consolidated through privatization we lose quality without any savings. Rent-a-firefighter or rent-a-cop? Not feeling so good about that prospect? Me either. The added for-profit layer would have an alarming adverse effect on the level of service, and no one wants that when burning houses and blazing guns are involved.
Let’s examine the public scenario, by the numbers. (Bare with me, I’ll keep the math short and sweet). As a hypothetical, let’s talk about a service that your life does not depend on — parks and recreation. An important service, but you’re not going to die if the waste receptacles in the picnic area overflow. Let’s suppose City “A” has a part-time P&R employee working 20 hours a week mowing, plowing, opening and closing parks, doing maintenance, cleaning restrooms, whatever. And then a slightly larger city, called “B”, similarly has a P&R part-time person working 30 hours a week doing the same thing but with more parks to mow and plow, etc. Here’s the math…
City A = .5 FTE (full-time equivalency)
City B = .75 FTE
Their combined FTE is 1.25. Consolidation simply cannot move that number without reducing the quality of service. It’s still 1.25 whether separated or consolidated. This holds true for all sectors, including administration. The FTE requirements remain basically the same because the workload does not decrease with consolidation. This is the case whether it’s park maintenance, payroll, assessing, planning, zoning, road repair…right down to fixing a paper jam in the copier — the work simply does not just go away because of consolidation.
In fact, consolidation would increase costs in the short term. The process alone would be a financial folly. The local governments would have to spend administrative time and money (administration time = most expensive FTEs) on merging and re-writing policy and procedure, accomodating for joint bookkeeping and budgeting, and re-training of the impacted staff. Now pile on the half dozen or more board and committee meetings to negotiate and discuss the details, plus the legal fees for drawing-up these consolidation agreements. Additionally, disparities in compensation between the affected employees in the service being consolidated would likely result in a default to the higher salary level.
It just doesn’t add up to savings, in fact it’s just the opposite.
Where and when local units of government can realize any meaningful savings through consolidation, they’re already doing it…even if those savings are only projected in nature, they’re already examining that option.
Michigan’s governor is pushing bad fiscal policy and practices. This is what happens when a former corporate executive attempts to write financial guidelines for the public sector –he acts as though he’s dealing with vendors, and that he can negotiate a sweeter deal through a bulk rate. But public sector provided services do not have a built-in profit margin –there’s nothing to squeeze. The public sector already operates at-cost. Flint, Michigan is not Walmart.
The only way to lower that cost is to decrease the level of service. It’s economics.
THE PRIVATIZATION MYTH
Under Snyder’s “best practices” for schools he demands districts prove they have “obtained competitive bids on the provision of pupil transportation, food service, custodial, or 1 or more other noninstructional services with a value of at least $50,000.”
What’s happened here is, through privatization, Snyder is now actually adding a for-profit component. Yet, in his consolidation scheme the governor was trying to create savings by imagining he was eliminating a (completely ficticious) profit margin, and now we see in his privatization model he is attempting to insert a profit margin where it simply does not belong!
He’s got friends at the Mackinac Center to help him. They have actually written a how to book on privatizing which was among the materials distributed at the Michigan Department of Education “best practices” training session.
In fact, in their recent rush to privatize services in Michigan’s prisons, the Snyder administration produced legislation that was so sloppy and ill-conceived that it stands in violation of at least two current laws. Bids went out and RFPs flooded in, but there will be no privatization until the resulting legal morass is sorted out. It begs the question: Just who wrote that legislation in the first place? Certainly not anyone familiar with Michigan Compiled Law.
THE HYPOCRISY OF SNYDER’S ACCOUNTABILITY
The ultimate insult to the citizens of Michigan is the glaring double standard Snyder has set: He demands accountability from the public sector on his cockamamie “best practices”, yet turns a blind eye to the notion of demanding corporations demonstrate real job growth in wake of their 1.6 billion dollar tax cut. According to Snyder’s tax plan these supposed “job creators” don’t have to create a single job…not one, nor do they have to maintain much more than an answering machine and and a P.O. box in the state of Michigan. Where’s the accountability in that?
Snyder gave away the store to completely unaccountable corporations –that’s not a “best practice” for Michigan.
Governor Snyder, go to The Dog House!
Amy Kerr Hardin