Letter: Why We Need a Breakdown of Fairfield’s Budget by Service

Summary: Fairfield’s annual operating budget should provide a breakdown of the cost of each service so that the people and their elected town representatives can make informed decisions about which services they want and can afford from their government.  The budget should also quantify the effect of  state and federal laws that require the town to provide certain services or to pay more for services so that the people can address their state and federal elected representatives about them.

In a representative democracy, the people, through their elected representatives, are supposed to decide which government services they want and can afford.  In order to make these decisions, the people must know the cost of providing each service.

Some services in Fairfield, particularly on the education side, are mandated by state and federal laws, and their cost is often not fully funded with grants from Hartford or Washington.  The people can address their elected state and federal representatives about these mandates and their funding only if they know what they are and what they cost.    

Accordingly, in the interests of good governance, both the Town and BOE budgets in Fairfield should identify these state and federal service mandates and their unfunded costs.

Whether they are funded or not, the actual cost of fulfilling state and federal service mandates, as well as the cost of providing most other government services, is significantly influenced by other state mandates that require, for example, collective bargaining with teachers and other town employees, binding arbitration that puts the ultimate decision about salaries, benefits and work rules in the hands of arbitrators who are not accountable to the people, and prevailing wage rate requirements that force Fairfield to pay a significant premium for public construction projects.  As is true for “service” mandates, the people can address their elected state and federal representatives about these “process” mandates only if they know what they are and what they cost. 

Accordingly, in the interests of good governance, both the Town and BOE budgets should identify these process mandates and their costs.

All government services and processes that are not mandated under state and federal law can be addressed at the local level through the Board of Selectman, the Board of Education, the Board of Finance and the Representative Town Meeting.  However, current Town and BOE budgets do not provide the information that the people and their elected representatives need in order to decide, based on their collective assessment of costs, benefits and affordability, how much, if any, of a particular service they want, and whether that service could be provided at a lower cost, perhaps though privatization (e.g., like Fairfield’s trash collection).

Because the people and their elected representatives lack the information they need, the budget review process in Fairfield has been ineffective and frustrating for all concerned, particularly in recent years under adverse general economic conditions when town budgets and taxes have continued to rise in the face of lower incomes, high unemployment, and declining home and asset prices for Fairfield taxpayers.

The current budget approval process calls for the BOE and the First Selectman to submit their budgets for the coming June 30th fiscl year in early February, and for final budgets to be approved by the RTM three months later in early May.  These budgets, which have risen every year since at least 1998-99 to over $272 million in the current fiscal year (i.e., ~$4,600 per capita and ~$13,250 per household), are typically accompanied by explanations about how various cost savings have reduced what would otherwise have been even greater increases due to unavoidably higher costs for wages, benefits, enrollment growth, debt service, emergencies, commodity prices (fuel oil, electricity, gasoline, asphalt, etc.) and other factors that are simply beyond anyone’s control.

Attempts by the RTM to cut the Town or BOE budgets “across the board” because of concerns about affordability have been met with strong resistance and outcries that any reduction would endanger public safety, hurt the children, hurt seniors, destroy property values, and/or lower our bond rating and raise our debt service costs. The result of this dysfunctional budget process has been an average annual increase of 5.2% for the past 14 years (1998-1999 to 2012-2013), more than twice the rate of inflation (2.45% average for the U.S. CPI) over the same period.

Making matters even more difficult and less responsive to good governance, the RTM is not allowed (at least based on the current Town Attorney’s interpretation of the Town Charter) to cut Town department budgets by some amount, say 2%, and then trust the First Selectman and department heads to make good decisions about how best to manage with less.  Instead, if the RTM wants to cut the budget, it must reduce specific line items within specific departments, even though it cannot know what the actual effect of those cuts will be when the First Selectman and the affected department head(s) decide how to implement them.  And of course, like the threat of an overall budget cut, any proposed cut in any given department is met with strong partisan opposition and public outcry about the inevitable dire consequences. 

Ironically, the RTM’s inability to impose a cut at the department level does not apply to the BOE, which from an RTM perspective is simply one very large line item ($149 million, or 55% of the total budget).  The RTM can cut the budget submitted by the BOE, but it must do so without knowing what the effect of that cut will be after the BOE, in consultation with the Superintendent, decides how to implement it.  This, of course, makes it very difficult for RTM members to justify their decision to cut in the context of all of the worst-case possibilities that are then used to motivate strong opposition from concerned parents and teachers through well organized groups like the PTAs.

For example, the current Town budget provides a breakdown of costs by department, on which basis:

• We know that the town budgeted $4.4 million on line 7010 for “Library” and another $0.6 million on line 56180 for “Library Materials,” but we don’t know how much it costs to operate the Fairfield Woods branch library versus the Main Library, and thus we don’t know how much money we could save if we closed the FW branch or reduced its hours from the current 64 per week.  We also don’t know how much it costs to provide various services within the libraries, such as “Express Videos and DVDs.”  If the RTM cut the $5 million budget by 10%, it would not know how that cut would affect specific services or service levels (e.g., hours of operation). 

• We know that the town budgeted $14.1 million on line 4010 for “Fire” and $14.75 million on line 4030 for “Police,” but we don’t know what it costs for various services and service levels within these budgets, so we don’t know how much we could save by closing one fire house or eliminating one patrol car from every shift.  Not knowing those costs, the people cannot evaluate them against the benefits they provide (e.g., faster response times to emergency calls).

Meanwhile, the BOE provides excruciating detail in its 179-page budget document, on which basis:

• We know that the BOE budgeted for 67 sections of World Language instruction at Ludlowe HS, but we and our elected representatives on the BOE don’t know how much it costs per student to provide four years of instruction in Italian and Latin in both high schools, including the cost of using classrooms to offer courses that may attract only six students.

• We know that the BOE budgeted $9.6 million for Teaching Staff at Ludlowe HS, but we and our elected representatives on the BOE don’t know how much it costs per student to provide each of its 24 different “offerings” in the Physical Education department (including Pickleball, Pilates, Power Walking and Yoga), and we don’t know how much it costs per student to provide each of the 63 athletic teams for boys and girls (from Cheerleading to Volleyball, many of them at three levels – Freshman, JV and Varsity) in both high schools.

• We know that the BOE budgeted with great precision for a 0.1 FTE staff change in Elementary General Music, but we and our elected representatives on the BOE don’t know how much it costs per student to provide a Concert Band and Wind Ensemble, a Concert Orchestra and Symphonic Orchestra, a Jazz Curriculum, Voice Ensembles, and Beginning Piano Keyboard, among other music offerings, in both high schools.

• We know that the students-per-teacher load for Home Economics is “95 Lab/125 Non-Lab,” but we and our elected representatives on the BOE don’t know how much it costs per student to provide multiple courses in cooking and sewing (e.g., Culinary Arts, Fashion and Textiles Technology, Fashion Merchandising and Design, and Food Services) in both high schools.

Accordingly, in the interests of good governance, both the Town and the BOE budgets should provide breakdowns of the costs of the services being provided.  Whenever possible, these breakdowns should include the cost per user or per student.

It is important to acknowledge immediately, that providing budget breakdowns by service is far more easily said than done.  Any breakdown of costs involves judgment.  In general, direct costs (e.g., the cost of a certified teacher, a paraprofessional, and instruction materials) can be identified fairly easily, but allocations of indirect costs and overhead (e.g., the cost of a classroom and of administrative and curriculum support) can be highly subjective.  Judging from private-sector experience dealing with the same problems, cost breakdowns do become better and better over time as overhead allocations are reviewed and refined.  It is also important to acknowledge that even when the cost breakdowns are considered to be reasonably accurate, there remains considerable subjectivity on the other side of the analysis when it comes to measuring the benefits produced by specific services.  Notwithstanding these challenges, the people of Fairfield cannot have the debate they must have about the services they want and can afford from their government without this information.

Even though initial cost-of-service breakdowns may not be perfect, they can nonetheless be extremely helpful to budget-control efforts because there is always “low-hanging fruit” to be harvested when cost-benefit thinking and analysis is first applied in any organization.   Thus, although both a comprehensive breakdown of costs by service and the ability to measure benefits with confidence can take several years, the budget process can be immediately enhanced by asking department heads for their own judgments regarding cost effectiveness and performance.

Accordingly, as part of their budget requests, department heads should be asked to identify any services they believe should be reviewed from a cost-benefit standpoint, and they should explain how the performance of the services their department provides should be measured.

Finally, even before budgets are submitted in early February, elected officials should be empowered to request a manageable number of cost breakdowns for specific services.  Some examples of questions that elected officials might ask are as follows:

• Which high school classes have the fewest number of students and what does it cost per student to provide those classes, including the opportunity cost of the classrooms used.
• How much does each of the 63 athletic teams at both high schools (126 total teams) cost per participant?
• How much does the music program in the high schools cost in excess of any minimum that may be mandated by the state, and what is the cost per participant?
• How much does it cost to provide what is essentially a free Blockbuster service, including what is billed as the “newest and hottest releases” for library members, and what percent of total circulation does this service represent?
• How much does it cost, in addition to the salary of $91,989 for a Tree Foreman, to provide a municipal tree service through the DPW?
• How much does “Marina Maintenance” cost, and how much of this cost is covered by boat fees?
• How much does each of the 17 Parks & Recreation programs cost (e.g., softball, soccer, sailing, tennis, basketball) cost and how much of this cost is covered by user fees?

Accordingly, at any time during the year, elected officials should be empowered to request, as part of the next annual budget review, a manageable number of cost breakdowns for specific services.

A closing observation from Thomas Friedman:

We’re leaving an era of some 50 years’ duration in which to be a president, a governor, a mayor or a college president was, on balance, to give things away to people; and we’re entering an era – no one knows for how long – in which to be a president, a governor, a mayor or a college president will be, on balance, to take things away from people.

http://www.nytimes.com/2012/05/20/opinion/sunday/friedman-do-you-want-the-good-news-first.html?pagewanted=all