The Shell Game of Corrupted Government Exposed
Our County Commission needs to get a grip on reality and change their mindset
Publisher's Note: This article, from our friends at the Beaufort Observer, is a perfect primer for county commissioners, and those who wish to become one.
We either sat through or watched the videos of all of the County's budget workshops. When you back away and look at the sessions as a whole there is a remarkable fact that strikes us: Most of these people, at least six of them, just don't understand reality. Those six are Chairman Jerry Langley, Ed Booth, Robert Cayton, Al Klemm, Jay McRoy and Paul Spruill, the outgoing County Manager. The proof of this conclusion lies in a simple fact: This year's budget process was pretty much the same as the previous year's...and the year before. The only real difference is that they have much less in their reserve account so they simply plan to raise taxes. Indeed, the County Manager announced in one of his obtuse presentations that "what we have is a revenue problem." The County Schools folk did the same thing, listing the "cuts" from the state as justification for raising taxes, thereby exhibiting a mindset that the revenue shortfalls should be made up by raising local property taxes.
But the reality is that these are not normal times.
The majority of the Commission was willing to review line item by line item but not willing to make any major cuts in spending. The oblivion to reality was most obvious when they got to the "handouts" sought by various special interest groups. If a group was funded last year the presumption was that it would be funded again this year, perhaps with a few marginal reductions which do not amount to the proverbial "hill of beans."
What was clearly missing in all this was even the slightest indication that our leaders understand the reality Beaufort County faces these days.
First, that reality is that many of the most productive citizens in the county--the ones upon whom our economic future will depend most--have just experienced substantial tax increases from the so called "revenue neutral" revaluation. Some small business commercial property tax bills have doubled at a time when these businesses are struggling to survive. What sense does it make to raise their taxes again with a ten percent rate increase on top of a valuation increase last year and give money to help special interest groups that "need" more money?
Consider just two of these groups the Commissioners decided to give donations using your money: The local chambers of commerce and the Turnage. We know several local businesses who had to forego joining the chamber the last couple of years because they were compelled to cut expenses and now five members of our County Commission decide to take more money from them and give it to the chambers. Membership in the Committee of 100 is down. So what does that tell you?
While the Turnage may be a wonderful "idea," the reality is that it gets a "property tax rebate" while many small businesses cannot afford to pay their tax bills.
Second, these six individuals clearly do not understand the reality of senior citizens on fixed incomes who have to choose between paying their taxes or losing their homes and paying exorbitant light bills or paying for their medications. This is an actual reality in Beaufort County. And there are no doubt multiples more of those people than there are those "helped" by some of these special interest groups. The latest figures show that a third of the people who live in Washington live below the poverty level. One out of every three. And they pay property taxes, one way or another.
Third, the last report from the Employment Security Commission says that the unemployment rate in Beaufort County is over 10%. Underemployment (people who have taken lower paying jobs or still have a job but work less hours than they used to) is bumping 30%. One in three. And while many of these people don't pay much in property taxes they pay rent and unless they live in government housing the landlords pay property taxes and factor it into the rent to some degree.
The point is simple: Businesses and people are hurting in Beaufort County. Now is not the time to take $2.5 million away from them with a tax increase.
These same "enlightened officials" are fond of talking about "the multiplier effect" when they want to extend corporate welfare to some business that wants a handout to "create or retain jobs." The county has spent over $6 million and plans to spend over $250,000 on "economic development" in this budget. What sense does it make to spend that kind of money recruiting new businesses and then saddle struggling businesses already here with higher taxes? That $6 million we have tied up in unproductive real estate and a quarter of a million a year would go a long way in helping a few small businesses that cannot get credit to meet a depressed cash flow right now. The "multiplier effect" cuts both ways. In good times it is positive. In hard times it is a negative impact on the economy.
That is reality. But six of these county officials don't seem to get it. They follow the same paradigm they followed in boom years. But the reality is that we are not in a boom period and it will be quite some time before boom times return. The problem exists all across the state. It exists in state government and it exists in the Federal government.
But their ignorance of reality should be no surprise. Hood Richardson last year predicted exactly the problem they are facing this year. They ignored that reality also.
The reality of good governing and management is that you don't manage things in a depression like you manage them when there is full employment. Some places realize this and are changing. Unfortunately, our current County Manager and five of our county commissioners don't get that.
They need to do a little reading. We would suggest they start with the International City/County Management Association (ICMA). And to be specific we would commend to them an article in the ICMA's June PM Magazine entitled "10 New Rules in Times of Economic Meltdown."
The article begins by saying: "Unlike previous pullbacks, it appears that local government will experience long-term fiscal stress, undercutting its ability to respond to the big issues of the day. This financial crisis is not the result of the business cycle but a result of long-term structural issues.
"To make matters worse, employees are feeling fearful, pessimistic, and even victimized. In a culture of fear, creativity cannot flourish and thus local government cannot overcome its problems."
They go on to list the New Rules that All-star managers and leaders are adopting:
1. Identify the Core--Do less better by focusing on the essential core services. With but few exceptions, core services/functions impact the general public, not indiviudals or special interests. Core services provide for the common good, strictly construed.
2. Focus on a few priorities--There was no (zero, zip, nada) evidence of this in our recent budget discussions.
3. Accelerate through subtraction--An effective leader(s) engages the organization in finding things to eliminate and significantly reduce. That's the opposite of raising taxes. It is the opposite of a County Manager and Superintendent recommending spending more rather than less.
4. Limit new analysis and reports--Now is not the time for more studies. They invariably lead to expansion, not contraction; unless they are specifically designed to subtract.
5. Have the courage to say "NO"--"Saying no" is more than a few marginal cuts. It is a constant commitment; not just in some departments but by the total culture of the organization. There is no better example of a violation of this than the County Manager's recommendation for the schools.
6. Avoid a zero-risk environment--It is a maxim in governmental finance that most budget managers operate under a compelling need to not have anything go wrong. That paradigm needs to be turned upside down in times likes these and the culture should foster trying to NOT do some things as they have "always been done." The prime example of this is the idea to "let's NOT do it and see if the sun still comes up tomorrow."
7. Pursue nongovernmental solutions--Some enlightened executive managers in city and county government have realized that this is one of the most productive areas upon which to focus. The paradigm shift is from the government being looked to for the solution, to the private sector taking leadership toward the solution. This goes back to the core services approach. Government should do the core essentials and provide creative leadership to foster more civic responsibility from businesses, non-profits, churches, organizations and individuals. Just because there is a legitimate need and just because something is a good idea does NOT mean that government should do it.
8. Free up monies for a few targeted investments--The ICMA says: "The manager must help the governing board "overcut" so that the local agency can invest in such areas as employee development, information technology, critical capital improvements, energy efficiencies, sustainability initiatives, and strategic partnerships."
9. Provide meaning and support to staff--The key to identifying where the waste is and actually doing something about it rests more with the staff than it does with the governing board. If governing boards realized that the staff is better at improving efficiencies than the governing bodies are we would probably see better results. But if staff operate in a culture of "do more, spend more" what can we expect from them but to do just that?
10. Help develop talent and rebuild organizational capacity--Stephen Covey called it focusing on the Means of Production rather than exclusively on producing. Most military veterans know that the best performance often comes when the unit is under the most stress. Hard times is when good managers and governing boards focus on building organizational capacity, not in hampering it.
The recent budget sessions clearly and compellingly demonstrate that our current County Manager and the majority on the County Commission are in serious need of a change in mindsets. We commend to them these ten rules the ICMA has identified that are being used by the All-stars in local government these days. And the board needs to do this before they hire a new County Manager.
But whatever they do, they've got to come to understand these are not ordinary times and doing business like we have always done business will not get the job done that must be done. That's just the reality of the way things really are. The sooner our local officials get a grasp on reality the better off we will all be. And if they don't, and continue to do "business as usual," we are in for some serious trouble.
Go Back
We either sat through or watched the videos of all of the County's budget workshops. When you back away and look at the sessions as a whole there is a remarkable fact that strikes us: Most of these people, at least six of them, just don't understand reality. Those six are Chairman Jerry Langley, Ed Booth, Robert Cayton, Al Klemm, Jay McRoy and Paul Spruill, the outgoing County Manager. The proof of this conclusion lies in a simple fact: This year's budget process was pretty much the same as the previous year's...and the year before. The only real difference is that they have much less in their reserve account so they simply plan to raise taxes. Indeed, the County Manager announced in one of his obtuse presentations that "what we have is a revenue problem." The County Schools folk did the same thing, listing the "cuts" from the state as justification for raising taxes, thereby exhibiting a mindset that the revenue shortfalls should be made up by raising local property taxes.
But the reality is that these are not normal times.
The majority of the Commission was willing to review line item by line item but not willing to make any major cuts in spending. The oblivion to reality was most obvious when they got to the "handouts" sought by various special interest groups. If a group was funded last year the presumption was that it would be funded again this year, perhaps with a few marginal reductions which do not amount to the proverbial "hill of beans."
What was clearly missing in all this was even the slightest indication that our leaders understand the reality Beaufort County faces these days.
First, that reality is that many of the most productive citizens in the county--the ones upon whom our economic future will depend most--have just experienced substantial tax increases from the so called "revenue neutral" revaluation. Some small business commercial property tax bills have doubled at a time when these businesses are struggling to survive. What sense does it make to raise their taxes again with a ten percent rate increase on top of a valuation increase last year and give money to help special interest groups that "need" more money?
Consider just two of these groups the Commissioners decided to give donations using your money: The local chambers of commerce and the Turnage. We know several local businesses who had to forego joining the chamber the last couple of years because they were compelled to cut expenses and now five members of our County Commission decide to take more money from them and give it to the chambers. Membership in the Committee of 100 is down. So what does that tell you?
While the Turnage may be a wonderful "idea," the reality is that it gets a "property tax rebate" while many small businesses cannot afford to pay their tax bills.
Second, these six individuals clearly do not understand the reality of senior citizens on fixed incomes who have to choose between paying their taxes or losing their homes and paying exorbitant light bills or paying for their medications. This is an actual reality in Beaufort County. And there are no doubt multiples more of those people than there are those "helped" by some of these special interest groups. The latest figures show that a third of the people who live in Washington live below the poverty level. One out of every three. And they pay property taxes, one way or another.
Third, the last report from the Employment Security Commission says that the unemployment rate in Beaufort County is over 10%. Underemployment (people who have taken lower paying jobs or still have a job but work less hours than they used to) is bumping 30%. One in three. And while many of these people don't pay much in property taxes they pay rent and unless they live in government housing the landlords pay property taxes and factor it into the rent to some degree.
The point is simple: Businesses and people are hurting in Beaufort County. Now is not the time to take $2.5 million away from them with a tax increase.
These same "enlightened officials" are fond of talking about "the multiplier effect" when they want to extend corporate welfare to some business that wants a handout to "create or retain jobs." The county has spent over $6 million and plans to spend over $250,000 on "economic development" in this budget. What sense does it make to spend that kind of money recruiting new businesses and then saddle struggling businesses already here with higher taxes? That $6 million we have tied up in unproductive real estate and a quarter of a million a year would go a long way in helping a few small businesses that cannot get credit to meet a depressed cash flow right now. The "multiplier effect" cuts both ways. In good times it is positive. In hard times it is a negative impact on the economy.
That is reality. But six of these county officials don't seem to get it. They follow the same paradigm they followed in boom years. But the reality is that we are not in a boom period and it will be quite some time before boom times return. The problem exists all across the state. It exists in state government and it exists in the Federal government.
But their ignorance of reality should be no surprise. Hood Richardson last year predicted exactly the problem they are facing this year. They ignored that reality also.
The reality of good governing and management is that you don't manage things in a depression like you manage them when there is full employment. Some places realize this and are changing. Unfortunately, our current County Manager and five of our county commissioners don't get that.
They need to do a little reading. We would suggest they start with the International City/County Management Association (ICMA). And to be specific we would commend to them an article in the ICMA's June PM Magazine entitled "10 New Rules in Times of Economic Meltdown."
The article begins by saying: "Unlike previous pullbacks, it appears that local government will experience long-term fiscal stress, undercutting its ability to respond to the big issues of the day. This financial crisis is not the result of the business cycle but a result of long-term structural issues.
"To make matters worse, employees are feeling fearful, pessimistic, and even victimized. In a culture of fear, creativity cannot flourish and thus local government cannot overcome its problems."
They go on to list the New Rules that All-star managers and leaders are adopting:
1. Identify the Core--Do less better by focusing on the essential core services. With but few exceptions, core services/functions impact the general public, not indiviudals or special interests. Core services provide for the common good, strictly construed.
2. Focus on a few priorities--There was no (zero, zip, nada) evidence of this in our recent budget discussions.
3. Accelerate through subtraction--An effective leader(s) engages the organization in finding things to eliminate and significantly reduce. That's the opposite of raising taxes. It is the opposite of a County Manager and Superintendent recommending spending more rather than less.
4. Limit new analysis and reports--Now is not the time for more studies. They invariably lead to expansion, not contraction; unless they are specifically designed to subtract.
5. Have the courage to say "NO"--"Saying no" is more than a few marginal cuts. It is a constant commitment; not just in some departments but by the total culture of the organization. There is no better example of a violation of this than the County Manager's recommendation for the schools.
6. Avoid a zero-risk environment--It is a maxim in governmental finance that most budget managers operate under a compelling need to not have anything go wrong. That paradigm needs to be turned upside down in times likes these and the culture should foster trying to NOT do some things as they have "always been done." The prime example of this is the idea to "let's NOT do it and see if the sun still comes up tomorrow."
7. Pursue nongovernmental solutions--Some enlightened executive managers in city and county government have realized that this is one of the most productive areas upon which to focus. The paradigm shift is from the government being looked to for the solution, to the private sector taking leadership toward the solution. This goes back to the core services approach. Government should do the core essentials and provide creative leadership to foster more civic responsibility from businesses, non-profits, churches, organizations and individuals. Just because there is a legitimate need and just because something is a good idea does NOT mean that government should do it.
8. Free up monies for a few targeted investments--The ICMA says: "The manager must help the governing board "overcut" so that the local agency can invest in such areas as employee development, information technology, critical capital improvements, energy efficiencies, sustainability initiatives, and strategic partnerships."
9. Provide meaning and support to staff--The key to identifying where the waste is and actually doing something about it rests more with the staff than it does with the governing board. If governing boards realized that the staff is better at improving efficiencies than the governing bodies are we would probably see better results. But if staff operate in a culture of "do more, spend more" what can we expect from them but to do just that?
10. Help develop talent and rebuild organizational capacity--Stephen Covey called it focusing on the Means of Production rather than exclusively on producing. Most military veterans know that the best performance often comes when the unit is under the most stress. Hard times is when good managers and governing boards focus on building organizational capacity, not in hampering it.
The recent budget sessions clearly and compellingly demonstrate that our current County Manager and the majority on the County Commission are in serious need of a change in mindsets. We commend to them these ten rules the ICMA has identified that are being used by the All-stars in local government these days. And the board needs to do this before they hire a new County Manager.
But whatever they do, they've got to come to understand these are not ordinary times and doing business like we have always done business will not get the job done that must be done. That's just the reality of the way things really are. The sooner our local officials get a grasp on reality the better off we will all be. And if they don't, and continue to do "business as usual," we are in for some serious trouble.
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