Last week’s release of a NYS Health Foundation- funded report by Rochester’s Veterans Outreach Center sheds light on the complex needs of returning vets—Coming Home to Caring Communities, A Blueprint for Serving Veterans and Families. Full disclosure, CGR had the privilege of helping to author the blueprint.

The report reminds us that there’s a moral imperative to improve service delivery for a deserving and vulnerable population. Our country hasn’t yet found the perfect way to embrace our veterans as they return to civilian life. The Blueprint is an experiment in replicating and “scaling” effective practices across a state, an approach that highlights an emerging shift in the federal approach to veterans’ services.

The Need

Over 6,200 families have lost their soldier, more than 46,000 soldiers have returned physically injured, and thousands more await diagnosis of “invisible wounds” such as post-traumatic stress disorder (PTSD). The toll of combat is not unique to this generation of veterans, nor do they exceed the number of Vietnam veterans. The change in veteran population, however, is significant enough that it requires a different approach to providing services.

Returning veterans from Operation Enduring Freedom (Afghanistan) and Operation Iraqi Freedom (Iraq) tend to be older, include more women, and be more geographically dispersed. Families and communities are uniquely affected because of the heavy reliance on members of the National Guard and the Reserves, individuals who are settled members of communities across America. These soldiers were called away from their families and civilian jobs, often for multiple deployments. The central military base providing built-in support for families during deployment or reintegration is no longer the norm.

Not Just the VA’s Business Anymore

For these reasons, reintegration is a local community issue, not just a matter for the Veterans Administration. Changing needs demand corresponding changes in service delivery, outreach and points of access. One example: NYSHealth’s 2011 needs assessment of NYS veterans (conducted by RAND) reports a large majority of veterans and spouses prefer to access health care from the community rather than from VA providers. Many have other, non-VA health insurance. This is borne out by VA data showing that it doesn’t reach the preponderance of eligible veterans. This suggests that education for non-military health providers in areas such as PTSD and military benefits should be more of a priority. It’s also essential to do a better job of identifying veterans returning to local communities. Moreover, the needs themselves have expanded to require more emphasis on family supports, employer training, and education for community providers such as schools and healthcare sites.

Research at the state and national levels calls for the Department of Defense and the VA to partner more closely with communities. The VA, under General Eric Shinseki’s direction, has recognized that it cannot serve veterans alone. Recent funding decisions, such as the Supportive Services for Veterans Families grants, have been aligned around this community-based, public-private partnership concept.

The Blueprint

There are countless well-intentioned individuals, coalitions and organizations who want to “support vets.” What is rarer is a documented approach for doing so in a way that ensures quality care and sustainability. This blueprint uses a case study of the Veterans Outreach Center, the nation’s oldest nonprofit serving veterans, to articulate and describe the core elements of a community center-based approach. The Blueprint offers a detailed roadmap to plan, implement and fund such a model, which should allow other communities to adopt the approach modeled by the VOC, to more effectively support those who have served in the military.

Over the last four years, CGR has been proud to work (often supporting the VOC) with nine NY counties to better understand what a more coordinated network of services for veterans and their families would look like, and we know that communities across the state are engaged in similar efforts. Our hope is that rather than starting from scratch, they find the Blueprint a useful tool in building more “Caring Communities.”

We are all responsible for ensuring that returning vets get the support they need. The Blueprint will be most helpful for service providers directly engaged with veterans or those who have a personal stake in improving the quality of life for veterans. But all of us have a role to play in recognizing that veterans and their families are a growing and embedded part of our community well-being, even if you don’t live near an active base.

We should be grateful to the French. We need exemplars—countries whose policies we embrace and countries whose polices we avoid. France seems determined to set a bad example, if they expect Hollande to follow through on his promises. This is a nation that hasn’t run a budget surplus in 35 years, where labor costs have been rising in the face of blistering global competition, and where the public sector controls more than half of the economy. Hollande promises to hire more public sectors workers, raise the marginal tax rate to 75%, and reverse Nicholas Sarkozy’s feeble encroachment on the entitlement mindset of the French worker.

Sarkozy has changed the competitive landscape in France only slightly. And his successes were hard fought. In 2010, his proposal to raise the retirement age from 60 to 62 sparked widespread protests—his success then contributed to Sunday’s defeat. Francois Hollande has promised to roll back this change, despite the fact that life expectancy in France continues to rise. It was France’s last Socialist president, Francois Mitterand, who lowered the retirement age to 60 from 65 in 1982.

The world is a much more competitive place than it was in 1982. “Emerging Asia”—Asia less Japan, Singapore, Hong Kong, South Korea and Taiwan—contributed about 9% of global GDP in 1982, rising to 19% in 2011. China’s share alone rose from under 3% to nearly 10%. Countries outside Asia have emerged as competitors, too. Brazil’s share of world output doubled to 3.5%. Many of the countries of Eastern Europe now compete in global markets. FYI, the U.S. share of global GDP fell from 30% in 1982 to 22% in 2011. And France’s share fell from 5.3% in 1982 to 4% in 2011.

Not only is France saddled with a sclerotic public sector and high labor costs, it may be failing to prepare a 21^st century labor force. U.S. News and World Report ranked the world’s top universities in 2011: France held just two spots in the top 100: École Normale Supérieure and École Polytechnique, both in Paris, ranked #33 and #36, respectively. South Korea had three on the list, China five, Japan six and Australia eight. The U.S. boasted 31. At the K-12 level, France’s students perform in the middle of the pack. See PISA international student assessment for more.

Mitterand’s policies were more centrist than his rhetoric, of course, and Hollande may follow Mitterand’s example. His public pronouncements since the election suggest that he’s trying to walk back off the plank of his own campaign promises.

Hollande is likely to play a productive role in addressing Europe’s economic crisis. He will attempt to persuade Europe to soften the stern austerity imposed on its more profligate members—Greece, Italy, Portugal and Spain. A few months ago, Americans debated whether Congress should allow the payroll tax cut to expire. This would have driven up labor costs but reduced the budget deficit. While fiscally prudent, it would have imperiled the recovery. We chose not to take the gamble.

Europe faces a similar choice. The Great Recession put to the test the Euro’s dubious premise—that currency union can survive outside of political union. Europe’s creditors and debtors are in different countries: The “all for one and one for all” we struggle to maintain in the United States is far more difficult in the distinctly disunited states of Europe. Yes, if the Euro is to survive over the long term, the region’s spendthrifts must behave better. But the dose of cod liver oil administered by Merkel’s German government—with the full throated support of Sarkozy’s French one—is proving too much to swallow. Like our payroll tax reduction, the process of persuading Greece to act more like Bavaria will have to wait.

Sarkozy has been a quixotic leader, and stylistically at odds with France’s image of a president, more like a flamboyant American political figure than a reserved French one. Perhaps that explains why Americans seem to understand him—and may miss both his policies and his reflexive support of ours. Not to mention Carla Bruni. Tant pis.

Are there ways to mitigate these tax shifts? As a relative newcomer to New York State, I’m wondering whether or not the approach to structure change through annexation in my former home of British Columbia might resonate in this part of the world.

In B.C., a municipal annexation is approved by the Province if the municipality has requested the annexation, property owners and residents of the annexation area have been informed of the proposal, and the majority of the owners do not object.  Annexations can enable a municipality to more effectively manage growth, provide necessary services, or address fairness issues.  Over the past 30 years, dozens of annexations have occurred across the Province.

Stakeholders may object to an annexation proposal because it results in a loss of land-use planning control, a loss of tax revenues, or promises a change in community identity (e.g. I want to live in the country, not in the city).  In collaboration with communities, the Province has developed a number of strategies to alleviate some of these concerns.  Here are a few examples:

• If the parcels in the annexation area will see a property tax increase as a result of moving from one jurisdiction to another, the Province can require that the taxes are phased-in over a five-year period in increasing 20% increments.

• If the parcels in the annexation area include a significant industrial property that is a regional asset, then the Province can require the annexing municipality to share the tax-base revenue with one or more neighboring local government.  For example, in the Elk Valley, the municipalities of Sparwood, Elkford, and Fernie and the Regional District of East Kootenay share the tax base revenues from the industrial coal mining properties in the region (see here for more detail).

• If a municipality is annexing an industrial property and the business is concerned about higher taxes as a result of annexation, the Province can tie the industrial and residential tax rates together by imposing a tax rate ratio on the municipality (e.g. 3:1 for industrial to residential.  Note that there are eight property classes in B.C.).

Municipal annexations are each unique and have their own circumstances and challenges.  In some cases, annexation may not be feasible and alternatives need to be explored.  Recent ideas developed by B.C.’s Regional District Task Force for the proactive management of municipal jurisdictional boundaries include the creation of a fringe area planning committee, the development of a fringe area planning policy and the use of cross-acceptance of land-use plans.  While a small number of B.C. local governments have developed fringe area planning policies (for example, see the Thompson Nicola Regional District policy here), the other ideas are yet to be explored in practice.

The purpose of highlighting these ideas from B.C. is not to suggest that they should be applied wholesale to NYS. B.C. covers a large geographic area that is roughly 6 times the size of NYS. Most of this area is sparsely populated and unincorporated. Of the 4.4 million people living in the Province, more than half are located in the two dozen municipalities that make up greater Vancouver. Moreover, the Province retains significant power over local governments—they lack the Home Rule provisions enjoyed by their NYS counterparts (see an article discussing Home Rule by Squire Sanders & Dempsey attorney Kenneth Bond[1]).

I raise these examples to ask whether we might think about structure change differently. How can we move away from seeing restructuring as a zero-sum game and work to find common ground instead?  The answer to this question lies with the stakeholders and the communities themselves.

We need a simpler system. Complexity is expensive by itself—we spend money simply keeping records and paying professionals to figure out what we can and can’t claim. The Taxpayer Advocate’s Service (TAS) of the National Taxpayer Advocate (appointed and funded by Congress) estimated in 2010 that taxpayers spend 6.1 billion hours filling out taxes each year (down from an estimated 7.6 billion hours in 2008, probably courtesy of tax software). 60% of Americans pay someone else to complete their tax forms. In 2008, TAS put the total cost of compliance at $163 billion, about 11% of total tax receipts.

The number and complexity of tax breaks opens the system to special interests—although my “special interest” may be your “critical need.” Fewer tax breaks would let us cut rates, simplify reporting and make the whole system more transparent. Both at the state and federal levels, our tax system looks like a Christmas tree that’s been decorated by 6 year olds—no order, and too many ornaments.

Take New York State. Thirty-four credits adorn the New York Personal Income Tax. All good things, of course—there’s the farmer’s property tax credit and the green building credit and the credit for purchasing an automated external defibrillator. We have a credit for volunteer firefighters, biofuel production, solar energy equipment purchases, and rehabbing historic homes. Some cost little—the green building credit cost us $400,000 in 2012. Some are sizeable: Child care and dependent care credits cost $341 million and the college tuition tax credit cost $287m. The Corporation Franchise Tax includes credits for historic barns, land conservation easements, security training, and film production (movies, not Kodachrome). Again, the cost varies. Security officer training cost about $300,000 while credits to the motion picture industry totaled about $340 million. The Sales Tax is a patchwork quilt. Food sold at senior citizen housing communities or through vending machines is exempt, as are pollution control equipment, machinery and equipment used in production, and food sold to airlines. What’s the problem? Tax preferences fly “under the radar,” making them easier to pass and harder to cut. Unlike budgeted expenditures, they are hard to measure and are typically open to all comers, thus are potentially unlimited.

Federal exemptions that affect state taxes are also numerous. The exclusion of capital gains on home sales is expected to cost NYS $1 billion in 2012. Capital gains on inherited property also escape taxation, costing NYS an estimated $1.1 billion. See NYS Tax & Finance’s report for more detail.

At the federal level, the size of the tax break problem is well documented. Called a “tax expenditure” by wonks, these are activities that are “financed” by agreeing to NOT collect a tax. The Congressional Budget Office regularly published an estimate of tax expenditures. A recent report showed that tax expenditures—those taxes we agree not to receive—cost us more than Medicare, Defense or Social Security. Eliminating tax expenditures would be nearly equivalent to doubling social insurance taxes.

Eliminating tax breaks is easier said than done. Certainly some are egregious and would likely disappear if put to a vote. Yet many—think of the mortgage interest deduction and the exclusion of capital gains from residential real estate—have a broad constituency. Probably most are well-intentioned. Some—consider the Earned Income Tax Credit—are a critical part of our social safety net.

The problem even has a local flavor—NYS industrial development agencies are often petitioned to confer tax breaks on local businesses, burdened by high cost and vigorous competition. If the business would leave without assistance, the net benefit is clear. Yet when the tax break goes to a firm with local competitors, the benefit to one may be offset by harm to another. The taxes of one may support a tax break to another.

In my rare utopian moments, I look for a leader who will broker a Grand Compromise that sweeps away myriad preferences, simplifies the tax system and puts our economy on a sound fiscal path. Unfortunately, the debate from now through the election will be reduced to a false choice between spending less or taxing more, between a Paul Ryan budget that many won’t support and a “Buffett Rule” with only symbolic impact.

Let’s say I wanted to invest in a technology company.  Being a devoted iPhone user, I am predisposed to liking Apple products.  With a few clicks of my mouse I find Apple has earnings per share (EPS) of $13.87.  Is this good?  I quickly search for Google and learn its EPS is at $8.75.  Should I be convinced that Apple’s numbers make it a better investment?

As a good consumer I should ask: Are the metrics accurate?  EPS is a well-known measure of corporate profitability and my source was reputable.  Are the metrics comparable?  In this case, yes, but only after I checked that the EPS numbers covered the same time period.   What do the metrics tell me?  They give me insight into Apple’s and Google’s profitability.

Clearly, that is not enough.  I’d like to know whether their EPS numbers met Wall Street expectations.  I need to track historical performance; read some forecasts; learn about planned products and global expansion, etc.  EPS is a good metric, but it only starts me on the path to making an informed decision.

In my day job, I often compare the performance of one local government against another.  Using CGR’s “Govistics” tool, I discover that the City of Rochester spends $376 per capita on police services, Syracuse spends $331 and Buffalo $291.  So do I vote in the next mayoral election for someone who is committed to bringing police costs in line with our peer upstate communities?  Or, conversely, do I vote for the candidate who promises to maintain the city’s strong commitment to safe streets?

Again, are the metrics accurate?  The data are the most up to date (2009) that let you compare communities across the U.S.  The data source is also well documented and reliable.  Are the metrics comparable?  The site says the data are from the same source and calculated the same way.  What do the data tell us?  They’re about total costs relative to the population.

But again, this just starts me down a path.  I now want to know more about the demographics of each city; study their crime rates, policing strategies (what is driving the number of police officers?), or the average age of the workforce.  Bottom line: Benchmarking with data is what starts good investigations and helps direct you to where to dig deeper.

Benchmarks are useful as conversation starters because they:

• Point out differences and similarities;
• Provide context for fiscal/operational goals; and
• Provide accountability for performance.

Benchmarks cannot:

• Definitively identify what is right or wrong;
• Identify appropriate fiscal policy or staffing levels; or
• Tell the whole story.

In today’s sound bite society, we are bombarded by information. Benchmarking can help you figure out what’s noise and what’s not.  But, great leaders use data and benchmarks to start conversations, not finish them.

It’s not all that surprising, given the political realities: Senate Republicans depend upon redistricting and other elements of the political status quo to maintain control of the chamber despite having less than a quarter of all registered voters enrolled in their party. Assembly Democrats have been all too happy to respect their “gentlemen’s agreement” with the Senate Republicans to each draw the lines in their respective houses. Gov. Andrew Cuomo, who also promised to support independent redistricting, had other priorities. And voters, well, we don’t care enough about this once-a-decade process of truing up legislative boundary lines to population changes measured by the decennial census to scare the lawmakers into giving up control of it.

So redistricting remained in the control of lawmakers, carried out by a 6-member task force of lawmakers controlled by the majority leaders. Senate Republicans added a district to the 62-seat house and reconfigured lines in the Westchester and Albany areas so that they will likely be able to enlarge their precarious, 32-30 majority by two seats. Assembly Democrats drew maps that will likely allow them to bolster their much larger majority by four seats. (See analysis and maps comparing old and new districts by New York World and Center for Urban Research.)

So what did all this mean for the Rochester area? While there weren’t radical changes, some of the tweaks are unsettling. Several Senate districts that lean Republican in Western NY had to expand due to population loss in our area, and so 2 Buffalo-centered districts now reach into Monroe County. One, District 61, grabs a piece of the City of Rochester that contains the University of Rochester Medical Center. This means the area’s largest employer will officially be represented by a Buffalo-based senator if the incumbent in District 61 is re-elected, though of course, every one of our Rochester area senators promises to continue looking out for the medical center’s interests in Albany.

The second, District 59, will grow to encompass Wheatland, Henrietta and therefore the Rochester Institute of Technology.

Independent redistricting was carried out this year, as discussed in an earlier post, by Common Cause New York, which drew a full set of Assembly, Senate and Congressional maps focused on keeping the districts equal in population size as much as possible and keeping together “communities of interest” (using data on race, ethnicity, income, homeownership, mix of jobs, etc.). Common Cause’s map for the Senate, for example, would have created a Rochester-centered Senate district encompassing the City of Rochester as well as the Towns of Irondequoit and Brighton, fertile grounds for a Democratic candidate.

Although the Common Cause maps were apparently not very influential in the redistricting of the State Legislature, they may have had a significant impact on the maps eventually created for Congress. A federal judge drew those maps after Assembly and Senate leaders couldn’t agree on the lines. In Rochester, the judicial map creates a Monroe County-based Congressional seat, much as the Common Cause map did. This is a big improvement over our current, somewhat infamous “earmuffs” district stretching from Buffalo to Rochester along Lake Ontario.

With Common Cause maps as an example of “what could have been” under an independent process, it’s even more disappointing to see that put off until 2022. And the specific reforms adopted by the Legislature leave open the question of whether we’ll truly see any change even then.

Reminiscent of St. Augustine’s plea for chastity and continence—“but not yet,” lawmakers passed a constitutional amendment that will create a 10-member commission of non-legislators to draw the lines in 2022. Each of the 4 legislative leaders (2 majority party, 2 minority) will appoint 2 members. This group of eight will pick the last two members, requiring approval of at least 5 members. The commission’s redistricting plan must be approved by at least 7 members before it goes to (uh-oh) the Legislature for a vote. (The amendment has to be passed again by the Legislature next year, and then approved by voters in a referendum to take effect.)

It’s that last provision that has led cynics in Albany and across the state to declare this reform to be a sham. Good-government groups were split on the issue, with Common Cause and the New York Public Interest Research Group against it and the League of Women Voters and Citizens Union for it. I’m betting they were all lobbied hard by Cuomo to support the plan, which may have been the best deal he could get given the political capital he was willing to spend on the issue.

The optimistic view says there will be new voices at the table, with less dominance by majority appointees (4 of 10 vs. the current 4 of 6). But a majority of Commission members will be beholden to the “Incumbency Party,” strongly committed to preserving the status quo. And the Legislature has the final say–it can amend the commission’s lines if it rejects the commission plan in two separate votes. That looks a lot like the current process—with lawmakers choosing voters, before voters have a chance to choose lawmakers at the polls.

The Raleigh model, while promising with its documented levels of success, would also be practically and politically difficult to implement locally—not least because of the multitude of school districts in most counties across New York (18 in Monroe County).  Merging two school districts in Raleigh/Wake County, while not easily accomplished, seems like a walk in the park compared with changing the current educational landscape in Monroe County.  As several responses to the original article suggested, we need the type of strong cross-sector leadership around this issue that surfaced in Raleigh.  Is that realistic locally, given our entrenched multi-school-district profile?

I believe the answer can be Yes.  It will take leadership and vision, courage, patience and a renewed political leadership cutting across party, city/suburban and school district lines.  It would take a broad coalition of interests spanning the business, religious, political, race/ethnic, school district, parent and teacher communities—all with a common goal of ensuring the future success of our young people, wherever they live, and thus the economic future viability of our community that will sink or swim, in large part depending on whether this and future generations of our children, urban and suburban, become community assets or liabilities.  It is in all our interests, from both a moral and economic perspective, to make sure that this community recognizes what Raleigh’s leaders understood and acted on:  that the concentration of poverty and unequal educational opportunities along racial and economic lines ultimately undermine the economic viability of our community and region.  Bold leadership and actions are needed to counter these historic directions in our schools.

Relatively easy concrete steps could be taken to start a process and learn more.  Why not send a delegation of interested local leaders to Raleigh to explore in more detail what made change possible there, and what has sustained it over the years—and what has been needed to counter resistance along the way?  And why not bring key Raleigh leaders here to share their experiences and offer their advice and insights as to how we might learn from them, and adapt some of what worked there to our current situation?

And why not begin to bring educational leaders from the City School District and from the immediately adjacent suburban districts together to begin to discuss ways of potentially transforming a number of our community schools near both sides of the city/suburban borders into county/regional magnet schools that are so good that they would attract students from both city and suburban areas across racial and economic lines?  That’s essentially what Raleigh did with almost a third of the county’s schools as a critical element of their transformation of educational opportunities across the county.  Are we any less capable of showing such leadership and creativity than our southern friends?  Let’s start talking to them and finding out what we can learn from them and use to strengthen our own community.

We may also be able to learn from discussions in Wayne and Ontario counties about the issues involved in the possible creation of regional high schools, and from proponents of The Regional Academy proposal in conjunction with Nazareth College.

We don’t have to abolish current school districts or create a countywide school district to make progress—though that might not be such a bad idea!  Monroe County’s school districts currently share many services and resources across district lines.  Let’s build on this spirit of collaboration.  Without undermining the current educational infrastructure, why wouldn’t it be possible to create a mechanism that would bring districts together, along with broader leadership from other sectors of the community, to address issues that cut across district lines, such as creating regional magnet schools, and beginning to undertake the kinds of bold structural reforms that Raleigh, in the heart of the conservative South, has embraced, to the benefit of its region?

Embracing a long-range vision for the good of the entire community may be dismissed by many as idealistic and unachievable.  But tinkering at the margins of our urban schools will not create the educational opportunities our kids and our community need to survive and thrive in the challenging future.  Systemic change across district lines is required.

Raleigh may not be the only answer, but it’s a place to start.  Anyone willing to challenge the status quo and take on this issue?

But it’s a different story in the nation’s public sector, where near-term prospects are not nearly as sanguine.  Especially at the state and local levels, government is belatedly cutting back after being insulated from job cuts through federal stimulus money (financed by debt) and a depletion of fund balance.  Also, economic growth in the private sector remains slow and has yet to replenish public coffers.  Consider the following:

• The Census Bureau and Rockefeller Institute both noted last week a softening in state and local government revenues.  While tax collections have continued to rebound from the recession’s depths, the growth rate for personal income and sales taxes has slowed and corporate income taxes actually fell slightly. Although the revenue estimates are based on incomplete data (we won’t know what truly happened in 2011 until summer), the trend is troubling.
• A Center on Budget and Policy Priorities report issued last week documented the profound financial challenges facing state governments.  For fiscal 2013, it notes, thirty states are facing budgetary shortfalls totaling $49 billion.  “The Great Recession…caused the largest collapse in state revenues on record,” the report points out.  “As of the third quarter of 2011, state revenues remained 7 percent below pre-recession levels, and are not growing fast enough to recover fully soon.”
• And a Rockefeller Institute report last month showed a continuing decline in state and local government jobs in a majority of states.  “Private employment fell more sharply than government employment during and immediately after the recession,” the report notes.  But although the decline in public employment lagged the private sector, “the depth of such decline has surpassed losses associated with any other modern recession.”

As last month’s Rockefeller report makes clear, it’s normal for the public sector to be insulated from the early and most acute impacts of recessions.  In fact, during the recessions of 1973, 1990 and 2001, “public employment continued to increase while private sector jobs were declining.”  As private employment has recovered, public employment has begun a delayed slide.  Over the past year, state and local government employment was down in 33 states; private employment was up in all but two.  Nationally, private employment grew 1.6 percent from Q3 2010 to Q3 2011; government employment was the mirror opposite, falling 1.6 percent.

The public sector’s relative insulation from the Great Recession’s early effects was, of course, aided by federal stimulus dollars.  But while that two-year funding helped alleviate some of the short term pain, it served to kick the can down the road on many of the larger structural issues facing state and local governments.  Reinforcing the challenge is the ripple effect created as state governments had their fiscal integrity compromised and either stopped increasing (or worse yet, decreased) aid to local governments and school districts.  The resulting fiscal situation is at crisis levels in many communities.

There’s a direct connection between the public sector’s ability to raise revenues (via property, income, sales or other taxes) and the health of the larger economy.  The Great Recession was a three-headed monster for government finance, as property taxes were compromised by weakened valuations; income taxes were impacted by the unemployment spike; and sales taxes were done in by fiscal prudence on the part of consumers who curbed spending in the midst of economic uncertainty.

So while the larger economy appears to be gaining steam as consumers slowly emerge from their hibernation, the state and local government sector is firmly on the ropes.  The national employment rebound isn’t likely to proceed fast enough to stabilize government budgets in the near term. States and localities must make fundamentally difficult decisions about their services and costs. The decisions they make have the potential to significantly change the way they do business.

Citation for both graphs: “State & Local Government Jobs Continue to Decline in Most States,” Rockefeller Institute of Government, February 2012

The big city dominates state politics. Here the city is Phoenix. With two-thirds of the state’s population, the Phoenix metro area carries a big stick. Arizonans living elsewhere complain that they have but a small, quiet voice in state political circles and that the interests of Maricopa County (Phoenix, Tempe, Scottsdale, etc.) rule. We’ve got our big city, of course: New York City alone accounts for just over 40 percent of the state’s population. Add in Long Island and Westchester and Rockland counties, and metro New York’s share rises to 61 percent.

Both “big cities” have a dominant political culture, too. By registration, Phoenix metro Republicans outnumber Democrats by about 30 percent. New York is, of course, dominated by Democrats, but by a whopping 6-to-1 ratio, an advantage unimaginable among Maricopa County Republicans.

And just as Upstate New York Republicans fret about Democratic policy and influence in Albany, many in Democrat-dominated Tucson are quick to tell you that those “crazy people in Phoenix” don’t represent them. In Tucson’s Pima County, Democrats outnumber Republicans by about 20 percent. In Santa Cruz County, host to the busy Nogales port of entry to Mexico, Republicans are outnumbered 3-to-1.

Both Arizona and New York are big states with far-flung outposts. The Center for Governmental Research project that brings me here requires a meeting in Yuma. A 240-mile journey from Tucson, the trip resembles a recent expedition I made to Malone in Franklin County, 243 miles from Rochester. In both cases, the distant locale is separated by a physical barrier; in Arizona, it’s the Sonoran Desert. Franklin County is cut off from the rest of the state by the Adirondacks. And both distant regions fret about relevance.

Both states have an international border. Judged solely by the Phoenix-dominated media reports, we might think that all Arizonans view the border with fear and dislike. And that would be a mistake. Just like New York’s border counties to the west and north, Arizona’s southern counties find the border an economic and cultural bonanza. Residents of Nogales, Ariz., speak fondly of days when the border was a line on the map and a small sign in the street. Festival bands flowed freely back and forth. A 2008 study by the University of Arizona found that Mexican shoppers spend about $2.8 billion in Arizona every year and that this number has been growing over time. In 2010, the value of imports and exports flowing through Arizona ports of entry totaled $16 billion and $10 billion, respectively. About three-quarters of this trade flows through Nogales.

On a previous visit I was given a tour of Nogales, Sonora, and saw firsthand the large and vibrant industrial activity just south of the border. Nogales has avoided the drug-related violence of other Mexican border cities, preserving more of the tourist trade. On balance, this binational region creates significant value for Arizona and its residents. Many resent the national focus on “hardening the border,” since it has reduced cultural exchange and made simple trade more difficult.

Both states are influenced by domestic migration. Looking at 2000-08, the period before the Great Recession, New York lost 1.6 million residents (8 percent of its population) to other states, the largest absolute and relative loss in the nation. Arizona, by contrast, was a close second to Nevada in being the largest “receiver” states, and it added more than 700,000 people who moved from other states, about 14 percent of its 2000 population. FYI, Florida was first numerically, adding 1.3 million, about 8 percent of its population. I think we know where lots of those New Yorkers went.

There are social implications of such migration, of course. Only 36 percent of current Arizona residents–versus 64 percent of New Yorkers–were born in the state. I don’t know how this influences politics and the social dynamic, but it must be significant.

And, of course, we both have famous sheriffs. Until his fall from grace, we had the Sheriff of Wall Street, Eliot Spitzer. Arizona has Maricopa County Sheriff Joe Arpaio, the guy who brought chain gangs in striped jumpsuits back to America.

Arpaio starts all woman DUI chain gang - Source: KPHO, Phoenix, AZ.

I’ve seen them out here, incidentally-groups of prisoners picking up roadside litter while managing the chains that connect them to one another. Now Sheriff Joe has announced that he has evidence challenging the validity of Barack Obama’s citizenship. It’s not quite Spitzer’s campaign against the head of the New York Stock Exchange, but big personalities take on big challenges.

We’ve got more in common with Arizona than you might think, and certainly our struggles with representative democracy aren’t unique. Where we stand is ever influenced by where we sit–and whether we find ourselves in the majority or minority.

The cynical point of view is that some of the fundamental critiques of NCLB—that it points a finger instead of lending a hand, and that it sets an impossible target of 100% student proficiency by 2014—were not taken seriously until they began adversely affecting high-performing schools in more affluent districts. But there is a bit more going on behind this waiver story—and it raises difficult questions about the role of the feds in education.

The Cast: NCLB, ESEA, Congress and Arne Duncan’s Waivers

Responsible for inserting “accountability” into our educational lexicon, the best thing that NCLB (the 2001 version of the Elementary and Secondary Education Act, ESEA) did was to highlight and make schools responsible for individual student achievement, not just aggregate performance. It required annual testing of all students in grades 3-8 with public reporting of student performance, calculation of “achievement gaps” between different subgroups of students plus labels for schools. It also mandated tutoring and the option to transfer for students in schools designated as failing; these services were provided free to families.

Passions run high on NCLB, but most agree that the law hasn’t worked well: the problematic practice of letting states set their own bar for “proficient”; the 100% target; the over-reliance on test scores that don’t show student growth from year to year; the confusing and less-than-transparent system of “safe harbor targets” and adequate yearly progress; questions about the usefulness of labeling schools as failing if they don’t show growth with a very small number of students.

Few expected NCLB to be the reigning education law for a decade; most expected modifications, and it was up for reauthorization in 2007. It’s been debated in Congress since, with little action. Enter the waivers—in fall 2011, President Obama and his Education Secretary Arne Duncan declared their intention to allow states to apply for waivers. If states would meet certain conditions that the USDE holds dear (such as common standards, revamping teacher evaluation) they could earn flexibility. Eleven earned waivers in the first round; 26 more applied last month.

The waivers allow states to take back/develop their own accountability systems, and to forget about the 2014 100% target. The mandate to provide tutoring and transfers to students in failing schools is also gone. In NYS, Commissioner John King says the basic point is to replace the snapshot-style focus on school performance with a system that better targets schools for monitoring, supporting and rewarding student growth.

Thus, NYS plans a system that designates:

1. The bottom 5% of schools across the state as “Priority” and require them to adopt whole-school reform models.

2. At least 10% of districts and 10% of charter schools as “Focus.” This designation would be determined by the performance of student subgroups, and would require interventions targeted at these student populations. (The state identifies districts; districts designate schools.)

3. Top performers as “Reward” schools. Serving as models of success, these will be eligible for extra funds and perhaps more flexibility from State Ed.

Appropriate role of the federal government?

The waivers are taking some heat in Congress, which still hasn’t reauthorized ESEA. Why all the tension? Well, yes, because it’s about education, which is highly political. But also because we are all over the map about what role feds should play in education. Neither local/state control nor the more prescriptive top-down approach has the best track record. So, what’s a country to think?

Groups around the nation have been wrestling with this; some ideas worth noting:

• Embracing the “tight-loose” ideal. This means the federal government would tightly define the end goals—the standards, the assessments, performance level—and then get out of the way as states determine how to meet them. Right now, each state sets their own “cut score” for student proficiency on their own statewide test. Human nature being what it is, the wisdom of letting folks set the bar that they’ll be punished for not meeting is suspect. Because 44 states have already voluntarily adopted a common set of college/career ready standards (the Common Core) and there are two consortiums working to develop companion assessments, this has potential, but would require significant overhaul on funding mechanisms and regulations.
• Recognizing that the ability to improve student achievement lies in schools, not in district offices and not in government. This idea would restructure how federal funds are distributed in ways that empower schools. It proposes giving schools their Title 1 dollars and allowing them to contract with some type of “school support organization” that may or may not be their district central office. This proposal holds that empowering school leadership with the ability to choose and invest in the programs and services that best fit the school is the most direct way to school improvement.
• Limiting the fed’s role to four key functions: gathering and disseminating information; enforcing civil rights; funding high-need students; and fostering competition among providers. (These are the recommendations of the Koret Task Force, Hoover Institute at Stanford.)

For now, reauthorization is stuck in Congress, and it’s making for some odd bedfellows. The most recent version includes testing and a streamlined accountability system focusing on the bottom 5% of schools, but does not include a prescriptive menu of school turnaround options, or requirements to overhaul teacher evaluation, both signature features of the administration’s blueprint. This places conservatives who support local control in alignment with teachers unions and many parent advocates, and Democrats at odds with their traditional base. Don’t expect to see this resolved in an election year!

As for the first question…yes, the names really might matter if they allow NYS to work with schools in different ways, and if they can recalibrate the tenor of school improvement discussions. However, the onus is on all of us—feds on down—to make sure that the new nomenclature acts as a more effective tool, rather than sweeping achievement gaps under the rug.

NCLB was important in spotlighting the unacceptably low achievement of our neediest kids, but most recognize it didn’t get the federal role quite right. The trick is figuring out the right role, without losing that focus.