Why We’re in This Mess

March 1, 2013

The NYS Comptroller revealed today that New York State overpaid Medicaid $26 million due to flaws in the computer system built to process claims. We should be pleased that the Comptroller’s auditors found the problem and that the NYS Dept. of Health is implementing the OSC recommendations. Unfortunately, however, this is another case of shutting the barn door after the entire herd escaped.

What the Comptroller’s press release does NOT tell us is why the mistake was made? Who developed the computer system? Was it a private contractor or an in-house system? Was political favoritism involved either in choosing the winner of a bid or deciding against letting a contract for the system? Why did it take so long to discover the problem? Will any heads roll as a result?

In a nutshell this is the problem with modern government––federal and state. No one takes responsibility or pays the price either for success or failure.

Andrew Mason, Groupon CEO, lost his job today. It probably should have happened in November of last year. He did a lousy job and he had to go.

In the public sector, you have to commit a crime to lose your job and, if you’re a teacher in the NYC school system, even that’s not assured.

In the public sector, no one pays the price when $26 million dollars are pissed away, just like no one is rewarded beyond their regular salary if they save the taxpayers money or exceed expected results.

That is why so many government run programs either fail or produce mediocre results. We rely on the good will of the public sector employee to care about the results. That’s nice when it works, but what about when it doesn’t work? What about when a person has been promoted above their level of competency? What about when someone consistenly makes bad decisions? What about the lack of oversight coming from the Executive Chamber and the White House?

Management in the public sector suffers because our elected officials seem to spend 99% of their time campaigning. Even Barack Obama spends most of his time campaigning and he can’t run again.

Who’s minding the store?

Sampling other recent audits from the Comptroller’s office we learn that many localities fail to employ proper procedures for monitoring expenditures. A few examples:

• Payments were made to the clerk-treasurer of the village of Richmondville without board approval.
• In the village of Forestville, “the clerk-treasurer’s records for the water fund were inaccurate and misrepresented the fund’s financial condition.”
• The Town of Finley board “did not develop and adopt accurate budgets…based on realistic estimates of revenues and expenditures.”
• The Village of Parish’ board “did not ensure that all claims were audited prior to payment…”
• There are significant weaknesses with the timeliness and accuracy of how the town of Livingston’s tax collector recorded, supported, deposited, disbursed and reported tax payments.
• Internal controls over cash receipts and disbursements were not appropriately designed or operating effectively for the Niagara County Soil and Water Conservation District.

In a year’s time, the Comptroller’s office finds dozens of examples of mismanagement and poor controls. They also find fraud and theft, which lead to criminal prosecution and conviction. But keep in mind that what is discovered is only the tip of the iceberg and all of the problems are discovered AFTER THE FACT.

All of the above explain why so few Americans––other than the ones who are going to be furloughed––are upset about sequester. Americans know in too many instances their local, state and federal governments are not being managed properly. They know too much of their money is being wasted. They know too many of those who should be benefiting from government programs are being short-changed.

That’s the part of the story some people don’t want to hear. It’s not because the public hates government or doesn’t think it’s needed. What we hate is mismanagement and waste––not the public sector employee. We hate that system doesn’t include the possibility that a bad job is punished and a good job is rewarded. We hate thinking this is the best there is. AND, we hate those who make excuses and blame the messenger. It’s time the apologists for mediocrity and failure took some responsibility or get out of the way. Let’s clean up this mess now.

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Mandate Relief: A Proposal

February 23, 2013

Localities across NYS have been begging for ‘mandate relief’ for years, but their appeals have fallen on deaf ears in Albany. Until now governors and legislators have been loath to give localities a break on requirements they felt were necessary when they passed them. The concept threatens to open a Pandora’s box of allowing localities to ignore Albany’s dictates whenever they feel like it.

At the same time, we know that many of these same localities are teetering on the edge of bankruptcy. Just this week Moody’s Investors Service reiterated its negative outlook for local governments across the country. (See: http://www.moodys.com/research/Moodys-Outlook-for-US-local-governments-remains-negative-in-2013–PR_266803) Facing heavy public safety budgets and rapidly expanding pension obligations they cannot afford, localities are screaming for help.

Gov. Cuomo’s solution is to allow them to borrow against future savings. Not only is this questionable in terms of whether the NYS Constitution allows it, but it’s another short-term solution. What happens if that’s not enough?

Here’s a solution that addresses both short term and long-term needs.

The Governor and Legislature should offer temporary mandate relief to localities in proportion to the extent to which they move either to share services or merge with other jurisdictions.

In other words Albany ought to offer this carrot: We’ll give you a break on certain mandates if you show us that you are capable of finding solutions to local governance that cost taxpayers less while improving the quality of the services you deliver.

Mandate relief ought to match up with the specific efficiency improvement employed. In other words, if two school districts merge there ought to be a list of education mandates the combined district can choose to ignore for the next three or five years while they manage the transition. Same with towns, villages, cities or counties that incorporate other jurisdictions. So, if the city of Schenectady dissolves its governmental functions into the County, the County would be given temporary relief from having to comply with cumbersome mandates to help it digest the added obligations.

The State must continue to offer consolidation assistance so that localities don’t offer the excuse of they don’t know how to do it.

I would not, however, like this concept to defer the State from looking at mandate relief that it can offer across the board. There are surely some requirements that no longer make sense in proportion to the cost imposed on the localities. Some mandates, however, ought to be retained and state officials will be able to make a stronger case for those when unneeded mandates are eliminated.


Consolidation is still the best solution

February 21, 2013

The focus of the debate today is on the tax cap. NYSUT has gone to court to overturn it; while the Business Council opposes that move. Both have their points. A rigid tax cap doesn’t allow for local needs. Although the 2% limit can be breached, there’s a cost in terms of people power and money to do so. On the other side without a cap, local government administrators lack any incentive to increase efficiency.

Gov. Cuomo’s solution––borrowing from future pension savings––has not won over a number of mayors and other officials. (See Stephanie Miner’s op ed “Cuomo to Cities: Just Borrow” in the New York Times)

The long-term solution is still consolidation. I’ve made this argument many times before. So if you don’t like my reasons, consider another data point offered by UB Prof. Bruce Fisher. Writing in ArtVoice, Fisher points to the success the cities of Toronto and Montreal have had with regionalization — merging small inefficient local governments into their regional structure. (See “Bashing Cuomo, Ducking Mergers“)

Let’s review the facts:

    Current jurisdictional lines–city, village, town and even county boundaries–no longer reflect current demographic and technological conditions. They lead to underutilized equipment and personnel, to gaps and duplication, to bureaucratic and political infighting, poor management, fraud and the bottom line poor service delivery.
    Those who oppose consolidation are the primary beneficiaries–those whose personal pockets are lined with cash today and in retirement. They get to act like kings and queens in the name of their subjects. I thought we’d gotten rid of royalty two hundred fifty years ago!
    Consolidation can result in lower taxes and better services. Examples abound (see Fisher). But we’re not just talking about something that would be nice to have happen. For Upstate New York, consolidation is a necessity!
    In review, lots of individuals and business owners in Upstate New York would rather be elsewhere. To keep them where they are taxpayers are taking on the chin. In order to make Upstate desirable we need fewer government entities, lower energy prices and lower taxes. Consolidation gives us two out of the three.

The State Department and our friends at the Government Law Center of Albany Law School and the Rockefeller College are doing their best to help local governments face the music, but the progress is too slow. Read the Comptroller’s audit reports of local government financial management and you’ll see that too many tax dollars are being mismanaged if not outright stolen.

The solution: Increase the incentives AND the penalties for not consolidating. Also, we need political leaders who will carry this water. Tell your constituents that they’re putting nails in their communities’ coffins every day they delay in merging with other jurisdictions. That includes some counties which ought to merge given how few people live within their borders.

Final point: Isn’t consolidation a solution both NYSUT and the Business Council could agree on? Wouldn’t both win with stronger school districts and a friendlier climate for the business community?


New York Strikes First, But Is First Good?

January 15, 2013

A month from the day of the tragedy in Newtown Connecticut, Governor Andrew Cuomo pushed through a package of gun control legislation that included tougher sentences for illegal gun possession, an attempt to use the mental health system to identify people who might be prone to use guns as well as restrictions on so-called assault weapons and the magazines used for semi-automatic weapons. Owners of “assault” rifles, which are now defined by having one feature of a military rifle, will be required to register them with the state.

One provision won approval of some legislators who voted against the final package. The Journal News, a Gannett owned daily with editions in Westchester and Rockland counties, earned the wrath of Sen. Greg Ball and others for having published the names and addresses of gun owners. The new legislation “places restricts on how that information can be made public” according to Karen DeWitt, NY Public Radio reporter.

The Empire Page is running a poll for its readers, asking them whether this legislation was needed, is balanced and/or will save lives?


Who Needs Predictions: I’ve Got the Facts

January 3, 2013

Instead of predictions for 2013, I’m here to give you the facts (and nothing but the facts).

1. Further restrictions on the sale of certain types of firearms will pass both the NYC Council and NYS Legislature in 2013. They will not reduce the number of people who die in NYC subways which currently averages one a week––some as a result of people with mental health issues either jumping in front of trains or pushing someone else off the platform.
2. New Yorker taxpayers will not be told how much federal Sandy relief aid will come out of their pockets. Gov. Cuomo will not inform the public that every dollar in federal relief will be borrowed money that taxpayers will have to pay back in higher federal taxes for decades.
3. The 2013 State Budget will be balanced as the law requires, but Gov. Cuomo and the NYS Legislature will use budgeting tricks, mirrors and slight of hand to accomplish it.
4. More than one locality will file for bankruptcy in 2013.
5. Voters will reject as many school district consolidation votes as they pass, refusing to see the writing on the wall––that it costs more to run two separate small school districts than one combined district and results in inferior instruction to boot.
6. More Democrats will join the Independent Democratic Conference in the NYS Senate when they realize membership gives them more power.
7. At least one daily newspaper will switch to a bi-weekly or weekly publication schedule.
8. Hillary Clinton announce that she will not be a candidate for the Presidency in 2016.
9. The Buffalo Bills will not make the playoffs in 2013.
10. The Empire Page will find a new owner in 2013 and Peter Pollak will retire (once again) to write more novels.


Fast, Furious and Wrong: The Response to Connecticut

December 18, 2012

Sunday night I had a conversation with a couple who were planning on attending the protest the next day in Washington, D.C. at NRA headquarters. They were going despite believing incorrectly that a semi-automatic gun sprays bullets and despite not knowing that re-instating the federal assault weapons ban would not have prevented Adam Lanza’s mother from buying the guns used in Newtown. They did not know that Connecticut already has an assault weapons ban or that neither the rifle nor the pistols in Adam’s possession are classified as “assault” weapons under that law, nor did they understand that the number of bullets in the magazines used by Lanza made little difference in the outcome given the number of guns he had at his disposal.

One can excuse the ignorance of people who are outraged at the loss of so many lives, but not the behavior of politicians who leapt onto the public stage trying to be the first to go on record as saying we need more gun control. Elected officials should know the history of gun control legislation and should know that assault rifle bans and limits on magazines would not have prevented the Connecticut tragedy.

It is natural when hearing about such events to want to do something to prevent a reoccurrence, but legislation enacted in the heat of the moment is inevitably foolish legislation. Assault rifle bans are a case in point. To begin with the definition of an assault rifle is a political construct without correspondence in the world of weaponry. Second banning the manufacture and sale of certain types of guns will not prevent those who intend on doing harm to others from obtaining guns. It would take years to reduce the number of such weapons that currently exist in private hands, and it is inevitable that outlawing specific types of guns will create a black market for the import and sale of outlawed guns to those with enough cash and desire to obtain them.

Too often legislation is passed to make the legislators feel good and of course to give them something to brag about to their constituents. They pass bills without regard for whether their legislation will actually accomplish what they claim. Criminal justice legislation is the prime example of this fallacy. Increasing the penalty for a crime has zero impact on the likelihood that someone will commit that crime since most crimes are committed in moments of anger or out of drug-induced need and such criminals have no idea, nor do they care, about the length of the sentence if caught.

The hardest thing for adults to do in a world where news is immediate and constant is to admit that there is nothing we can do about a situation. We cannot prevent some children from starving in Africa. That will take place even if we donate to relief organizations. We cannot prevent some children from being sold into slavery no matter how many letters we write demanding it be stopped. We cannot prevent certain some individuals from doing terrible things to others and/or themselves.

It’s also possible that passing a law is the worst possible thing we can do because it gives people the false impression that the problem has been solved and they can go back to ignoring the world around them.

What we can do is be conscious of things happening in our own lives. We can speak out when there’s a situation that doesn’t seem right. That still might not prevent a tragedy from occurring, but we don’t know how many Adam Lanzas are brought back from the brink by a conscientious teacher or neighbor.

Keeping guns out of the hands of the wrong people cannot be prevented entirely by passing assault weapon bans. We can and should try, but there is no perfect solution. That said, we can be better citizens by reaching out to those who appear to be in trouble. Nancy Lanza needed help. The cost of someone’s not giving it to her should make all of us more vigilant in the future.


A Major Project Moves Forward in Vermont While A Similar Effort In NYS Is Blocked

October 8, 2012

Two stories from SnoCountry website tell the tale of two major economic development projects — one that’s accelerating, the other that’s stalled. See Major Project Accelerates in Northern Vermont As Similar Effort Stalls In N.Y. and Volunteers Toss In Towel – New York’s Big Tupper Won’t Open.

The Jay Peak-Burke Mountain project in Northern Vermont is a public/private partnership that includes ski lodges, but also manufacturing and a biomedical research center that projects to bring 5,000 permanent jobs to the Newport area.

In contrast in New York, the attempt to reopen the Big Tupper Ski Area as part of a major economic development project collapsed under the weight of delaying tactics by the Sierra Club and other so-called environmental organizations. Approval of the project this past January by the Adirondack Park Agency after an 8-year battle turned out to be a symbolic victory as instead of working to bring about something positive for the economically-depressed central Adirondack region, the environmentalists preferred to crush the community’s hopes with court actions.