Category Archives: State Government

How you buy affects what you get: Technology acquisition by state governments

Source: Kawika Pierson, Fred Thompson, Government Information Quarterly, In Press – Corrected Proof, Available online June 24, 2016
(subscription required)

From the abstract:
Research suggests that governments should rely on standardized information technology solutions rather than custom built ones. We find that, for many categories of taxes, states that have contracted out the development of their tax-processing systems to providers offering standardized solutions see statistically and economically significant increases in collections relative to states that have not. We find no evidence that financial administration expenditures increase for these states. At the same time, there are several categories of taxes where we do not find a positive impact. We reconcile these findings by developing a qualitative argument that standardized solutions in tax administration may be most effective for the types of taxes that are the most difficult to enforce.

• Leverages a natural experiment to test government IT acquisition strategies.
• Uses tax collection as an objective outcome measure.
• Compares governments that adopt more standardized solutions with those that do not.
• Governments with standardized solutions show significantly higher tax collections.
• Collection improvements seem more likely in taxes that are harder to enforce.

Significant Reforms to State Retirement Systems

Source: Keith Brainard, National Association of State Retirement Administrators (NASRA), Spotlight On, June 2016

From the introduction:
Although states have a history of making adjustments to their workforce retirement programs, changes to public pension plan design and financing have never been more numerous or significant than in the years following the Great Recession. The global stock market crash sharply reduced state and local pension fund asset values, from $3.2 trillion at the end of 2007 to $2.1 trillion in March 2009, and due to this loss, pension costs increased. These higher costs hit state and local governments right as the economic recession began to severely lower their revenues. These events played a major role in prompting changes to public pension plans and financing that were unprecedented in number, scope and magnitude.

State and Local Government Workforce: 2016 Trends

Source: Center for State and Local Government Excellence, May 2016

From the summary:
For the third year in a row, state and local governments are reporting an increase in hiring. Pressure on benefits continues, with employees taking on greater shares of health care costs and contributions to pensions. As the rate of retirements accelerate, there is a greater sense of urgency about recruitment, retention, and succession planning.
The ‘Silver Tsunami’ Has Arrived in Government
Source: Mike Maciag, Governing, May 31, 2016

Significantly more state and local workers are retiring or quitting, according to a recent survey.

Understanding Workplace Flexibility in State Agencies: What Facilitates Employee Access?

Source: Xuhong Su, Xueyang Li, Endra Curry, The American Review of Public Administration, Published online before print April 6, 2016
(subscription required)

From the abstract:
The case for workplace flexibility has been largely established in the private sector, yet little is known about what facilitates or constrains employee access to flexibility options in governmental agencies. Focused on both flextime and flexible careers (career breaks, job sharing, and reduced hours), this study investigates how agency strategies, motives, resources, structure, and stakeholders shape employee access to workplace flexibility. The findings suggest that employee access to workplace flexibility is largely enhanced by strategic effort and agency motives, whereas agency structure shows limited impact. Agencies with bigger budgets provide employees more access to flextime, and those short of critical human capital tend to offer more options for flexible careers. This study concludes with the discussion of research findings and potential policy implications.

Beyond North Carolina’s LGBT Battle: States’ War on Cities

Source: Alan Greenblatt, Governing, March 25, 2016

North Carolina’s fight over LGBT protections is part of a larger recent shift in political dynamics: States are thwarting local laws any chance they get — while simultaneously complaining about federal intrusion on their own. ….

….If a state official doesn’t like a city’s policy, there’s little penalty involved in trying to block it. A tax on earnings may be an essential source of revenue for St. Louis, but voting to kill it allows a legislator from outstate to take an anti-tax stand essentially for free. It won’t in any way affect revenues or programs back home. The same pattern of state legislative indifference to urban desires holds true for spending decisions. Consider infrastructure. The percentage of urban roads that have “poor pavement quality” has increased more than 50 percent over the past decade, according to the Congressional Budget Office. When it comes to public transit — and light rail in particular — state officials have been abandoning projects pretty decisively in recent months…..
Growing Southern cities are increasingly targets of state pre-emption
Source: Institute for Southern Studies, April 1, 2016

State Partisan Composition

Source: National Conference of State Legislatures (NCSL), 2016

You often hear the phrases “split control” or “divided government.” These terms relate to the party control of state legislatures or state government, which may change with each election. Current and historic party control of state legislatures and government can be accessed below. For consistency, the historic charts show the party control as of January in each year….

Top Trends in State Economic Development

Source: Sally Rood, David Moore, Elliot Schwartz, National Governors Association, March 2, 2016

From the summary:
Since the 2013 publication of Top Trends in State Economic Development, governors’ key advisors have continued to explore and implement policies and programs intended to accelerate economic growth and create jobs. Both the 2015 Institute for Governors’ Economic Policy Advisors hosted by the National Governors Association Center for Best Practices (NGA Center) and the NGA Center’s ongoing work with governors’ senior advisors provide opportunities to check in with the officials who support governors in formulating and executing their economic development plans and revisit selected trends in economic development.

Can States Take Over and Turn Around School Districts? Evidence from Lawrence, Massachusetts

Source: Beth Schueler, Joshua Goodman, David Deming, National Bureau of Economic Research (NBER), NBER Working Paper No. w21895, January 2016
(subscription required)

From the abstract:
The Federal government has spent billions of dollars to support turnarounds of low-achieving schools, yet most evidence on the impact of such turnarounds comes from high-profile, exceptional settings and not from examples driven by state policy decisions at scale. In this paper, we study the impact of state takeover and district-level turnaround in Lawrence, Massachusetts. Takeover of the Lawrence Public School (LPS) district was driven by the state’s accountability system, which increases state control in response to chronic underperformance. We find that the first two years of the LPS turnaround produced large achievement gains in math and modest gains in reading. Our preferred estimates compare LPS to other low income school districts in a differences-in-differences framework, although the results are robust to a wide variety of specifications, including student fixed effects. While the LPS turnaround was a package of interventions that cannot be fully separated, we find evidence that intensive small-group instruction led to particularly large achievement gains for participating students.

State takeovers do little to help cash-strapped cities like Flint

Source: Eric Scorsone, Joshua Sapotichne, The Conversation, January 29, 2016

…Thanks to this harmful combination of state aid cuts, lost revenues and economic distress, revenues in Flint’s city budget fell by nearly 50 percent from 2004 through 2014 –the year in which a state-appointed emergency manager approved a plan to disconnect the city’s water supply from the increasingly pricey Detroit Water and Sewerage Department…. Some observers in Flint have called for a critical reevaluation of the state emergency manager policy. Our research suggests that a review is certainly warranted. The purpose of state takeovers is to minimize damage to credit markets and protect public safety, but sometimes state policies actually help cause cities’ financial distress in the first place. Relaxing some of the constraints that states impose on local governments could reduce the need for state takeovers…..

Beyond State Takeovers: Reconsidering the Role of State Government in Local Financial Distress, with Important Lessons for Michigan and its Embattled Cities

Source: Joshua Sapotichne, Erika Rosebrook, Eric Scorsone, Danielle Kaminski, Mary Doidge, Traci Taylor, Michigan State University, MSU Extension White Paper, November 2015

From the summary:
One provocative pattern to emerge from the Great Recession is that instances of acute local fiscal distress have clustered in certain states and not others. As recently as last year in Michigan, a state appointed Emergency Manager was operating in each of 17 local governments and school districts. A recent California Policy Center report suggests that more than a dozen cities and counties in California – a state that has already experienced three recent, high-profile municipal bankruptcies and a nearbankruptcy in San Jose, the “capital of Silicon Valley” – are on the cusp of defaulting on general obligation bonds.

With the generous support of the C.S. Mott Foundation and Michigan State University, we have engaged in a multi-pronged, multi-method research program to assess the crucial but often overlooked role of state governments in shaping the ways in which cities respond to financial difficulties. This report, based on our analysis of a unique, nearly half-century-long dataset of state and local financial and policy information and correspondence with state officials, analysts and legal experts involved in state-local fiscal affairs, elaborates several key findings:
– Municipal fiscal distress is not simply a local problem. State laws and policies provide state governments with extraordinary influence over the ability of cities to balance revenue and expenditure flows. The common perception that critical taxing and spending decisions are largely within a city government’s control tends to conceal this fundamental detail about American statelocal fiscal relations.

– The ways in which state lawmakers act on this influence varies from state to state and over time. We refer to the complex mix of laws and policies that prescribe the powers, rights and capacities of local lawmakers to respond to their financial conditions as the state context for local fiscal distress. Section 1 of this report assesses key elements of this state context for the lower 48 states since 1970.

– Some states incubate local financial stress by simultaneously driving up spending pressures on their cities while curtailing their capacity to raise critical revenue. Since the 1970s, the proliferation of state-imposed tax revenue limitations, coupled with recurring cuts to state aid, has fostered a system that limits a city’s ability to fund critical services. Some state governments further undermine the fiscal capacity of their cities via state laws and policies that engender steep expenditure-side pressures (e.g., devolving program responsibilities or driving up labor costs). We classify these states as incubators of fiscal distress.

– Michigan incubates financial stress among its local governments. Michigan’s particular mix of stringent limitations on local revenue and its relatively low level of financial assistance to cities, coupled with spending pressures stemming from spiking local service burdens and increased labor costs, creates conditions that drive up the potential for local fiscal distress.

– Because state governments can foster dramatically different state contexts for local fiscal stress, there is no single model policy for state intervention in distressed cities or for prevention of local fiscal distress. A policy that does not address a state’s unique context is unlikely to help cities escape financial trouble over the long term. State lawmakers must decide which legal and political tradeoffs they are willing to make to support city fiscal health. Michigan lawmakers, for instance, must recognize that the state context contributes to the problem of local fiscal distress. An aggressive intervention policy does little to curtail the consequences of this state-imposed context. Section 2 of this report draws policy lessons from comparable states in an effort to illustrate alternative approaches to state involvement in local fiscal affairs.

This report’s practical recommendations are aimed at assisting the C.S. Mott Foundation, state and local officials, and Michigan residents in identifying a more effective policy and legal approach to local fiscal crises. These are not overly startling recommendations, yet they are easy to neglect because policymakers tend to focus more on shortterm political gain rather than the histories and unintended consequences of policies that, over time, become increasingly difficult to alter. Some key recommendations:
– Creating a state agency that coordinates services to local governments and offers technical support and fiscal monitoring.
– Raising awareness among citizens and state decision makers that the causes of fiscal distress are not solely at the local level. Though state governments are certainly part of the solution, they can be a big part of the problem as well.