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May 18, 2009
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The ‘SAD’ Nation to Come

Nothing lasts forever. Nothing ever does. This is a fundamental truth, not only in Julie Andrews’ song in “The Sound of Music,” but also in science, religion and philosophy.

Certainly it is true in economics, as everyone with retirement plans built around 401 or 457 plans can attest. It is true as we watch our children grow, and as we age during the course of our careers and our lifetimes. The shape and form of how our country’s political institutions work are also subject to changes.

This is an article about how our political institutions appear to be moving.  It is also an article about how we might stop and think about supporting and encouraging the change or finding an alternate direction. To begin with, maneuvering anywhere in an environment of change requires two very basic points. The first is to know where you are. The second is to know what the direction of change seems to be, or at least your best guess at it.

In the case of American government the HR Doctor, in a prior article entitled “The Second American Revolution,” focused on the fact that state governments appeared to be roaming around aimlessly trying to decide what they are going to be when they grow up.

The position of state government in the federal system has declined from being the prime focus at the time of the founding of the Republic to being organizations that can’t quite cope. States are too big to handle little problems successfully, like the protection of an individual abused child. They are also certainly too small to deal with many of the most important issues we will face as a society. These include global warming, the power of technology, multinational corporations, health care and personal accountability deficits, Social Security reform and much more.

States are retreating into increasingly loud arenas for partisan bickering, whining and budgets that never quite get balanced other than with a short-term view lasting barely until the next election. 

There is an increasing worry from this author’s vantage point that the fundamental principle which has allowed our institutions to function so brilliantly for more than two centuries is at risk. That fundamental cornerstone is compromise and the ability to act for a larger and more common good instead of narrower “litmus test” interests.

Recall that more than two centuries ago the concept of giant urban metropolitan areas did not exist in America. The state seemed to be a natural center for governance since we were at war literally and figuratively with the concept of centralized power excesses, especially by people who wore red coats. Combine that with the rural, agricultural-based economy and about all that was left was the concept of the individual colonies or states.

That has now changed dramatically. The HR Doctor, for example, lives in a county which alone has a population larger than that of 12 states. The world is different today.

Where will this change in dynamics and demographics take us? This type of question was raised ironically by the now retired HR director St. Thomas Aquinas, who posed the philosophical debating point “How many angels can fit on the head of a pin?” The same can be asked when we look at government organization.

America today has about 89,500 government organizations. This rather staggering number, however, is down from more than 115,116 when World War II began. The entire federal government counts as one with each of the 50 states also counting as one. Given that only 51 of the 89,500 extend beyond the level of local or regional government, where are the rest of these governments?

Certainly counties have not caused the government population to be as large as it is. There was roughly the same number of counties a generation ago as there is today. In 1942 there were about 3,050.   Recent Census data tells us there are 3,033, not counting consolidated city-county governments. Today there are about 19,492 municipalities, up from the 16, 220 in 1942. 

You can begin to see a clear trend if you imagine the very thrilling thought of inviting the entire staff of the U.S. Census Bureau over to your home for tea to review some of the predictive gems contained in the data they produce. The Census Bureau’s role is an absolutely essential one in taking “GPS” readings of where our country is and has been. After all, the Founding Fathers were no dummies. They decided that the role of the census was so important that it should be in the very First Article of the new Constitution very close to the large letters that say “We the People ….”

According to census data the number of school districts has declined tremendously from more than 108,000 in 1942 to about 14,500 as of 2007. While the number of counties and municipalities has remained fairly constant, the “big news” may be found in the growth of “Special Assessment Districts” (SAD). From 8,300 at World War II’s beginning to the current roughly 37,400, the SAD news is that this is a growth industry.

There are fire districts, water districts, lighting districts, recreation and park districts, hospital districts and much more. These special districts are financed by assessments, usually found in small print on property tax bills. The assessments allow the functions to be managed while escaping  the clutches and, increasingly, the handcuffs of General Fund dollar competition in other government entities like cities and counties.

The beginning of this article noted that everything changes. There may perhaps be one exception and that is a universal disdain for paying taxes.

The trend suggests that we will continue to see a decline in the ability of state governments to figure out what their place in the world is. It will also be awhile before citizens realize they don’t need fire stations from multiple jurisdictions covering “their” territories only a few minutes away from one another. There will, however, be an increasing search by the vested-interest leaders in specific government operations to escape from the General Fund. 

The attractive escape route will increasingly be found in the creation of Special Assessment Districts. As this article was being written, the Florida Legislature was considering a bill that would remove fire services from General Fund reliance and make them SAD cases. That would be the good news and generate parties throughout the state hosted by the fire unions.  The bad news would be that it would be a “tax swap” in which local government property taxes would be reduced.

The result will be economic security for the “true heroes” and a setback for the idea of reform of the fire service. It would mean more difficulty for local governments to manage their own affairs, and make decisions about the services and level of services at the local level. 

Another bit of SAD news is that this type of government will be more distant from the general population than is a city or county. The more removed, the less oversight. America is evolving more and more toward government through special assessment districts as a quick, snappy, and in the long run, probably the wrong answer to the frustrations which are growing about the current system.

At some point, this “quiet revolution” will grow louder and louder to the point where our country will even consider changing its name. It will no longer be the United States of America. It will become the “United Special Districts of America” — the USDA.

This change may excite American farmers, although their numbers are declining steadily. It is questionable whether it will excite government leaders to change direction and to begin to create rational service boundaries, consortia and coalitions that focus on the best government at the least cost for the greatest number of people.

Perhaps instead of creating a new SAD species, what we really need is thoughtful leaders with an over-the-horizon vision of the future to bravely create long-term stable funding, to innovate and end the dysfunctional squabbling over silos in favor of governments that are more local, more accountable and more service-delivery transparent.

Phil Rosenberg
The HR Doctor •


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