Cape Issues… We’re Not Alone in Our Problems

Several years ago a group of county residents began meeting to discuss present and emerging issues facing Cape May County. Many in the group felt that traditional operating strategies, public sector collective bargaining contracts, and ossified way of doing things were creating an economic model that required an ever increasing source of new revenues. Like the issues facing the national and state government, the dependency on always increasing taxes will result in our economic collapse. Insufficient revenues to support every level of government operations, at current service levels, will require a new vision of how government services are to be provided.
These discussions resulted in the group adopting the goal of re-inventing county and local government in order to lower taxes while achieving operating efficiencies. Cape Issues broke into sub-groups initially to study the following topics:
• An information system to keep citizens up-to-date on county and local budgets and best practice proposals.
• Improving the operational efficiency of the county’s education system
• Establishment of a centralized county emergency dispatch system
• Re-think the present system of local trash collection
The results of these preliminary discussions, along with the collected research, were summarized in a number of articles published in The Herald. However, much more needs to be done since the continuing reduction in state aid and the diminished availability of surplus funds, will cause property taxes to continue to increase as a proportion of local revenue. Although the 2 percent property tax levy cap provides a significant revenue control on all municipal appropriations, the nature of the exempt expenditure categories, e.g. pensions, health benefits, debt service, and capital expenditures, will certainly result in the local purpose tax to exceed the 2 percent cap.
Fortunately, examples of changing the status quo can be seen at the state and county level. With the enactment of PL 2011, C. 78 the governor and the Legislature made substantial changes to the state pension plans. It has been estimated that these changes have reduced the retirement system’s unfunded liability by some 30 percent. However, the total unfunded liability for public sector retirement costs remains as:
• $ 25.6 billion for state-funded employee pension systems
• $ 59 billion for post-retirement medical benefits, with no funds reserved for future costs
• $10.6 billion for municipal and county pension systems
• At least $ 12 billion for municipal and county retirement medical benefits
In Cape May County, recent years have seen the Board of Chosen Freeholders examine county operations to determine whether or not given county operations were needed and, if so, could they be delivered in a more cost-effective manner. These deliberations resulted in changes in how services were provided with the county deciding to contract out certain operations.
Research by Cape Issues has resulted in the identification of other state groups interested in re-inventing government. Examples include:
• Task Force on the State Budget Crisis: The Task Force works in six states (California, Illinois, New Jersey, New York, Texas, and Virginia) to uncover and analyze structural budget deficits and examine policy options that could close the deficits.
• Beyond the Bottom Line- Ideas for the Future of Public Investment in Minnesota: A group of six Minnesota Foundations support decision makers in advancing strategies design to reform public services in the state.
• SAGE Commission (New York): The Commission is conducting a comprehensive review of State Operations with the goal of saving taxpayers’ money, increasing accountability, and improving the delivery of government services.
• Facing Our Future (New Jersey): Facing Our Future is an independent, objective effort to build understanding about New Jersey’s systemic fiscal problems, to stimulate informed public discussions about the impact of those problems on our state’s future, and to trigger action to address the need for systemic change.
• GEM (Morris County, New Jersey: GEM (Government Efficiency Movement) is an effort to provide an analysis of best practices, redundancy/excess capacity, strained resources, labor intensive and best practices throughout Morris County with an eye toward shared services/consolidation.
This article is substantially based on a paper entitled “Updated Report with Options Analysis” issued by the Facing Our Future group in February 2012. Readers are encouraged to read the Report in its entirety on the Facing Our Future website (www.CNJG.org/FacingOurFuture). The basic premise of the report is that New Jersey’s fiscal problems, at all levels, are broader and deeper and projected to keep growing. Because of the complexity of our fiscal problems it becomes imperative to re-think how government should operate.
Some of the options cited by Facing Our Future include:
• Centralizing emergency response systems: At least two counties in New Jersey, Gloucester and Morris, show success in centralizing the emergency response systems for all or at least part of their jurisdictions.
The Gloucester County program recognizes the high priority that the citizens place on emergency services, and in continuing to provide them through local government at the same or higher levels of service than provided in the past.
• Combining efforts to maximize special services: The Report cites several examples of school districts joining to maximize cooperation to provide special services.
• Consolidating Information Technology (IT) Services and updating aging infrastructure: The report includes several examples of how some states and local partnerships have improved efficiencies in IT while generally achieving between 25 and 50 percent savings associated with information technology operations.
• Identifying creativity and change in purchasing operations: Many examples are given of creativity and changes in purchasing operations.
• Implementing county administration of school districts: Consolidating the administrative and business office operations, without changing the instructional and student service programs, would save taxpayers considerable amounts.
• Right-sizing deployment (police, fire emergency responders): Available data shows that more than twenty percent of local spending goes to one area: police. Recent actions have shown that police and safety services have been subject to cost reduction and hollowing out of services. County and local governments need to join together to make more informed decisions on right-sizing these operations enabling better resource allocation for these major budget items.
• Sharing examples of municipal consolidation: Princeton Borough and Princeton Township provide an immediate example of citizen initiative for change through their recent vote to consolidate- the first municipal consolidation in fourteen years.
• Supporting County Wide Assessment: Possibly the most widespread best practice in government, countywide tax assessment increases accuracy and fairness, reduces appeals, eliminates the need for costly revaluations and ensures annual assessment.
Cape May County is a relatively small area which includes: 17 school districts, 10 police departments, and 11 emergency call centers (or Public Safety Answering Points). Consolidating the senior administrative positions of these organizations would not only save millions of dollars but also would put more police officers on patrol, and more resources into the classrooms.
The need to re-think what services government provides and the manner they are delivered becomes urgent as the economy tightens and taxpayers are financially stressed.
Thoughtful discussions need to occur between the public and decisions makers lest decisions be made on the basis of political patronage under the influence of special interests and the powerful public-sector unions. It is in everyone’s best interest to study these difficult issues and become involved in the processes that will result in successful implementation strategies.