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We’ve been doing a lot of work on data topics recently and just came across the following quote — one of our favorites about data use in the public sector. “Data by itself is useless . . . You can’t pour data on a broken bone and heal it. You can’t pour data on the street and fix it.  Data is only useful if it is applied for useful public benefit.” Todd Park, United States Chief Technology Officer, March 1, 2012 to August 28, 2014. From a speech on February 27, 2013, at a federal Geographic Information System (GIS) conference.

A constant worry for auditors’ offices is their own independence. The Association of Local Government Auditors (ALGA) deals with these concerns all the time. When performance auditors rile mayors and department heads with negative audits, retaliation can come in the form of budget cuts, slow action on personnel requests or even suggestions that auditor functions be eliminated. David Jones, Seattle City Auditor and chair of ALGA’s advocacy committee, says “We frequently find that local government auditors are under attack.” When Mary Hull Caballero became Portland City Auditor two and a half years ago, she immediately entered a situation in which she felt her office was embattled. The office was working on an audit of the budget office, which was simultaneously discussing her upcoming budget.  That created a very uncomfortable situation. Other tensions quickly materialized. The Portland City Auditor has an ombudsman function and the mayor at the time was displeased with its reports on city agencies.  He began to suggest that the ombudsman office should be eliminated. More problems developed over time. For example, the way the city charter was written, Caballero’s office depended on the city attorney for legal advice, but that office also gave advice to officials her office was investigating. At the end of last year, Caballero began pushing the idea of a ballot measure to protect auditor independence. The Portland auditor’s office had changed substantially over the years, adding a wide variety of new responsibilities. She felt the city charter had fallen behind and didn’t reflect the office that existed in the 21st Century. Although one council member initially appeared to oppose the idea of amending the city charter, the ballot measure was unanimously referred to voters. On May 16th, 86 percent of Portland voters approved the measure.  The amendment to the city charter now provides the auditor with more control over budgeting, human resources and contracting. The office will be getting a new staff attorney, who will operate independently of the City Attorney. The ombudsman office is now protected by being included in the charter. We talked with the City Auditor yesterday about the impact of the ballot measure.  Our edited conversation follows. B&G: We were startled by how overwhelmingly voters approved the ballot measure. You did not campaign aggressively for the measure and did not raise money to promote it. What messages do you take out of this victory? Caballero: I think it’s a reflection of how much the public appreciates independent assessments of government. It’s a reflection of the work that’s been done in this office over the years. I don’t think the measure was hurt when the President fired the FBI director [about a week before the vote]. That was a reminder of how much people appreciate and respect independent assessments. They need information they can rely on that is produced at a very high quality. B&G: What’s been the reaction to the vote? Caballero: Several other auditors have told me they are now looking at revising and updating their charters. Everybody is shocked by the result. It emboldens people. Our power doesn’t reside in city hall. It resides outside city hall. This is an example of how much more beloved we are by the public than by the people in our government. B&G: Portland’s current mayor is much friendlier toward the audit office and function than the mayor who was in office when your term started. Were the changes in charter still necessary? Caballero: I wanted the structure of the organization to protect the employees who work in the auditor’s office. I didn’t want them to have to rely on the strength of any one individual auditor or on having a mayor with an appreciation for accountability. Our current mayor has that. But my goal was to have a structure put in place so that they would be protected organizationally. It’s also important to note that the mere appearance of an auditor’s dependent relationship with the people they’re auditing is a problem. It hurts our credibility if people think we’re not calling the shots we need to be calling. B&G: The city council will still make decisions on your budget. Can you explain what the change to the city charter means, as it relates to your budget? Caballero: What we got in the charter change was an expression of the role that this office plays in city government. It has responsibilities separate and apart from the other elected officials and the budget should be based on the responsibilities of the auditor’s office. That seems squishy and aspirational, but it’s a sea change in the way things have been done. It has changed the way we talk about the budget and the way it will be presented to the council in the future. The council articulates policy priorities like paving streets or getting homeless people off the streets. My office should always be participating in budget cuts for financial reasons, but not for priority reasons. The accountability budget shouldn’t be cut because you want to pave more streets. [Note: More information on the ballot measure is available in a report on the charter amendment from the City Club of Portland. We also wrote a brief blog post in January about the Portland city council’s discussions of this issue before they decided to refer the measure to voters.]

There is an allure to policies that promote purchasing preferences for state or local companies. The idea is that buying local increases jobs and tax revenues. This issue has been playing out nationally, as well as in individual states. This legislative session, we’ve been following several bills in Maine that seek to increase strong preferences for local and U.S materials and Maine contractors. We were interested to see the Maine Association of General Contractors (AGC) oppose two bills, “An Act to Help Maine Manufacturing” and “An Act to Establish the Maine Buy America and Build Maine Act,” and point out numerous problems with a third, “An Act to Quantitatively Evaluate State Contracts.” The bills were under consideration by the Joint State and Local Government Committee. None of this legislation has been passed by the legislature. We talked with Matt Marks, the chief executive officer of the Maine AGC, to get a better understanding of why Maine contractors opposed bills that, at least on the surface, looked as if they’d provide more work for firms located in Maine. The gist of his answer boiled down to the following words: “It’s complicated.” Here are some of the reasons he gave us for his association’s position. If Maine insists on a strong preference for Maine contractors and materials, other states will take the same action. “We enjoy that we can do work competitively in other states,” he told us. “What happens when you give an advantage to in-state contracting is that other states do it, too.” In a letter to the Maine state and local government committee, he wrote: “Any provision that places Maine in a silo for goods or services will lead to legislation in other states that would impact Maine firms. ”It’s very difficult to determine the source of manufactured goods and insisting on Maine or U.S. products adds burden to contractors and cost to agencies. “Who is making the determination of what is considered a Maine good? Is it assembled here? Is it actually manufactured here?” It’s also tricky to determine what constitutes a Maine firm. What if it’s a subsidiary of a larger company that’s located in another state? One concern is that a strong local preference might discourage firms from growing or expanding. It might discourage purchases by larger or international companies that could benefit local business owners. It also could discourage larger out-of-state companies from doing business in Maine, not necessarily the smartest choice for a state that is worrying about a lack of population growth. Often out-of-state firms, which might be discouraged from bidding, provide work for Maine subcontractors and suppliers for jobs that are too complex to be handled exclusively by local firms. The provision of one bill, which identifies a Maine company by taxes paid in the state, limits the ability of Maine contractors to take jobs in other states. Many contractors work in multiple states and need to take jobs, and pay taxes, elsewhere when local work slows down, as it did during the recession. Implementing strong local preference bills is costly and difficult. “Our concern is with the practicality of this. Who is going to manage this? What’s the cost? The intent is good, but the implementation is the problem,” Marks told us.

One of the trickiest tasks in government is estimating the impact of new legislation. Case in point: In 2013, the office of then Pennsylvania Gov. Tom Corbett estimated that by permitting tavern gaming in Pennsylvania, the Commonwealth would generate $93.6 million annually in tax revenues. In November 2013, he signed the bill that legalized tavern gaming, including pull-tab games, daily drawings and charity raffles. Pennsylvania’s excellent Budget & Finance Committee was given the task of computing, on an annual basis, the impact this new form of gambling would have on the state’s lottery. The 2nd annual tavern gaming report was issued in May. Turns out the actual state tax revenue generated by tavern games in 2016 was $1.48 million, with only 56 licensees, compared to original estimates of 2,000.  According to the report, “Expensive up-front license fees, intrusive background checks, and an unfavorable tax scheme have been cited as some of the reasons for low participation among tavern owners.” The Budget & Finance Committee concluded that the small amount of tavern gaming that is actually occurring “did not have a material effect on lottery sales.”

We hear governments boasting all the time about their transparency websites and there is no question that the material that’s posted on the Internet is generally leagues better than in the past. But we have a gripe. There is one transparency topic that appears to be in deep decline – the recording of meeting minutes for work that  takes place in legislative committee meetings, advisory panels, commissions and task forces. Meeting minutes are a great source of information for journalists, advocacy groups, government officials and interested citizens. Yet they are staggeringly uninformative; the governmental equivalent of empty calories. Take a look at the agenda and draft minutes from a California Actuarial Advisory Panel meeting on March 10, 2017 Agenda item: Current Legislation Minutes report of the agenda item. “The panel discussed current legislation.” Agenda item : Recent Public Plan Comments by the Press or Others Minutes report: “The panel discussed recent public plan comments by the press or others.” Agenda item – Emerging Practice for Actuarial Assumptions Minutes report – “The panel discussed actuarial assumptions” If you learned anything truly useful from this, you’re a whole lot smarter than we are. The one silver lining in this example, is that at least the California Board created a semblance of meeting minutes. In many cases, minutes are posted months late or never posted at all.  We feel cheated by websites that promise to provide minutes, but don’t. Take the Legislative Reference Library in Texas. At the top of the web page there’s a tab for committees. Once you click onto the committee page, you’ll see that the clickable words “Committee minutes & related documents” is posted on the left.  Click through and you’ll see, as we did, that the most recent “Committee minutes & related documents” are from the 75th session of the legislature — two decades ago, in 1997. Then there’s the Delaware General Assembly.  At the top of the page on the legislative website, there’s a tab for the Senate. Click there and you see a menu that promises to provide “Meeting Minutes”.  For the 2017 session, there is only one set of minutes for a labor committee hearing that took place in February. But there were many more committee meetings than that. We counted up 48. We checked out the individual committee pages and didn’t find minutes there either.  (For the parallel House page, there are “no records found.”) In Delaware, as in many other states, there is no actual rule that meeting minutes must be maintained. But we still think it’s an important practice. Audio or video recordings don’t provide the same kind of summary information, as they occur in real time. Shouldn’t open meetings held by government bodies provide good written notes of what went on? Isn’t that a cornerstone of true transparency?

To put together the “Which states are the best” video, we read through each governor’s “state of the state” address. The quotes we used in the video are not the only ones in which the governors bragged that their states were number one. Here is a full list of the quotes we collected. (We’ve included the three governors who gave an annual address in 2017, but subsequently left office –  Alabama’s Gov. Robert Bentley, who resigned in early April as impeachment proceedings were just beginning;  South Carolina’s Nikki Haley, who left office shortly after her state of the state address to become U.S. ambassador to the United Nations, and Iowa’s Gov. Terry Branstad, who resigned on May 24 to become U.S. ambassador to China.) Please note that the quotes below were taken from transcripts and may sometimes differ slightly from the video versions. For links to this year’s governors’ state of the state addresses, we used the handy list with links provided by the National Association of State Budget Officers (NASBO). Alabama Gov. Robert Bentley, February 7, 2017 (resigned in early April) “This Administration worked so fast and so efficiently that of the 26 new governors elected nationwide in 2010, we reduced the size of our state’s bureaucracy at the third fastest pace.” “PreK is truly an Alabama success story, our 4 year olds are thriving, and we are ranked Number One in America”. Alaska Governor Bill Walker, January 18, 2017 “We are the largest state in the nation.” Arizona Gov. Doug Ducey, January 9, 2017 “If there’s one thing we can agree on, it’s this: Arizona is, without a doubt, the most beautiful state in the country.” Arkansas Gov. Asa Hutchinson, January 10, 2017 “We have moved Arkansas to number one in the nation in computer science education.” Colorado Gov. John Hickenlooper, January 12, 2017 “We’re the number one state for business and careers, we have the best workforce, and we’re one of the best states for innovation.” “More people attend cultural events in Colorado than any other state, more skiers and snowboarders choose Colorado; we are the best place for outdoor recreation" “Colorado has led the country on moving to cleaner energy sources.” California Gov. Jerry Brown, January 24, 2017 “This is California, the sixth most powerful economy in the world.” Connecticut Gov. Dannel Malloy, January 4, 2017 “Today, thanks to great teachers and principals, our students are some of the best readers in the country.” Florida Gov. Rick Scott, March 7, 2017 “Our job growth rate is growing more than twice as fast as the national rate." “Our economy is booming . . .Florida is on the verge of becoming the job creation capital of the world.” Georgia Gov. Nathan Deal, January 11, 2017 “For four consecutive years, Georgia has been named the best state for business.” Hawaii Gov. David Ige, January 23, 2017 “Our people are among the healthiest in the nation. Our unemployment rate is the third lowest in the country.” “We invested in infrastructure and attracted investment capital.  And guess what? ”We proceeded to create the most desired and successful travel destination in the world.” Illinois Gov. Bruce Rauner, January 25, 2017 “We have the best people and best location of any state in America.” Indiana Gov. Eric Holcomb, January 17, 2017 “ Indiana today stands as one of the top five states in the country for doing business" “Because we’ve created one of the best business climates in the country, we’ve become national leaders in business growth.” Iowa Gov. Terry Branstad, January 10, 2017 (left office May 24 to become U.S. ambassador to China) “We just set an all-time record for ethanol production, set a new record for biodiesel production by an additional 55 million gallons and lead the nation in percentage of electricity generated by wind.” Kansas Gov. Sam Brownback, January 10, 2017 “Our state has record population, record new businesses, record grain production, and record income.” “According to the most recent information from the federal Child and Family Services Review, our state’s foster care program was first in the nation in protecting foster care kids from abuse and second in the nation in safely maintaining children in their homes.” “By many measures Kansas is the envy of the world." “Set in the most productive part of this blessed nation, Kansans enjoy unparalleled sunsets and a quality of life unimaginable to most humans throughout history." “Our people, numbering now almost three million, lead the planet in agriculture, telecommunications, engineering, aerospace, precision manufacturing, animal health, food safety, and composite material innovation." “Kansans are among the most hard-working, well-educated, and charitable people on earth.” Maryland Gov. Larry Hogan, February 1, 2017 “I’m proud to report to you that Maryland has now moved into the top ten states in the nation for overall economic performance.” “Maryland is ranked as the fifth most innovative state in America." “We rank third in the country in entrepreneurial business growth." “Our state has the second lowest percentage of people living below the poverty rate in the nation, and Maryland has the highest median household income in the United States of America.” Massachusetts Gov. Charlie Baker, January 24, 2017 “In fact, for the second year in a row, Bloomberg named Massachusetts the #1 state for innovation.” “Thanks to the hard work of state & local officials, teachers and parents our students are #1 in the nation in both math and reading for the sixth straight year.” Michigan Gov. Rick Snyder, January 17, 2017 “To give you a fact you might be amazed by, but we should be really proud, our state has the highest net-bound inward migration of people with bachelor’s degrees of any state in the Great Lakes region.” “We are number one in the production of 20 different commodities” “Now here is a stat for you as you travel Michigan. I want you to look for those Michigan cows. Michigan cows are the second most productive in the nation after Colorado per cow.” “Michigan had the highest growth in incoming international visitors of any state in the nation from 2014 to 2015.” “Manufacturing. We are simply leading the nation. We have created over 116,000 manufacturing jobs since December 2010. We lead the nation. We are number one both in terms of number of manufacturing jobs and growth rate percentage.” “I’m proud to say we lead the nation in having more industrial designers than any other state. I’m proud to say we lead the nation in having more mechanical and industrial engineers than any other state in the nation” Mississippi Gov. Phil Bryant, January 17, 2017 “According to the U.S. Chamber Foundation, we are the No. 3 state in America for export growth and the second best state for overall cost of doing business.” “Last year, our fourth graders led the nation’s improvement in reading and math” “I am proud to say, we were the first state to submit a Workforce Innovation and Opportunity Act action plan to the U. S. Department of Labor.” Montana Gov. Steve Bullock, January 24, 2017 “We hold the largest coal reserves in the country, and Montana coal production has been higher under my Administration than any previous one in the last three decades. Though, change is on the horizon — driven by historically low natural gas prices, regulatory concerns and changing consumer demands." We also have some of the best wind and solar resources in the country.” Nevada Gov. Brian Sandoval, January 17, 2017 “We are home to the only lithium mine in the U.S.” “I am proud to report that Nevada is the first and only state to allow wagers on e-sports.” New Mexico Gov. Susana Martinez, January 17, 2017 “We are ranked second in the nation in growth for students taking AP exams.” New York Gov. Andrew Cuomo, January 9, 2017 “We have invested more in education than any other time in history and more than any other state in the nation.” Ohio Gov. John Kasich, April 4, 2017 “Last fall, a survey of CEOs named Ohio one of the ten best places to do business.  Last fall.  That’s 34 places higher than we ranked in 2010.” “Forbes ranked us the 11th best state for business.  That’s up from 38th.  So we went from 11th with Forbes, from 38th just five years ago.  And there have been other good ratings, like the one from middle market executives – that’s sort of middle-sized companies — that placed us first in growth in the country.” Rhode Island Gov. Gina Raimondo, January 17, 2017 “By the end of this year, Rhode Island is going to be the first state in America to offer computer science classes in every town and at every public school around the state. Not California. Not Massachusetts or New York. But Rhode Island. We’re first.” “We’re already the first and only state in America with an offshore wind farm.” South Dakota Gov. Dennis Daugaard, January 3, 2017 “Our National Guard ranks number one in the nation for attrition loss rate, number two in security compliance, number three for timeliness in soldier evaluations, and number five for personnel readiness and soldier management.” “We recently launched an online pardon application site – making South Dakota the first state in the nation with a completely online pardon application process.” Tennessee Gov. Bill Haslam, January 30, 2017 “Tennessee’s median household income has grown at the second fastest rate in the country.” “On education, there is no state in the U.S. that is demanding the spotlight like Tennessee. It’s worth repeating: with the incredible hard work of our teachers and students, Tennesseans are the fastest improving in the country in math, reading and as of this year, science.” “Tennesseans pay the lowest amount of tax as a percentage of their income of any of the 50 states.” Texas Gov. Greg Abbott,  January 31, 2017 “We are now second in the number of Fortune 500 companies. And with your help, we’ll soon be No. 1.” “Texas is No. 2 in the nation for women-owned businesses. Our goal is to make Texas No. 1.” “Texas now has more public high schools ranked in the top 100 than any other state. We have the fourth highest high school graduation rate in America. We are second among Hispanic and African-American students, and first among economically disadvantaged students. And the No. 1 public high school in America is in Dallas Independent School District.” Utah Gov. Gary Herbert, January 25, 2017 “I truly could spend all evening simply listing the national accolades that have come our way.” “In the most recent National Assessment of Educational Progress — known as the nation’s report card — Utah’s fourth graders ranked 8th in the nation in Math, 7th in Reading and 5th in Science. And Utah’s eighth graders ranked 8th in Math, 6th in Reading AND were ranked 1st in the nation in Science.” “Utah is now in the top 10 in the nation for electric vehicle adoption and number one for Compressed Natural Gas infrastructure.” Virginia Gov. Terry McAuliffe, January 11, 2017 We made Virginia safer by reforming our juvenile justice system, and posting the lowest adult recidivism rate in America.” “We took action to protect Virginia from the threat of climate change and sea-level rise, winning a $120 million federal resiliency grant for Norfolk and other communities in Hampton Roads. That is the largest grant given to any state in America.” “Our state workforce is the best in America.” Wisconsin Gov. Scott Walker, January 10, 2017 “The percentage of people working in Wisconsin is one of the highest of any state in the country.” “We rank as one of the best states in the nation for health insurance coverage.” “We just started including everyone in the ACT tests and Wisconsin is one of the best states in the country in that category. Students here also have some of the best graduation rates in the country.” “As mentioned, more people are working than ever before in our state. Our schools continue to be some of the best in the country. The University of Wisconsin just moved up in another ranking. Chief Executive Magazine raised Wisconsin up again on the best places to do business – we’re up 30 states from 2010. Our improvement in the tax climate is one of the best in the nation. The economic impact of tourism went up 30% since we took office. Health care systems in our state are ranked in the top three in the country. And our farmers continue to produce some of the best food on the planet – heck, we just won the gold medal for the best cheese in the world.” Wyoming Gov. Matt Mead, January 11, 2017 “In 2016, Wyoming has ranked the best state to start a business, the best state to make a living, and the best state to retire.” “Wyoming continues to be ranked No. 1 among states by the Tax Foundation, for having the most business friendly tax climate.”

Many city, county and state departments collect cash, in various forms. There are fees for licenses, cash collected during events, and money exchanged for the sale of surplus property. We see poor cash-handling practices crop up in audits all the time. The San Francisco’s City Services auditor has focused on this issue over the last few years. It has faulted departments for storing cash or checks in unlocked drawers, for not checking to see if cash collected matched records of goods sold, or for not depositing cash in a timely way. The list goes on and on. Last week, the auditor’s office published a cash-handling bulletin summarizing the problems. We thought the following chart of cash-handling weaknesses and risks would be helpful to many other governments as well. The bulletin also has a very useful checklist. It asks a series of questions to help departments identify weaknesses. A combined report of six audits, earlier this year, describes specific cash-handling problems in greater detail.

Last week, the New York City Independent Budget Office reported on the large number of young men who are incarcerated on Rikers Island, the city’s jail complex, because they are awaiting trial and can’t make bail. The May 16 bail report came to the City Council in a 4-page letter addressed to Rory Lancman, the chair of the council’s committee on Courts & Legal Services. The statistics reported were certainly alarming. Of the city’s 63,758 admitted to the city’s jails in 2016, 78 percent were pre-trial detainees. On an average day, 7,633 individuals were in jail awaiting trial and about 52 percent of those individuals were in jail because they couldn’t post bail, with a median bail set at $5,000. This is obviously not a good thing, and Rikers is far from the only jail suffering from this backlog of cases. But we noticed that there was a lack of  comparative statistics in this alarming document. And although the IBO report provided a link to a similar report in 2011, it didn’t mention that between 2010 and 2016, the number of people admitted to the city’s jails had dropped by a third – from 95,000 seven years ago to 63,758 last year. Looking at the average daily population of pre-trial detainees who could not make bail, there were 4,772 in 2010 and 3,931 in 2016 – 18 percent fewer. The median bail set in 2010 was twice as high — $10,000. According to the city’s Department of Correction, the number of people detained on bail of $2000 or less has dropped by 36 percent since early 2014. There are new strategies to make it easier to pay bail and diversion programs to reduce the number of low risk people who enter jails. Why didn’t the IBO mention the improvement? We talked a bit with Doug Turetsky, chief of staff and communications director there. He agreed that arrests are down in the city and mentioned the efforts underway to decriminalize misdemeanors, as well as the ongoing effort to move lower-risk pre-trial detainees out of jail.  The report, he says, “was a snapshot of 2016. That’s what we were asked to do. That was what was agreed to.” The statistics still show “a substantial share of people who are sitting in jail are sitting there because they can’t make bail,” he says. We agree that this is a troubling. But we’d still like to see more acknowledgement of the progress that’s been made.

On Wednesday, Kim Reynolds became Iowa’s first woman governor and the 43rd governor in the state’s history. She replaces longtime Gov. Terry Branstad, who resigned to become the U.S. Ambassador to China. Gov. Reynolds, who brings the total of women governors to six, has been Lt. Governor since 2011. Her four priorities will be tax reform, energy innovation, education and workforce training, according to yesterday’s article in the Des Moines Register. For Iowans who want to be see their new governor on a less formal occasion, here is a 2014 video of then Lt. Gov. Kim Reynolds accepting the ALS “Ice Bucket Challenge” from then Gov. Branstad. (In 2014, 17 million people took the “ice bucket challenge” and 2.5 million people donated $115 million to the ALS Association, a national non-profit organization that fights Amyotrophic lateral sclerosis, more commonly called Lou Gehrig’s Disease.)

Back in 2009, we suggested in a short Governing piece that it was okay to use public funds to buy flowers for a sick employee or an employee’s close relative. We thought the good will that came with the gesture paid a useful dividend to a public entity for a small price. We were bombarded by reader correspondence disagreeing. We’ve discovered over the years that both taxpayers and most state and local employees who contact us have a clear – almost puritanical – line that they draw when it comes to spending public money. While articles abound about wasteful spending, the limits on compensation, gifts, and extra perks are actually pretty tight. But the situation gets a lot fuzzier when contractors work with the public sector. There is a clear double standard here. In our experience, compensation and other spending decisions that would elicit fury in a government setting are often accepted for private contractors doing government work. We suspect that when flowers are sent to sick private sector employees doing public sector work, the gesture doesn’t elicit much criticism. The difference in expectations and practice was highlighted for us last weekend when we read the May 2017 audit of a quasi-governmental body that delivers managed care services in North Carolina. This case is particularly interesting because Cardinal Innovations Healthcare  was created by the North Carolina legislature as one of seven “Local Management Entity/Managed Care Organizations”. It’s responsible for delivering behavioral health care and substance abuse services in 20 counties, serving 850,000 individuals. One question that the audit explores: Is Cardinal a government entity or not? We’ll skip the details of the discussion. In short, the auditor makes a case that as a “local management entity” Cardinal Innovations should more closely follow government rules. Its “unreasonable spending,” the audit says, “could erode public trust.” The spending that’s described goes well beyond flowers. As of July 1, 2016, the entity’s Chief Executive Officer was paid a $635,000 annual salary. In the audit, Cardinal was criticized for holding lavish Christmas parties, attending luxury hotel retreats, using chartered flights for travel, and allowing questionable credit card expenses. One Christmas party in FY2016 included 75 attendees, at a cost of $242 each. Adding fuel to the auditor’s complaints is the fact that based on the per capita rates for each Medicaid individual served, Cardinal was able to save $70 million in FY2015 and FY2016. That’s the difference, the audit explains, between the amount of state and federal Medicaid money received by Cardinal and the amount paid out in its spending on Medicaid claims. In its response to the audit, Cardinal Innovations argues that it has been adhering to government rules. It says it is a “local government entity” as well as a Managed Care Organization (MCO) and a contractor to the state. It adheres, it says, to North Carolina’s Open Meetings Law, the Public Records Act and the Local Government Budget Control Act. On the other hand, it argues that its spending is in line with what is required of a contractor and MCO that needs to keep a board of directors engaged and needs to compete with private sector companies. It defends compensation practices that are needed to offer “competitive salaries to attract and retain talented professionals.” Of course the specifics of this case may not be precisely paralleled elsewhere. But the question of a public sector vs. private sector double-standard on spending is well worth considering.

States vary tremendously in the health care benefits offered to retirees. These differences are nicely spelled out in a May 2017 brief on retiree health care from the National Association of State Retirement Administrators and the Center for State & Local Government Excellence. (Retiree health benefits are, by far, the major component of Other Post-Employment Benefits (OPEB). Here are five facts we pulled from the brief: 80 percent of states provide health insurance to retirees under the age of 65; 70 percent do for those over 65. (For Medicare-eligible retirees, state coverage is typically secondary.) Long-term liabilities for OPEB for the 50 states totaled about $626 billion in Fiscal Year 2015. Only 7 percent of those long-term liabilities are funded. The vast majority are paid for on a pay-as-you-go basis. The state that has, by far, the most assets set aside for OPEB funding is Ohio, which administers retiree health programs for nearly all public employees in the state. Its $17 billion in assets represent 40 percent of the 50-state total. (We know from our own research that Ohio’s strong performance, relative to other states, stems from decisions made to set aside funding, starting in the 1970s.) States vary tremendously in the size of their liabilities. Ten states bear about 77 percent of total OPEB unfunded liabilities. They are New Jersey, Texas, New York, California, Illinois, North Carolina, Connecticut, Pennsylvania, Florida and Massachusetts. States spent about $18 billion on retiree health care costs in Fiscal Year 2015. This represented about 1.4 percent of state spending (excluding federal funds and bond funds). But the percentage varied greatly depending on the state. For New Jersey, OPEB costs were 5 percent of state spending. For slightly more than half the states, this category of spending represented less than 1 percent of the total. The NASRA brief focuses on the cost of retiree health, the extent of state liabilities, and the relatively modest effort at funding. It also provides some detail on the difference in approach used — whether states pay their retirees health premiums (or a portion of the premium); whether they make a fixed contribution or whether they allow retirees to be part of their state insurance pool. This last option, which is generally the least costly for states, means that retirees have an “implicit subsidy” because they are included in a plan with younger, healthier individuals. For more information on the benefit side, we recommend a report on funding trends and plan provisions, published a year ago by the State Health Care Spending Project, an initiative of the Pew Charitable Trusts and the John D. and Catherine T. MacArthur Foundation.

Recruiting millennials and Gen Z to government requires lots of creativity. As we’ve written in Governing, non-profits often look more appealing than city jobs to younger workers. There are multiple reasons. Some experts talk about disillusionment with government, stodgy and rigid hiring practices or even uncertainty about how to apply. There’s another important reason. Many young people have no idea of the vast variety of jobs in city, county and state government. “There are a lot of things we do that people don’t know about. They don’t know how it benefits the community,” says Robert Neiuber, human resources director for the City of Rancho Cucamonga, CA, near the San Gabriel mountains in San Bernardino County. His city has tackled this problem with a series of videos to show the variety of city jobs. Here’s one we particularly like, with arborist Lucas Mitchell talking about his job, while sitting in a tree. The next video, gives a sense of what life is like for Jodi Silsbee and Gary Ablard, two Rancho Cucamonga employees who work in Community Services, Cultural Arts.