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- The Problem of Lagging Inspections
Our prediction: Over the next months, a cascade of news stories will focus on the government functions that have been neglected as the pandemic has distracted public sector employees from work that was deemed essential for health and public safety in the recent past. One of our worries, based on a plethora of similar findings in audits around the country, focuses on building and other safety inspections. This is not just a pandemic-era problem, but logically the distractions caused by the pandemic may worsen an already troublesome area. In late September, an Oakland audit found only limited progress on mayoral task force reforms that had followed the tragic 2016 Ghost Ship fire in which 36 people were killed during a concert at an illegally converted warehouse. While the audit credited the fire prevention bureau for making progress in identifying at-risk properties, it found inspections were still falling far short. For example, between September 2018 and September 2019, three years after the tragedy, the fire prevention bureau was still inspecting just 26 percent of all facilities required by the state. Ten days ago, a news article in New Orleans noted that one year after the fatal collapse of the Hard Rock Hotel, the city was still having continued inspector shortages and difficulties in hiring. The Hard Rock tragedy, in which the top floors of the hotel “pancaked” during construction, resulted in three deaths, demotion of the building safety and permits director and accusations against two inspectors for the falsification of inspection reports. The article cited a recent internal audit that found 82 percent inspection record compliance, but also addressed “some instances where inspectors’ vehicles were not at a site when an inspection supposedly happened… or inspection photos were filed a month after the inspection was supposedly done.” Another example: A September Dallas audit cited a lack of monitoring of inspections and maintenance service contracts for the city’s elevators. The audit found that the Departments of Aviation, Building Services, and Dallas Water Utilities could not supply evidence that the elevators for which they were responsible were included in inspection and maintenance contracts. The audit warned of an “increased risk that elevators are not safe for public use.” That month, another Dallas audit found improvements needed in the inspections of both public and private fire hydrants. Problems included an inaccurate count of fire hydrants, inadequate monitoring of repairs and a lack of documentation of inspection spot checks. These are just the most recent examples we have in our files about inspection issues. In recent years, we’ve spotted audits that detail inspection weaknesses in such cities as Atlanta, Berkeley, Houston, Nashville, and Richmond.
- The Post-Pandemic Transition: What the Experts Say
We have five major takeaways to share from today’s post-pandemic transition webinar, which was moderated by Rich Greene, half of the Barrett and Greene team. The webinar was a joint production of the Government Finance Research Center (GFRC) at University of Illinois Chicago, where we are senior advisors, and the American Society for Public Administration, with which which we have often worked on webinars in the past. Mike Pagano, director of the GFRC, led a moderated conversation with panelists Mark Zandi, Chief Economist at Moody’s Analytics; Amy Liu, Vice President and Director of the Metropolitan Policy Program at the Brookings Institution, and Don Kettl, Sid Richardson Professor at the LBJ School of Public Affairs, University of Texas and Senior Fellow with the Volcker Alliance and with Brookings. Here are our top takeaways. · Don’t hold your breath waiting for a return to normalcy. The pandemic has spurred transformational change and a full economic recovery will take several years. “I suspect we’re looking at the end of 2023,” said Zandi. “This is going to be a slog,” · Major governance stresses – including the fraught relationship between governments -- will need massive attention to successfully deal with a host of post-pandemic issues. Front and center are growing worries about geographic and racial inequality and the fact that the pandemic and related disruption will create a host of winners and losers with the losers often coming from those who were worst off prior to 2020. “We need to do much better at creating basic governance strategies,” said Kettl. · The transformation of the way people work will continue, hitting downtowns hard, changing transportation patterns, decreasing business travel and shifting residential needs. (Think houses with more office space). Pressures on downtown areas will also build opportunities for regional development outside of big cities. “Consumer preferences are changing; the way people are buying food is changing; the way people shop is changing,” said Liu. · Success will come quicker to cities that have strong philanthropic and business sectors and solid public-private partnerships to facilitate working together to deal with inequality issues and the highly needed task of increasing more inclusive opportunities. · On a pessimistic note, citizen trust in government, which is needed to deal with countless developing problems, is at a low ebb. On an optimistic note, there is a genuine effort to recognize longstanding racial issues, the importance of inclusive entrepreneurship and the need for a focus on working together to address structural inequality.
- Don't Miss This Webinar
We’ve moderated or been panelists in a seemingly endless number of webinars over time. The last few months, as live conferences have swirled away into the maelstrom of the pandemic, their number has multiplied. With that in mind, we wanted to let you know about a webinar that we think should appeal to anyone who finds their way to the Barrett and Greene, Inc. website. titled “The Post-Pandemic Economic Transition: An All-Star Webinar”. It will be held on October 14 at 1 p.m. eastern time and has been a collaboration between the Government Finance Research Center at the University of Illinois Chicago and the American Society of Public Administration. A little about this event: The coronavirus pandemic is likely to dissipate at some point in the foreseeable, if uncertain, future. But experts agree that the economy will continue to suffer for years thereafter. With that in mind, the panel will focus on the transitional period between the eradication of the disease and the full rehabilitation of the economy. What challenges will states and localities deal with in that interim period? What solutions can be conjured to those challenges that are anticipated now? Panelists will include Michael Pagano (Moderator) Dean, College of Urban Planning and Public Affairs, University of Illinois Chicago and Director, UIC's Government Finance Research Center; Amy Liu, Vice president and Director, Metropolitan Policy Program, Brookings Institution; Don Kettl, Sid Richardson Professor, LBJ School of Public Affairs, University of Texas and Senior Fellow, the Volcker Alliance; Mark Zandi, Chief Economist, Moody’s Analytics and Richard Greene (co-moderator), senior advisor of the Government Finance Research Center and principal, Barrett and Greene, Inc. To register: https://www.aspanet.org/webinars#PostPandemic For Queries: GreeneBarrett@gmail.com
- The Great Transparency Conundrum
For years, we've written about efforts by states and localities to provide greater transparency. Dashboards are popping up like numerical dandelions; webinars have become prolific during the pandemic; and data points are growing at a rate that renders some almost unusable. But with all the information out there, why -- we wonder -- is it growing increasingly difficult for academics, analysts and journalists to solicit the kind of background information that only comes from human contact? Just for starters, have you tried online to find an e-mail address for a public sector official. Try for a handful and -- depending on the place -- we pretty much guarantee that you'll wind up frustrated in at least a couple of cases. This may be attributable to a fear of hacking, but it feels like a tragedy of the modern era to us that government employees are increasingly out of reach. Next step is to make a phone call, right? But phone numbers are even harder to find than e-mail addresses. (And we've been at this for decades -- pity the poor layman who is trying to talk to government in writing or telephonically.) Some governments use fill-in-the-blanks forms to reach a source. It feels kind of efficient to send in a request that way. But the sensation is the opposite while awaiting a response. Are you having the same experiences as we are? Let us know
- How have local audit shops evolved during the pandemic?
Multiple changes are affecting local government auditors as they adjust FY2021 audit plans, change work habits and contemplate potential large budget reductions. Several surveys of local shops over the last five months detail some of the major changes. The most recent survey was released by the Minneapolis internal audit office at the end of August and included responses from 23 peer audit shops around the U.S. Among the findings: · Given telework experience during the height of the pandemic, more than half of audit offices plan to “formally implement remote work” going forward. Only 14 percent said they would not do that. More than 80 percent envisioned a future work environment that would be a hybrid of work at home and in the office. · The majority of respondents had not previously considered a pandemic or other long-recurring event in disaster recovery or business continuity plans. Only about a quarter had done so. About half are now revising plans to include the potential of a pandemic going forward. · About half of respondents said their audit plans had changed because of the pandemic and another 26 percent said they were intending to make changes; 57 percent said they had currently performed or were planning an organization-wide risk assessment. The following areas were identified as the major “high risks” in the current environment: IT and cybersecurity; police and public safety, human resources; finance and payroll and health. A similar survey was conducted between April and June by the Austin City Auditor. It found that some audit work was being delayed because of staff or auditee availability and that audit shops were turning to projects involving a shorter duration and narrower scope. There was a general focus by auditors on finance and internal controls. Several surveys of both private sector and public sector audit shops also have been conducted in recent months by the Institute of Internal Auditors (IIA). The IIA surveys reveal accelerating worries expressed by public administration audit organizations about budget issues. In a survey conducted in April 2020, 21 percent of public administration audit shops expected a decrease in their budgets. But in a survey two months later, half said they expected to experience budget reductions over the next 12 months.
- A Q&A with Mathematica President Paul Decker
We started writing about performance measurement and evaluation three decades ago, roughly around the time that Paul Decker, the president and CEO of Mathematica, began his illustrious career in program evaluation, data analysis and public sector policy and management. For the last 13 years, he has led one of the world’s largest public research organizations with the mission of its 1400 employees focused on improving public well-being. Our interview with Decker was one of several we conducted with Mathematica researchers for our new book, The Promises and Pitfalls of Performance-Informed Management (Rowman & Littlefield, 2020). At the time of the interview we were working on our chapter about evaluation. Here is an edited version of the conversation. Q. What were your first experiences like in the field of performance measurement and evaluation? A. My initial exposure was the JTPA system, the Job Training Partnership Act. That was highly representative of the old world. The data weren’t readily available and the adjustments that were intended to turn outcomes into impact were simplistic, crude and not well understood by people in the field. Cream skimming was a fact of life that you had to deal with there. If you wanted a high employment rate, you could select people who had a high probability of being reemployed. In that kind of program, self-selection is a factor, too. People who have more employment barriers are less likely to show up for training. It’s the nature of the beast. The JTPA existed in a world where we were trying to make people’s lives better by intervening. The challenge was finding what happens in the absence of the intervention. It was an unsatisfying system. It was expensive and it didn’t generate clarity. Methodologists had no confidence that it was really giving an accurate impression of performance. Mathematica President Paul Decker Q. What do you see as the biggest changes that have occurred over time since those JTPA days? A. What’s changed over time is the greater availability of data. Programs back then didn’t have extensive administrative records. They now do and the data are likely to be better. Measurement and evaluation are a lot cheaper than they used to be. You’re dealing with databases that get updated frequently so it’s a dynamic picture -- a flow of data, rather than a very static snapshot. The data is richer and timelier. That feeds into more of a continuous improvement approach. It better fits the need of program administrators. We’re not where we want to be, but things are moving a lot faster than they did. The numbers part of the picture has really been transformed and needs to be more heavily integrated into the management processes. Q. What are the big differences in how performance measurement and evaluation are used in different levels of government? A. In recent years data have been leveraged in a more intensive way at the local and state levels versus the federal government. That’s because cities have the data on people’s everyday experience. How quickly is snow being cleared from streets in the winter? How effectively is crime reduced and are we becoming safer over time? By paying attention to the data, you can quickly have an impact on people’s lives and that’s of interest to mayors because they want to improve the lives of their constituents and also be reelected. I’m talking primarily about the most data-forward cities. The average city probably hasn’t made as much progress. . But the most innovative cities – New York, Chicago, and Kansas City -- have been thinking about this, not only from the perspective of what data do we bring to bear but how do we make administrative changes in light of the data we see. It’s harder at the federal level. I think the idea of integrating data into public management hasn’t been advanced as quickly as at the city level. They’re working that out, but it’s often the research office in a federal agency that does this, while the people in the program offices will need to rely more on data in the future. States are kind of in between. They still don’t have the resources to fund the evaluations.) But I imagine that will change, too, as the cost of research comes down. Q. Almost five years ago we wrote a column in Governing about the tension between evaluation and measurement. It was called, “Government’s Data-Driven Frenemies.” Individuals in both fields were trying to figure out how to improve programs, but they didn’t quite trust each other. Is that what you observed? A. In the old world, we tended to have this attitude that on the one hand there was performance measurement and on the other there was evaluation. But they weren’t completely separate. People understood that if you want to transform performance measurement, you have to think about the concepts that we think about in evaluation – about causality or what would have happened with the absence of the program. I think frenemies is a fair characterization. On the performance measurement side, if you didn’t understand some of these concepts you could mislead people into thinking the program was doing something it wasn’t doing. You’d have positive outcomes, but you might have had those outcomes even without the program. There was skepticism about the ability to really conduct effective performance measurement without a recognition of evaluation principles. The critique in the 1980s and 1990s was that there was no way to get at impact except by using random assignment. Q. Do you think the tensions between evaluators and performance measurement folks have dwindled? A. I think more and more these two concepts become intertwined. They’re blending into each other and the idea of frenemies becomes passé. All of this gets better with new technology and new data. But it’s a work in progress. Research offices work really hard on identifying causality and the impact of programs and do it in a way that’s relatively detached. Program administrators don’t have that luxury. They have to make the program work more effectively every day. This is the nascent phase of the transformation – putting this more in the hands of public managers. And bringing the effort to analyze impact into a very central part of their day to day management. This will become a critical part of management, but it’s not embedded in systems yet. This is in transition. Q. Do you see more impact evaluation being done by practitioners as opposed to research organizations or departments? A. There are more and more parts that will be embedded as management responsibilities. In the past, if there were questions around ways to reduce participant attrition in a program, a manager might have relied on a participant attrition expert. Now, I think the first step for a program manager would be to see whether the data can be used to formulate a strategy to reduce attrition rather than simply relying on someone’s expert judgment. This is definitely changing relationships. The history of Mathematica’s business is doing work on contract to research offices. We had relatively little contact with program managers 30 years ago. If there was an evaluation, public managers would be engaged in the discussion, but we weren’t working closely with them or providing guidance on how to use data. Because of this transformation, we now can provide guidance directly to program managers. It’s transforming who our clients are. We’re not just focused on evaluation for policy makers or Congress on how to set policy based on the big evaluations we do. Program administrators become potential clients too as we answer a broad array of administrator questions with data and insights. Given the changes that have happened, evaluation should be faster and cheaper. Rapid cycle testing is nested within that. You want to try things, evaluate and adjust. You don’t want to always have spent five years to generate evidence. You do it more quickly and spend a fraction of what you would have spent in the past. Q. Do you have an example of the rapid cycle testing that you’re talking about? In urban school districts, there’s a widespread issue of teachers having high absentee rates as the school year is winnowing down. With rapid cycle evaluation, you can test out different interventions in different schools and even use random assignment to do that. Not many program managers think in those terms yet. That’s not changing any time soon, but I think that’s where we’re going. Q. We’ve heard so much about evidence-based policy in the last few years. How much effect is this movement having? A. I think the emphasis on evidence has had an effect to some extent. But it has to be embedded into the public management process so that program managers are using data as effectively as they can to manage their programs. It’s one thing to get people talking about evidence-driven program implementation or management, but it will take time to make it a reality. You must have the right skills and culture. Having the right data is also an issue. That’s why I say we’re in the first half of the first inning of this game. A lot of things must happen for the game to progress. If you don’t have a culture of embedding this in day-to-day program administration, you aren’t thinking hard enough about the data that would drive change most effectively. A lot of the data that’s needed is some of the hardest data to get.
- Avoiding "Oversight Light"
As we pointed out in our July 9, 2020 Route Fifty column about police oversight, many communities that clamor for civilian oversight of police have been disappointed by the results. Setting up a civilian oversight board is only a first step. How well it operates depends on multiple factors. The policies that guide the board’s operation are critical – for example, the responsibility of the police department to respond to recommendations and the organization’s power to access information. But basic operational elements also can have a significant impact -- the experience and competence of the executive director and staff; continued community involvement; training of board members; insulation from politics; independent legal counsel, and ongoing and adequate funding. When we interviewed Liana Perez, operations director for the National Association for Civilian Oversight of Law Enforcement (NACOLE), she noted that The City of Miami had an effective model that provided it with the authority that many other civilian oversight bodies lacked. We turned to Cris Beamud, executive director of the Miami Civilian Investigative Review Panel, for the elements she defined as important in heading up an organization with impact. Beamud has broad law enforcement experience with a stint early in her career as a Rochester, New York police officer and later, after law school, work as a prosecutor and a police legal advisor. Before coming to Miami in 2013, she also had experience setting up a civilian oversight auditor’s office in Eugene, Oregon and a civilian review board in Atlanta. Here is an edited version of our conversation. Q. Is there any one model of oversight that is most successful? A. There are many different approaches – auditor and monitor models and investigative models, but it has to be tailored to what the community needs. If the community considers robust internal investigation lacking, then you need an investigative model because internal affairs isn’t doing a good job. Or, it may be that investigations are fine, but the analysis and adjudication is weak. Then you need different elements. Usually, it’s a hybrid. Q. Can you point to some of the key elements needed when oversight is established? A. This has to be well funded. A weak and underfunded board is oversight light. It’s almost like a political trick. When I first came to Miami, the budget was $350,000. The budget had been cut in 2008 and 2009 during the economic crisis and we were very low and understaffed. By 2018, we had risen to $700,000 and then a new ordinance was passed so that we now receive 1 percent of the personnel line of the police department. That’s a good way to do this. Our budget is now $1.1 million. That enabled me to hire an assistant director and a policy person, in addition to our two investigators, an administrative assistant and myself. We can do much more robust policy work and much more community outreach. We have constant information dissemination to make sure we don’t fall off the radar. Q. Do you have recommendations about staffing an oversight body? A. Sometimes a review board may be too heavily staffed with people who have loyalty to the city as a whole. If you hire someone from the city law department to be director or independent council, their thinking can be shaded by their loyalty and past duty to protect the city. That can make for problems. I also knew it was important for us to have our own independent counsel and not rely on the city’s lawyer. That’s expensive, but it means we have a great law firm that helps us, and we are free of ties to the city’s law department. Q. What about selection of the board? A. With the inception of the Miami Citizen Investigative panel, board members were nominated by the community organizations that had pushed for its formation. They were approved by the city commission, but they weren’t selected by the commission. Now, the panel has its own nominating committee. By taking selection out of the hands of elected officials, it removes some of the politicization of the board. You have to put some distance between the elected officials and the people who serve on the board. One change in the process here was also to require that two members come from each of Miami’s five political districts. In the beginning, too many panel members came from wealthier districts rather than representing the diversity of the community. Q. Are there ways of ensuring that the organization that’s been created fulfills its mission? A. After it has been established and has an adequate budget, strong personnel and an independent council, the community needs to stay involved. It’s important to have a constituency that is supportive and helpful. They can see if the board is becoming less probing or is unfair. Sometimes, executive directors will be reluctant to say somethings is going badly. So, it’s good for community organizations to stay involved and to assist the board on staying on point and on track. It’s important for people to keep an eye on what’s going on so that it continues to run well.
- Cybersecurity: States and Cities Shouldn't be Distracted
While it is possible to put off other problems, no government can afford to ignore cybersecurity. Yet, many local governments are woefully under prepared for a cyber-attack according to a piece we’ve written for the Government Finance Officers Association journal, GFR (p. 90) We recommend that you read the full piece; that which follows in this blog item should convince you of that. A 2018 survey from Public Technology Institute noted that only 35 percent of local government IT departments had a strategic plan for cybersecurity. Last year, another small survey referenced in a report by PTI and the National League of cities revealed that 80 percent of respondents identified lack of funds as a barrier in achieving the highest possible level of cybersecurity. In a day when the nation is riddled with woes and fears – and coronavirus justifiably dominates the headlines -- this is an issue that shouldn't go on a way back burner. As we wrote, “While it may be possible to put off other problems for local government, no government can afford to ignore cybersecurity. . . It’s not like you can say we’re small and nobody will pay attention to us,” said Teri Takai, co-executive director of the Center for Digital Government. . . “There might be several hundred attempts (at cyberbreaches) in any given day,” said Meredith Ward, director of policy and research at NASCIO, the National Association of State Chief Information Officers. “Someone will be knocking on your door all the time.” NASCIO and the National Governors Association are trying to confront the issue. At the beginning of this year, they published a report about ways states can help local government with cybersecurity. It indicated that about two-thirds of the states provide cyber-security services for their local government, but only a little a third of the states market those services, putting the onus on states to do more outreach, Ward told us. Not to put to sharp a point on it, but it feels to us like there’s a certain similarity toward local approaches to cybersecurity and their pandemic preparedness. They all know that they ought to be doing something, but it’s all too easy to put off until disaster strikes.
- Why a Thriving Economy Can’t Pay the Bills
It’s been quite a puzzler to us. Unemployment rates have been dipping for about a decade, and the economy is expanding, while wages have gone up. Even revenues in almost all the states have been rising. How then is it that so many Americans are feeling under fiscal pressure? Don’t rising tides lift all boats? No, not if the boats are leaking. A fascinating article in The Atlantic describes the issue as “The Great Affordability Crisis.” Here’s the crux of the piece, by Annie Lowrey, which we recommend highly: “This crisis involved not just what families earned but the other half of the ledger, too—how they spent their earnings. In one of the best decades the American economy has ever recorded, families were bled dry by landlords, hospital administrators, university bursars, and child-care centers. For millions, a roaring economy felt precarious or downright terrible. “Viewing the economy through a cost-of-living paradigm it helps explain why one in five adults is unable to pay the current month’s bills in full.” We’re sure that some economists will disagree with this piece. In our experience, it’s rare to find any thesis that is proclaimed without some economists finding flaw. Sometimes, they’re right. But we’re not economists and found the piece persuasive. Take a read and decide for yourself. If you agree or disagree, please write us care of this website.
- Introducing: Our new performance management book!
For thirty years, we've watched governments struggle to put performance management theories into practice. Our observations, supplemented by dozens of 2019 interviews with practitioners, academics and performance experts, will be available this month in our new book, Making Government Work: The Promises and Pitfalls of Performance-Informed Management. It's the first in a multi-part series, published by Rowman & Littlefield. The publisher's web page for the book is https://rowman.com/ISBN/9781538125670. The American Society of Public Administration (ASPA) kindly hosted a "Book Talk" for us on January 9, moderated by Scott Pattison, former executive director of the National Governors Association and now a principal at Pattison Strategies, LLC. We had a great time and are grateful to ASPA for giving us the opportunity to talk about both the benefits and challenges of performance management. A link to the webinar will be available soon.
- Bureaucracy: The Devil of Small Details?
When was the last time you heard anyone say, “Gee, what an excellent bureaucracy we have in our Department of Motor Vehicles. It only took me fifteen minutes to get a new driver’s license.” Probably never. In fact, the word “bureaucracy” is most frequently used as a pejorative. Consider this from President Donald Trump: “Getting things done in this country, if you want to build something, if you want to start a company, it’s going to be virtually impossible with all the bureaucracy and all the approvals.” Along the same lines, author Franz Kafka said, “Every revolution evaporates and leaves behind only the slime of a new bureaucracy.” The list goes on and on. But from our perspective – after covering state and local government for decades, the bureaucracy is little more than the apparatus that keeps government running; it consists of men and women who tend to work very hard and take the idea of public service seriously Without them, we’d be left with a bunch of policies and programs, without any progress on implementing them. There are, of course stifling bureaucracies as well as hugely efficient ones. But we take umbrage at the idea that the thousands of men and women who labor at getting the real work of government done are in league with the Devil of Small Details. We posed this opinion on LinkedIn and Twitter a few weeks ago and were startled at the overwhelming – if not universal support for our perspective, The LinkedIn post got thousands of views, leading us to believe that we had struck a very responsive chord. A few sample comments: Michael Jacobson, deputy director of performance and strategy at the King County Office of Performance, Strategy and Budget, wrote, “I like using the word bureaucrat as a positive concept, as in a rational long-term thinker and as a counter to the ephemeral and political. Bureaucracy, alas, retains a negative vibe even to me, despite its potential to ensure equity, consistency and thorough application of rules and regulations.” Yves Genest, vice president of products and services at the Canadian Audit and Accountability Foundation, added his thoughts: “Bureacracy. . . is just a word to describe how we organize purposeful activities. It was first invented by the military 10,000 years ago. It wins wars, builds roads and schools, manages the justice system, provides social services . . . It gets things done. Like democracy it's not perfect, but after 10,000 years, it's the best way we've found to make our life better. The former Kansas City auditor and mayor and recent publisher of Governing magazine, Mark Funkhouser, was compact: “I am a bureaucrat,” he wrote, “and proud of it.” One theory for the reason why the bureaucracy has gotten a bad rap was set forth by Christopher Tyler Burks, a Ph.D student at American University and an ASPA Founders’ Fellow, who offers this thoughtful theory: “Public bureaucrats have been maligned for partisan reasons. There is no amount of performance improvement amid decreasing resources that a bureaucrat can achieve to satisfy a partisan who views the bureaucracy as the problem and enemy ("Starve the Beast"). Of all the responses we received, one of the most interesting to us came from Kil Huh, who leads the Pew Charitable Trust’s much-praised work on fiscal and economic policy, He wrote, “Max Weber a German sociologist once argued that [bureaucracy] was the most rational way to organize society. He wrote at a time when government was doing cutting edge stuff. Now things like hierarchy, division of labor, rules, [and treating] people like widgets seems so tired. “That said, I still believe in government and bureaucracy to be careful, thoughtful and fair. But what Weber loves about it seems antiquated. Just my two cents.”
- A Border War Truce
We’ve long thought that the competition between states for economic development, largely in the form of incentives, can be counterproductive. We’ve seen little evidence that tax abatements have been the most important factor – if a factor at all – when companies decide where to move or remain. And yet, the so-called “war between the states,” has continued largely unabated. What’s more, anecdotally, we’ve heard of a number of instances in which a company has already decided on the state to which it will move, but then fishes around with others, creating a kind of bidding war that doesn’t change the outcome, but does mean that the winning state gets less out of the deal than it might have without this kind of competition. Now, however, Missouri and Kansas have taken steps to create a ceasefire. After discussions between the two states, on June 11, 2019, Missouri Governor Mike Parson signed legislation restricting the use of economic development incentives for companies on the border of neighboring Kansas. The Governor was quoted in a press release as saying, “Incentivizing companies to move a few miles doesn’t result in new jobs for the citizens of Kansas or Missouri, and it takes state resources away from other priorities.” As the governor was quoted as saying in Missourinet, “I think Missouri has spent well over $100 million on this border war and Kansas has spent well over $100 million.” The Missouri bill, as you might expect, was contingent on passage of a reciprocal agreement from Kansas. Following an executive order signed by Kansas Governor Laura Kelly in early August (see above photo), the law will go into effect on August 28, 2019. As the executive order read, “no state-level economic development incentive programs under my jurisdiction shall be used to incent businesses with jobs currently located in the Missouri Counties of Jackson, Platte, Clay or Cass to relocate those existing jobs to the Kansas Counties of Johnson, Wyandotte, or Miami. Although this pair of bills were initiated by the well-known issues behind the “border wars” between the two states—and is limited to border counties — it certainly feels like a model for other states in similar circumstances; and a model.











