Saturday, April 30, 2011

Public Safety Spending in Minnesota Cities

Public safety is considered to be a fundamental duty of government; however, in a day when budgets are increasingly tight, even fundamental services are facing cuts. These cuts are forcing people to make difficult decisions regarding level of service. Services included in the public safety realm are administered at all levels of state and local government and entail more than just beat cops and penitentiaries. Public safety services actually include correctional facilities, courts, human rights, law enforcement, emergency responders, public defenders, certain libraries and communications equipment, and various oversight boards. As the cost of public safety rises, governments are being trapped in a corner where cost and demand are both high.

Cities often rely on local government aid to fund their public safety programs. The federal budget deal reached by Democrats and Republicans in April of 2011 cuts $600 million from programs for police department salaries and equipment, which will likely result in cuts to Minnesota local law enforcement.[1] City governments approached the public safety budget dilemma in a variety of ways.

In White Bear Lake policing is the city’s single biggest expense at 41% of the city budget.[2] Instead of migrating cuts to other departments, White Bear Lake has decided to make public safety sacrifices. They are holding off on purchasing new patrol cars and tornado sirens, rely primarily on a volunteer firefighting staff, have foregone standard improvements to the shooting range, and opted not to put computers in city ambulances.2

Cities in greater Minnesota are experiencing great difficulty keeping their police forces afloat. In almost every single outstate Minnesota community, public safety is the single largest budget item, making it a big budget cut target.[3] Some have chosen to eliminate jobs and now nearly half of outstate programs no longer operate 24/7.3 An option that is being increasingly utilized is consolidating with other agencies or contracting out law enforcement services. According to Lebens, “over the past 10 years, 63 police departments have folded or merged.”

Minneapolis and Mayor R.T. Rybak have chosen to make public safety a priority and has cut funding in all other departments. In fact, the city increased annual spending of general fund dollars from $150 million in 2003 to $190 million in 2010.[4] Although 59 jobs had to be cut in other departments, the police and fire departments suffered no losses and actually effectively saved 103 public safety jobs by reallocating the necessary budget cuts.[5]

The City of St. Paul has used funds from Obama’s Recovery Act to maintain the safety of the city in 2010. 34 new police officers were hired with special emphasis on combating gang activity and domestic violence. The EMT force was beefed up to include “super medic” units and 18 new firefighters were brought to the department.[6] The St. Paul example demonstrates that improvements can be made even during tough times as long as public safety is a top priority.

Friday, April 29, 2011

Changes to BadgerCare--Not so Forward Thinking

On March 23, 2010 the Affordable Care Act became law, helping more children get health coverage, ending lifetime and most annual limits on care, allowing young adults under 26 to stay on their parent's health insurance, and giving patients access to recommended preventative services without cost. While it seems the nation is making strides to provide better healthcare to more Americans, Wisconsin's new Governor wants to slash funding for and overhaul the state's BadgerCare Program that makes healthcare available for more Wisconsinites.

The BadgerCare Program was enacted in the fall of 1997 under Governor Thompson to make healthcare available for the working poor. Wisconsin succeeded in enrolling such a large proportion of the uninsured low-income children that policy makers in other states took notice. Read more about the history of BadgerCare here. Currently, the program serves more than 750,000 people and is so popular that there is a 70,000 person waiting list.

Who is currently eligible?
- All children under age 19, regardless of income.
- Pregnant women with incomes up to 300% of the Federal Poverty Level (FPL)
- Parents and relatives caring for a child up to 200% of the FPL
- Young adults in foster care who turn 18 on or after January 1, 2008, will automatically be able to get BadgerCare Plus until they turn 21, regardless of income.
- Farm families and other families who are self-employed may be eligible under BadgerCare Plus if their income is under 200% of the FPL
- Parents whose child/children are in foster care and you have a reunification plan in place may be eligible for BadgerCare Plus if their income is below 200% of the FPL

The BadgerCare program is highly utilized, however under Governor Scott Walker's budget plan, about 55,000 people could lose their health insurance under the state's BadgerCare program. Then, going further, he wants to ensure that his appointed head of the state Department of Health Services (DHS), Dennis Smith, could make sweeping changes to Medicaid programs without approval by the full Legislature. The budget deficit is an issue, but is Walker taking this too far?

What steps are being made to make buildings GREEN

        In  2008, U.S. buildings accounted for 8% of the total share of global primary energy consumption and 40% of the U.S. total. Buildings use energy for a number of different needs but a large portion of the energy consumed is for heating and cooling. Increasingly, financial incentives at all levels of government are looking to retrofit and redesign buildings to be more energy-effiecent. Below is a breakdown by the U.S. Department of Energy of the consumption patterns for residential and commercial buildings.

        Energy prices have fluctuated over the last few years but they have been consistently going in one direction, up. The concern over the stability of the energy markets has led federal, state, and local governments to invest in programs that target energy efficient building construction and design. Recently, the White House has released a new report that aims to address the barriers that exist for implementing cost saving measures and steps that can be made to address them.
        One of the programs that has received a significant amount of support is the Property Assessed Clean Energy (PACE) Financing model. It was started in Minnesota in 2010 and to date has 26 participating states (Figure 2). Many people want to retrofit their buildings to make them more energy-efficent, but they don't want to pay a great deal of money for something that they won't see benefit from if they move out. The PACE model provides loans to building owners to retrofit their property but the repayment of the loan is done through an added payment attached to the property taxes on a building. In this way the cost of the improvements are tied to the property and not the individual. 

       A recent cost-benefit analysis by a PACE advocacy group found that once the program realized economies of scale it could be a net savings for the government. The savings would come from an estimated 20,000 increased jobs and the reduced energy production needs that are partially subsidized by the government.
       Finally, cutting edge technology tools by MIT as well as ESRI are making the analysis of the potential cost saving measures that a building could employ much faster. The discussion below by the Green Building Council outlines steps that are being taken and provides a GIS platform to show what retrofit programs various buildings throughout the country are implementing. It is also meant to be used as a financial resource to track the reduction in energy consumption of buildings. 

K-12 Education in Minnesota: State-Level Spending

State-level spending in Minnesota on K-12 education represents over a quarter of the state’s expenditures by program, second only to expenditures on health and human services. This spending is supplemented by federal aid and local property tax levies to create an education spending paradigm on par with other states. However – and as one might expect – Minnesota receives fewer federal dollars per pupil than all but three other states (Census report here). It is also interesting to note that Minnesota funds its 340 school districts and 143 charter schools with fewer local revenues than all but thirteen other states. The end result is a heavy reliance upon state revenues for education programs.
In 2008-2009, Minnesota state sources provided $6.6 billion in funding for the state’s 800,000 pupils. Due to socioeconomic differences across school districts, and despite policymakers’ efforts, this money is not always spread as equally as it might be. A clear indication of this lies in the fact that, “[i]n fiscal year 2008, school districts comprising the top 5% in terms of general education revenue will have approximately 25% more revenue to spend than districts comprising the bottom 5%.”
This leads naturally to inquiries as to the fairness and equity of Minnesota’s education spending. At the heart of the matter is the state’s alarming achievement gap, issues of teacher performance measurement and compensation, and the perhaps one-sided controversy surrounding school vouchers and charter schools. In more detail:
  • Minnesota students score higher than or at the national average across the board, independent of race, but Caucasian pupils have somehow been given a tremendous lead over minority students.
  • The beleaguered teaching profession is suffering from a lack of competitive pay and a protracted crisis of credibility in the absence of an effective performance standard.
  • School vouchers and charter schools continue to stand accused of siphoning off precious state general education aid to private institutions and to charter services instead of disadvantaged districts. 
 In the midst of an economic downturn and in the context of an already relatively high level of state-level education spending, can we recommend Minnesota spend its way out of an achievement gap? One option, outlandish as it sounds, might be to tighten spending on those districts that outperform, academically, and reallocate their funds to districts with lower achievement scores. 

A more palatable option might be to give serious consideration to a new measure of teacher performance – especially as teacher salaries constitute upward of 60 percent of all education costs. If we turn teacher compensation into a competitive, performance-based living wage, we may see that Minnesota’s $6.6 billion is able to go just a little farther.

Economic Development Expenditures for the Bioscience Industry in Iowa

Iowa is well known in the United States for being a state filled border-to-border with cropland. The state conjures an image of acres upon acres of corn and soybean fields. The growth, sale, and use of these vast resources is a fundamental part of Iowa’s economy. The advanced processing of these crops is part of a large industry called bioscience. The bioscience industry is considered to be one of the key industry clusters in the state of Iowa and is a prime target for state expenditures to capitalize on this strength and promote further economic development. Two of many programs through which Iowa supports the bioscience industry include the Grow Iowa Values Fund and the Iowa Demonstration Fund. They are both programs organized and operated by the Iowa Department of Economic Development (IDED). Together they support a wide range of companies doing business in Iowa.

The Grow Iowa Values Fund (GIVF) is one of the most contentious pieces of economic development legislation in the last decade. Both policy groups and editorial writers question its effectiveness. It was designed to be a funding resource, including loan and forgivable loans, for projects focused on job creation or retention, value-added agriculture, and entrepreneurial efforts. The first legislation for its creation in 2003 was found unconstitutional due to inappropriate Governor vetoes. When it was finally enacted in July 2005, large financial awards to companies like Wells Fargo made people question whether it was an appropriate use of tax dollars. The most troubling report of all, initial evaluations showed GIVF projects to be drastically under-performing their stated employment and wage projections. Despite its issues, the GIVF has been very active. From its creation in 2003 through February 2010, it has awarded funds to 579 projects pledging 33,954 new or retained jobs. Source

The Iowa Demonstration Fund is a much smaller, matching grant program. Grants of up to $150,000 are awarded to applicants who match the dollar amount 2-to-1. The program is for companies in targeted industries (including bioscience) who have a product ready for commercialization and market entry. During fiscal years 2008 to 2010, 131 applications for the program were received, with 81 total grants funded totaling around $8.3 million. Source No criticism could be found for the program, likely due to its small annual cost. It also has had recent changes to its application process to set up applicant for success and continue mentoring grant recipients. Source

Public Campaign Finance Expenditures

On federal and sixteen state income tax returns individuals have an opportunity to “checkoff” if they wish to designate $1 - $10 (depending on the state) to public campaign funds. These funds, which do not increase or decrease the taxpayer’s tax liability or refund have been the backbone of public campaign finance since Congress passed the Federal Election Campaign Act in 1971. Unfortunately, instead of these funds proving to expand the candidate base, limit the influence of special interest donations, or provide reasonable monetary parameters for competitive campaigns, they have been used as an unfortunate “plan B” for candidates with limited fundraising options.

The factors hampering the effectiveness of these funds are not obvious. It’s not that the fund lacks money. It’s not that candidates can only get the funds piecemeal.[1] And it’s not that the funding allowed per candidate is small.[2] Rather, it is that campaign finance in this country has gotten so out of control that no public financing system could possibly compete if the most competitive offices (President and Governor) continue in their present trajectory.[3]

So what needs to be done? (Ranging from the most radical to the most simple.)

-Abolish the Federal Election Commission [4]
-Pass the “Clean Money, Clean Elections Act

-Allow for the amount in the checkoff to vary with the consumer price index

-Simplify compliance requirements

-Educate Americans about the checkoff programs to increase participation rates

Primary election fund are given out periodically based on a candidates ability to raise matching funds. General election funds are distributed in one lump sum.

[2] For 2008 primary election candidates could receive more than $42 million, for the general election party candidates could receive more than $82 million not including legal fees or fees spent to comply with federal election law (which could be equal to or less than 15% of the “base grant” or $3 million).

[3] In the 2008 Presidential election candidates Obama and McCain spent more than $1.1 billion. The 2010 Minnesota governor’s race came with a price tag of $25 million.

[4] The FEC has been a barren wasteland of political wrangling, inefficiency, and deadlock since its inception. Currently the FEC can handle little to no actual disputes because it cannot form a quorum. This country has long needed a replacement to accurately and transparently enforce election laws.