Everyone is entitled to their own opinion, and we will be hearing a lot of opinions in coming weeks with respect to Mayor Levar Stoney’s budget proposal to raise taxes to fully fund the Richmond Public Schools strategic plan and address other urgent needs.
There’s opinion, however, but there are also facts. An informed public debate is undermined rather than enhanced when deeply misleading claims are introduced as revealed truths.
At the heart of Justin Griffin's critique of Stoney’s budget proposal is his eye-catching claim that the city is spending vastly disproportionate money on general government compared to other localities. Griffin claims — with no reference to line-by-line budget items — that there is at least $25 million waiting to be cut from general government functions if only the mayor had the courage to do so.
This claim does not pass the smell test for anyone who has followed the City Hall budget process for any period of time. Every year, without fail, the budget process is a fight, often a tooth-and-nail fight, down to the last dollar because needs are so great and resources are so scarce. Every line item in the budget is scoured by not only the mayor’s professional staff, but council members and council staff. One would have to believe that all officials in City Hall, elected and appointed, over the last several years are extraordinarily incompetent or negligent to think they failed to notice that there’s $25 million of fluff in the budget just waiting to be cut.
Here are the facts: Griffin’s claim is based on the state auditor of public accounts’ comparative local government report for 2017, which compares revenues and expenditures of local governments in Virginia.
Here’s what that report shows overall: While the cost of total local government operations in Richmond is larger than the average Virginia city -- $4,198 per person in Richmond compared to $3,740 per capita in cities statewide -- this is wholly accounted for by the greater level of federal dollars supporting such activities. Richmond gets $804 per capita from the federal government, compared to $339 per capita in cities statewide.
Current local property tax revenues in Richmond per capita match nearly exactly the statewide average for cities, and overall local revenues per capita in Richmond are about 6 percent higher than the statewide average for cities. Conversely, state assistance per capita to Richmond is actually 8 percent lower than in other Virginia cities.
In short, what the auditor’s overall report shows is that the local tax burden in Richmond is fundamentally in line with other cities in Virginia — as well as the fact that Richmond, especially its schools, should be getting a bigger share of assistance from the state.
Griffin never mentions this bigger picture. Instead, he seizes upon data showing Richmond with general government spending per capita more than twice as much as other Virginia cities. The report breaks down local spending into eight broad categories, such as education, public safety, public works, etc., with general government counting as one.
That data does look alarming at first glance, but the auditor warns that because of the wide variance in the kinds and quality of services provided across localities, “We caution users not to base conclusions solely on this report’s data.”
It turns out that the city auditor, Lou Lassiter, specifically examined the question of why general government spending in Richmond appears so high in a public report filed in August.
Lassiter, who reports to City Council, looked in detail at Richmond’s general government spending in comparison to Arlington County, Newport News and Norfolk. First, he found that the “localities reviewed reported a variety of information for this category so finding definitive comparisons were challenging and would require even further study.” In other words, the auditor’s report is not comparing apples to apples, but apples to many kinds of fruit. What kind of spending gets placed in each category is a matter of local reporting practice as well as the differing kinds of services localities provide, not a uniform statewide standard.
Second, Lassiter showed that $49 million of Richmond’s $91.9 million general government expenses include $13 million in city funding to GRTC, $19.4 million in funding to quasi governmental organizations, such as the Richmond Ambulance Authority, and $16.6 million in information technology spending, even though such services are used by all agencies. Other localities examined by Lassiter did not include IT as a general government cost. Removing those items makes Richmond basically comparable with other Virginia cities in this category.
Other significant expenditures Richmond counts as “general government” include retiree health care costs and the city’s nondepartmental grant program for nonprofit partners addressing a variety of needs, including homelessness and after-school programs.
In short, the claim that the city spends vastly more per capita on basic administrative functions compared to other localities is flat-out wrong. The total expenditures in fiscal 2017 of the 15 city agencies apart from Information Technology counted in the general administration category —things such as procurement, human resources, finance, and City Council staff--were just $36.9 million.
Here’s the upshot: Griffin’s recommendation of cutting $25 million from general government spending would involve eliminating major services that are of fundamental importance to the city’s well-being, like GRTC, or reducing City Hall to a completely dysfunctional shell organization. His underlying analysis is fundamentally inaccurate and misleading, both in the big picture and in the details.
No one doubts that City Hall has much work to do to become more effective, efficient, and responsive. Stoney has undertaken significant effort to do just that.
In his first month in office, Stoney commissioned Virginia Commonwealth University’s performance management group to undertake a review of city agencies. Its central finding was that the key to improving City Hall as a whole is improving the functionality of effectiveness of internal city services: procurement, human resources, finance and information technology.
The work of these units impact every agency and every resident, because they impact how efficiently agencies can hire people, obtain goods and services, pay for them and communicate with each other and the public. If we are interested in improving city services for all, these general government functions should be strengthened: stronger systems, stronger personnel and in some cases more personnel and more spending. Indiscriminate cuts to these major functions end up making everything in City Hall worse.
In the past two years the Department of Finance has rectified the major issues inherited from the previous administration with comprehensive annual financial reports being completed on time for two consecutive years. Stoney has consolidated all of the internal services under the capable leadership of the deputy chief administrative officer, Lenora Reid, who oversaw the finance turnaround. Stoney has also undertaken other organizational reforms, such as the establishment of the Department of Citizen Service and Response and the creation of an Office of Performance Management within the Department of Budget and Strategic Planning.
The Office of Performance Management piloted a new performance-based budgeting process with seven city agencies for the upcoming budget, and for the past two years city agencies have prepared and regularly updated detailed annual plans detailing goals, action plans, and costs. Beginning in FY 2020, following passage of an ordinance sponsored by council members Ellen Robertson and Kristen Larson, similar action plans by agency will be made available to council and the public on an ongoing basis.
This is the real work of making a complex organization function more effectively and transparently over time, while continuing to meet present needs. This work needs attention and support, but it also needs to be judged in a time frame of three to five years.
Government is not a big corporation in which a chain-saw-wielding chairman can come in and force a massive reorganization to please the stock market. Every government agency is doing something that is important to someone, and in this city of profound human need, that something that city government offers — assistance finding a job, an open recreation center to use on the weekend or a referral for an elderly resident in need — can make an enormous difference in people’s lives. That’s why the hard work of making things work better, even a little better, is of such moral urgency: There is neither time nor money to waste.
It’s tempting to believe that there is a gigantic hidden pot of wasted money hidden in City Hall that we could tap into and solve all our problems. The reality is we have to make hard choices; and if you are the mayor and want to change things that people in Richmond have complained about for years, like our schools and our roads, you have to take risks.
That’s what the Stoney budget proposal is about.
Thad Williamson is an associate professor of leadership studies and philosophy, politics, economics and law at the University of Richmond. He has served two stints in Richmond city government, most recently as senior policy advisor for Mayor Levar M. Stoney between January 2017 and June 2018.