Performance by U.S. Counties and Cities

The mission of the Council on Municipal Performance in 1973-1988 was to try to figure out why some cities and counties provide better services than others. What makes the difference?  

In 1988 its activities were absorbed by the National Civic League. They were also picked up by, among others, the Maxwell School Government Performance Project. The Maxwell School in 2002 rated 40 counties in the United States in five management areas. Five of the counties were in New York State. 

At the top end, the Project overall rated Erie and Westchester Counties C+, which is a failing grade in graduate school. At the low end, Nassau County rated the lowest, at D-, which is the next grade up from failure even for undergraduates. Since the data were collected in 2001 and Nassau has undergone some reforms, an update might carry Nassau County out of the cellar.

Two years before, the Project rated 35 cities, included two cities in NY State – New York City and Buffalo. The city ratings were published in 2000, based on data collected in 1999, when Rudy Giuliani was New York City's mayor.

Combining the New York State county and city numbers together in a single table - not something we asked the Project permission to do - New York City outperformed all of the NY counties in every area with only three exceptions. Westchester excelled in capital management, with a grade of A-, exceeding New York City’s B+. Also, Westchester equaled New York City in financial management, while Buffalo equaled New York City in information technology.

The counties and cities in New York State were given six grades - an overall average grade based on their rating and five ratings in specific areas, namely Financial Management, Human Resources Management, InformationTechnology, Capital Management and Managing for Results.

Erie County's grades were C+ B- C- B C+ C
Monroe County: C C C- D B C
Nassau County: D- F D D+ D- F
Suffolk County: C- B- C- C B- F
Westchester County: C+ B D+ B- A- D+
City of Buffalo: C- C D C C- D+
New York City: B B B- B B+ B

The Project rated counties thoughout the United States, so it was possible to scale the performance of New York counties and cities to a national norm.

FINANCIAL MANAGEMENT: U.S. County Average B-
The Project rates U.S. counties rated highly on financial reporting. All but one county received the Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting. Most of the county budgets are viewed as having a good structural balance (i.e., avoiding deficits on a year-to-year basis) and as having strong rainy day funds. Only 15 percent of the counties have a legally required rainy day fund. Nassau County, NY received the only F in the nation.

HUMAN RESOURCES: U.S. County Average C+
Many counties lack of a unified county personnel system, meaning that departments may bid against one another for potential employees. The tight job market of the 1990s forced many counties to improve their salaries and merit pay policies.

INFORMATION TECHNOLOGY: U.S. County Average C+
The decentralized nature of county government has hampered introduction of technological efficiency. Different county offices may use different IT systems. Counties are improving their web sites for two-way transactions. The only A’s received in any management area were the IT grades of Fairfax (Va.) and Maricopa (Az.) Counties. Allegheny and Monroe, N.Y. Counties tied for the lowest information technology grade, with a D.

CAPITAL MANAGEMENT: U.S. County Average B-
New standards from the Governmental Accounting Standards Board Statement 34 (GASB 34) requie counties to add information on assets and their maintenance needs. Almost all counties have long-term capital improvement plans and solicit citizen input. Baltimore, Fairfax, San Diego, and Westchester, NY Counties tied for the high score of A-. Nassau County’s D- grade was the lowest of the 40 counties studied nationwide.

MANAGING FOR RESULTS: U.S. County Average C+ Only one-fourth of the counties evaluated have formal overall strategic plans, although more counties have departmental strategic planning. Budgets tend to be the main way that counties convey their goals and measure results. Fairfax, Maricopa, and San Diego Counties received the highest grade of A-, while Nassau and Suffolk, NY Counties received the lowest grade of F.

Overall, this record suggests room for improvement in New York State. Some counties have improved their records since 2002 - Nassau is an example. But in the absence of crisis, the incentives and pressures for improvement are not necessarily present.

Iraq Is the Wrong Enemy and It Is a Costly Mistake

Voters have rejected President Bush’s plan for Iraq, described to supporters on October 28, 2006 as designed “to protect the homeland” by first seeking to “find the enemy and defeat them overseas."

The problem is: wrong enemy and serious collateral damage.

Wrong Enemy

The President made a case that terrorists were in Afghanistan, but made no such case in Iraq. The mistake was costly. The annual average cost of the Iraq war is about 2 percent of U.S. GDP, according to new estimates by Nobel Prizewinner Joseph Stiglitz and Harvard Professor Linda Bilmes.

Iraqis themselves have lost $24 billion in 2005 income. Their incomes were 40 percent lower, partly because the destruction of infrastructure that hasn’t been rebuilt – compared with what they might have earned in the absence of war. This estimate by Iraq expert Professor Colin Rowat of the University of Birmingham (UK) is a per-person income loss by Iraqis of roughly 20 times the cost to U.S. residents.

Collateral Damage I - Enemies among U.S. Allies

The war in Iraq has made new enemies among our allies by deceiving them. U.S. credibility among British voters has dwindled over Iraq and the staunch ally of the last two U.S. presidents, Tony Blair, is stepping down.

Collateral Damage II - Draining of U.S. National Guard Resources

The war in Iraq has overtaxed the National Guard, depriving governors of these resources for homeland emergencies like Katrina. No wonder the Democrats picked up Governorships on November 7.

Collateral Damage III - Resistance and New Terrorists

The war in Iraq has created civilian casualties in overseas battlegrounds, generating fury among survivors and a breeding ground for new terrorists. An estimated 2 percent of the Iraqi population has been killed, according to three researchers at Johns Hopkins University and a professor at Baghdad's Al-Mustansiriya University. This number, higher than previous U.N. estimates, was published in the peer-reviewed UK journal Lancet. It is about the same percentage as the overall proportion of civilians killed in World War II in affected countries as a percentage of the pre-war populations of these countries.

Risks of Shock and Awe

At a rally in Sellersburg, Indiana, on Saturday, October 28, President Bush told supporters: "Five years after September the 11th, too many Democrats still do not get it. The best way to protect the homeland is to find the enemy and defeat them overseas." This sounded like the Pet Goat Strategy.

The Pet Goat Strategy. When the President was considering his options after getting news of the 9/11 attacks in a Sarasota, Florida, classroom, pupils read out to him about a girl who had a pet goat that ate too many things. Her angry dad says that the goat must go. But the goat butts a man allegedly planning to steal the family car. The goat becomes a hero and stays. Mission accomplished.

So the Pet Goat Strategy is: Cover up problems with a show of force. Shock and awe. Full speed ahead and damn the torpedoes. This is the essence of the imperial Wolfowitz doctrine.

Risks of the Pet Goat Strategy. The problem is that the goat still eats too many things, hero or not. The risks of the aggressive Pet Goat Strategy include the following:
- It stretches a volunteer army thin. U.S. military doctrine in the Weinberger-Powell era was more cautious because the Pentagon management did not want to put the troops unnecessarily at risk.
- A preemptive strike, without full support of allies, may undermine future cooperation.
- The “shock and awe” may wear off and the mission may be far from accomplished.
- The President’s ability to respond to another crisis may be limited. Implementation of a preemptive plan may be weak. In fact, by a 15-point margin, the “most likely” U.S. voters believe Democrats would do a better job in Iraq, according to a national AP-AOL poll.

Workers' Comp Costs - NY State 27% Above U.S. Average

An association of businesses, the Business Council of New York State, has undertaken reform of Workers' Compensation laws, with a program called Comp Watch. New York State’s cost per Workers' Comp case is 72 percent above the national average. In September 2006 Attorney General Eliot Spitzer endorsed the idea of reforming Workers' Comp in New York State. Crain's Magazine on October 23, 2006 (p. 10) editorialized that such reform would be a step in the direction of removing "one of the most significant drags on the New York economy."

To get some perspective on this issue, CityEconomist interviewed Peter Rousmaniere, a columnist for a leading insurance magazine, Risk & Insurance. Peter talks with many people throughout the country on Workers' Comp and consults within the field, where he has worked for 20 years. He has an MBA from Harvard.

Do you think Workers' Comp should – and can – be reformed in New York State?
PFR: Yes and yes. The Workers' Comp system everywhere in the United States needs a comprehensive assessment. This could well start in a major state like New York. After all, the whole Workers' Comp system was in part the result of increased interest in labor conditions after the famous, tragic Triangle Shirtwaist Factory fire in 1911, one block from Washington Square. New York State’s first Labor Commissioner was Frances Perkins, who cut her teeth on the Triangle Fire. As you know, she went on to become the first Secretary of FDR’s newly created Labor Department, and the first woman to be a member of the Cabinet.

What do you think is the biggest issue with Workers' Comp? Crain’s picks out the issue of permanent partial disability.
PFR: This is one of a number of symptoms of a basic problem, which is that Workers' Comp has hardly changed since the days of Frances Perkins. It is failing badly in cases of industrial diseases. A case in point is the way that illnesses from the WTC cleanup were mishandled from the perspective both of prevention and compensation. People outside the field don’t realize that many WTC cleanup workers felt they had to misrepresent their conditions to get through the workers comp maze. The next few occupational disasters will not be traditional ones like the Triangle fire but will be in some cases very frightening diseases, as in the WTC cleanup.

Are Workers' Comp costs too high?PFR: The best answer to this often-posed question is that the system is obsolete, which has made it unresponsive, with far too much overhead costs, and universally disliked. The design of the system today is extremely close to where it was in its birth, 1910-1925. Work has changed, exposure to injury and illness has changed. The science of detecting occupational risks has moved ahead greatly. Injured worker options have changed – career-change options are far greater than in the 1920s. Medicine has changed. The whole disability system, enormous compared to 1920, is cumbersome, overused, and an invitation to moral-hazard problems.

Will the Federal Government come in to make needed changes?
PFR: It is clear to people in the field that creeping federalization will occur, with Washington paying for an increasing amount of work-injury costs. But no one really knows how much and who should be accountable to manage this shift – or indeed whether such a shift is good for workers and employers. The Federal oversight body for Wall Street, the SEC, fell down on the job while your Attorney General picked up the slack. Federal doesn’t mean better.

What is the solution, then, do you think?
PFR: The main solution is that the WC system needs to be better integrated into health plans and into other disability programs. This is not going to be an easy task. We saw what happened when the Clinton Administration tried to reform health care. But it is arguably easier for a governor to take on a task like this than a President. At least the Federal-State issues are not as thorny. A group of governors might also undertake reforms. It might start with an in-depth assessment. The last time such an investigation happened was in the 1970s. This study spurred states to make much-delayed reforms, generally favoring workers who had been under-protected.

Thank you. This was an exploratory interview. Can we get back to you if we have more questions?PFR: Absolutely. New York State seems to be on the verge of a lot of good reforms. I would be glad to help any way I can.

© Copyright 2006 by CityEconomist.

HEALTH CARE | Spending ≠ Longevity

Most Americans are now very dissatisfied with the high cost of medical care, and the percentage expressing this view has been rising rapidly.

Yet how much people spend on health care seems to have little to do with how long they live. Hawaii has longest-lived residents at 80 years life expectancy, whereas Washington, D.C. residents have a life expectancy of only 72 years, a gap of eight years.

The major differences are not in infant mortality or the life expectancy of elderly people, but in the number of people who die as youths or in middle age.

• Longest life expectancy: Asian-American women in Bergen County, N.J. live the longest with an average life expectancy of 91 years.
• Shortest life expectancy: Native Americans in several rural counties in South Dakota have a life expectancy of 66.6 years. 
• That is a 24.4-year difference between the two county groups.
• New York State ranks a surprisingly poor 19th, with an average life expectancy of 77.7 years. 
• Connecticut does better at 4th place with an average life expectancy of 78.7 years. 
• New Jersey ranks in 23rd place with a life expectancy of 77.5 years.

The research was by the Harvard University Initiative for Global Health and the Harvard School of Public Health, led by Dr. Christopher J. L. Murray. They conclude that life expectancy is primarily determined by the prevalence of chronic illnesses – for example, heart disease, cancer and injuries from alcohol-related traffic accidents. The found little relationship between life expectancy and income, infant mortality rates, violence, or lack of health insurance.

My sources were a Business Week article and the September issue of the medical journal of the Public Library of Science, PLoS Medicine.

INDUSTRY CODES | Toys, Apparel, Jewelry

The problem with company codes of conduct is that they lead to a Babel-like proliferation of interpretations of what is appropriate conduct and create the potential for absurdly large numbers of audits of local facilities. Also, international organizations that have analyzed the content of company codes are not impressed with the rigor of the standards incorporated in most of them.

A step forward out of the confusion of every-company-for-itself on the code front is the development of industry-wide codes of conduct. This at least reduces the number of codes and audits within a particular industry. Whether or not the industry codes are more rigorous than a given company code depends of course on which codes are being compared.

Three industries may exemplify the industry-codes approach – toys, apparel and jewelry.

The Toy Industry

The toy industry has developed the ICTI-CARE program under the auspices of the International Council of Toy Industries (ICTI), of which the British Toy and Hobby Association is an active member (each member of the BTHA must sign on to the ICTI code). The Toy Industry Association (TIA) is the U.S. member, somewhat less active than the BTHA. The ICTI Code of Business Practices includes monitoring and certification provisions. The ICTI code has been critiqued by the German Fair Toys Campaign, China Labor Watch and the Asian Labour Update (Asia Monitor Resource Center).

The Apparel Industry

The industry has developed the Worldwide Responsible Apparel Program (WRAP) Apparel Certification Program, led by the American Apparel and Footwear Association. The WRAP program has been described in some detail by Business for Social Responsibility (BSR) and the Resource Center for the Americas. It has been critiqued by the Maquila Solidarity Network.

The Jewelry Industry

An industry-code approach is being pursued by the jewelry industry’s nascent Council for Responsible Jewellery Practices, which is in part responding to the “No Dirty Gold” campaign by NGOs led by Oxfam and Earthworks.

COMPANY CODES | What Are They?

The Company Code of Conduct addresses
sustainability issues - social (workplace),
economic, environmental.

A company code of conduct is a statement of how seriously the company takes its environmental and social responsibilities.

The company code can refer to industry-wide codes and multi-stakeholder-initiative (MSI) standards, which are two other building blocks in the CSR framework.

Companies may create their code of conduct in response to governmental or NGO concern about the adequacy of the company’s social and environmental behavior.

A company code is a beginning because it establishes that the company not only plans to operate to ensure its financial survival but plans to do so while maintaining certain standards of conduct.

Extensions of the Company Code

The company code is the beginning of a multi-step program for bringing itself into line with public social and environmental expectations.

The second step is to identify what it might cost to fix workplace or environmental abuses, including increasingly those in the company's supply chain. For industries and situations where abuses are widespread, it may take years for a company to meet even minimal environmental or social standards.

A company and its executives – or an industry-wide coalition of companies seeking to improve practices – must decide how much and over what period to invest in CSR. This affects how soon it can meet mandated and voluntary standards. The company's and industry's response will depend only partly on the ethical concerns of its executives – it will depend also on how deeply rooted and extensive existing noncompliances are and how expensive it may prove to end them.

The company code typically articulates its mission in a way that recognizes that it sits at the intersection of three circles – markets, ethics and law, the common element of which is reciprocity (quid pro quo, fairness to stakeholders). The sustainable company must make a profit, must obey the law and must operate in an ethical way.

Examples of Company Codes

Among the many company codes that have been written, the following are of special interest: Aeon (Japan), Coop Italia, Dole, Hasbro, Mattel, McDonald’s, Nike, Otto Versand (German), Phillips-Van Heusen, Reebok, Timberland, Toys R Us, Disney and Voegele (Swiss). Smaller and less well-known companies with codes include Kesko (Finnish), Switcher (Swiss), Cutter & Buck, Eileen Fisher and Patagonia.

When the Council for Responsible Jewellery Practices was first set up, it drafted an industry code of conduct. Many of its members, like Rio Tinto, already had a company code of conduct and some produce well-regarded CSR reports.

The Weaknesses of Company Codes

Many companies who develop their own codes may find that this was an expensive and unnecessary step if the company then proceeds to adopt an MSI standard. The public relations and internal-efficiency value of an industry code or MSI standard is much greater than that of a company code, even a high-quality one.

The main weakness of individual company codes is that without some standards their proliferation adds to the confusion. Unique company codes make it difficult for suppliers trying to sell to multiple buyers, for consumers comparing company policies and practices, for retailers trying to factor CSR into their procurement, and for workers seeking to determine their rights.

In an attempt to sort through the confusion and look at the actual content of company codes, the ILO and OECD a few years ago discovered that only two-thirds of company codes they reviewed addressed workplace discrimination. Fewer provided for workplace safety. Only one-fifth addressed freedom of association or training. Fewer than 20 percent required one day’s rest in seven. Fewer than one-third commited the company to monitor implementation.

Evolving Corporate Strategy on a Company Code

Since company codes are being questioned, two main corporate strategies for developing a company code seem to be evolving:

• A company code is presented as just a first step. The code may be adopted as a preliminary to adhering to higher standards. In this approach, a company code is an acknowledged preliminary step before adopting an industry code or MSI standard. In this case, the company code will set standards somewhere higher than the level company is already achieving, but not at the level required by the industry code or MSI standard. The investment in the code should be kept to a minimum because the company will be reinventing the wheel.
• A company code is presented as a substitute for higher standards. Some company codes are designed give the company time to consider the cost and feasibility of adopting an industry-wide code or MSI standard. In this case, the company may design its code of conduct so that it is not challenging and creates no pressure for the company to set its standard above the level it is already achieving. The code’s main purpose could be as a place to refer NGOs and other public inquiries–the buck stops there. Such codes of conduct are properly criticized.

The social and environment issues facing companies go well beyond creating a code of conduct. They require implementation – monitoring, auditing and remediation, especially among suppliers. These issues point toward a challenging code of conduct and toward group solutions, whether at the industry-wide code level or through MSI standards.

Outlook for Baby Boomers Reaching Retirement Age

April 14, 2006 - How will the job market be affected by the wave of baby boomers reaching retirement age? One good piece of advice for most of them: "(1) Lower your spending in anticipation of retirement, and then (2) don't retire."

This is the topic of an article in the Washington Post today, "Working To Fix Our Fiscal Woes, by C. Eugene Steuerle, of the Urban Institute-Brookings Tax Policy Center. The main concern he addresses is that

[W]orries about ... imbalances in Social Security's bankbook [is] largely a work-related fiscal woe, as the number of workers supporting each retiree falls by an estimated one-third over the next 30 years. ... [A] postwar boom in the U.S. labor force is just now ending. Since around 1950, the percentage of adults who worked rose almost every year except in recessions. But now the great swell of working boomers is starting to retire, and most of the gain in female labor force participation is over. If Americans keep retiring at the same ages they do today, the share of adults who are working will fall markedly. The effect on the economy will be roughly equivalent to increasing the unemployment rate by 3/10 of 1 percent every year for 20 years straight starting in 2008. That means a lower rate of growth for workers, goods, services, and government revenues.

Steuerle spells out the fiscal implications of Americans working an average of five years more than they do today, say from 62 to 67 years old.

Since a typical 62-year-old couple today is likely to have at least one spouse who lives another 25 years, most couples need to line up resources for 30 years or more to play it safe. In short, the most important financial decision facing most people in their 60s is when to retire. ... Working longer helps the nation, too. Additional time on the job increases national income, while boosting the revenues needed to float government programs, including those serving the elderly. ... Workers on average would have an annual income 55 percent higher if they retired for five fewer years, saved some of their additional earnings, and delayed receipt of Social Security benefits.

Along the way, the problems with the funding of Social Security would, he says, be largely solved.

[L]ook out about four decades, when fiscal and Social Security problems are projected to be the most severe. ... Five more years of work would generate more in additional taxes to the government (including Social Security and income taxes) than the amount of the shortfall. That same five years would produce enough additional Social Security taxes alone to cover half of the shortfall, if benefits were kept constant.

With personal and national interests pointing toward working longer - is American business ready for the implications of this? What will it mean to have a workforce that stays on the job another five years?

This column is one of a series. Every other weekday it edits a column is submitted by ten prominent think tanks on a rotating basis (each think tank chooses its authors and topics) - American Enterprise Institute Brookings Institution Cato Institute Center for American Progress Center for Strategic and International Studies Council on Foreign Relations Heritage Foundation New America Foundation RAND Corporation Urban Institute.

IT Jobs by State - First Quarter of 2005

At CityEconomist we have been perusing data on IT jobs in the first quarter of 2006 and were surprised to find that Arizona, Illinois and Connecticut have been growing these jobs fastest of the 15 states with the largest IT vacancies. We have been looking at a two-year span, comparing this last quarter with the first quarter of 2004.

The data come from corporate web sites tracked daily with a web spider developed by my colleague Henning Seip of Skillproof. He checks on a quarter of a million job vacancies every day. We have been especially interested in IT jobs because IT is crucial in driving business innovation.

Arizona IT job vacancies grew 217 percent, Illinois vacancies grew 143 percent and Connecticut vacancies grew 136 percent between the first quarter of 2004 and the first quarter of 2006.

The next seven fastest-growing states were, in order, Washington, Massachusetts, New York, California, Texas, Florida and New Jersey. Only one state, Maryland, showed a decline in jobs (14 percent). The other four, slower-growing, states were Georgia, Pennsylvania, Virginia and the District of Columbia.

On the same basis as the state data, the U.S. metro areas with the fastest-growing IT vacancies over the past two years were Phoenix, where the vacancies doubled; San Jose, where they grew 170 percent, and San Francisco and Seattle, where they grew 130 percent. They grew 157 percent in the Chicago area and 122 percent in the Minneapolis area.

Only one of the 15 metropolitan areas with the most IT vacancies has lost ground in the last two years. That is Baltimore.

The growth rate has been slower in 2005-2006 than the previous year. Two metro areas in southern California – San Diego and Los Angeles – have registered a decline in IT job vacancies in 2005-2006.

The growth in job vacancies has been led by IT sales and marketing, which grew 132 percent over the two years and 42 percent during the most recent year, from the first quarter of 2005 to the first quarter of 2006.

It was followed in both periods by IT process design and IT management. What this suggests is that the IT jobs that are growing fastest are close to business operations – sale, process design and management of IT services.

U.S. jobs seem to be growing to keep pace with growth among IT service providers overseas.

New York City exemplifies the shift in demand for IT skills. Employer demand has increased 50 percent or more in eight skills areas in the first quarter of 2006 compared with a year earlier.

In order of available jobs, the skills that are gaining in demand are: Linux, Sybase, Perl, C# (Microsoft’s C Sharp), Peoplesoft, Offshore team coordination, SOAP and MCSE.

Meanwhile, demand for other skill areas has declined.

In order of available jobs, the declines are in: SAPDB2 (IBM), Websphere (IBM), Windows NT/2000/2003, MQSeries, Weblogic (BEA) and Wireless.

Programmers skilled in Java, Unix, SQL and HTML are in the greatest demand, with an increase of 24 percent or more openings for each skill in the first quarter than a year earlier.
Although software development is not growing as fast as other skill categories, it is still the largest category of skills required by employers.