Tuesday, June 07, 2011

What Does Government Cost?

I've been cogitating on a subject that should be obvious to us all, but is almost totally hidden. That is, "the cost of government services". To clarify, I'll just state the obvious: we know the price (cost) of just about every product or service we receive from private sources, but we know almost nothing about the price (cost to us) of just about every public service. Without knowing the prices of government/public services, we have no way to evaluate whether or not we are getting our money's worth. And, in my opinion, this is exactly how our legislators want it to be. We should be demanding that this change, and that every major service in government budgets be presented to the public in terms of its fully loaded cost.

Here's a simple, hopefully non-controversial, example - the fire department. What is the annual average salary and benefits cost per fireman, the average annual facilities and equipment cost per fireman, and the average annual administrative cost per fireman? What is the average total fire department cost per "working fire" in one year? How many "working fires" did the average fireman respond to in the past year? What was the total property damage (insurance) cost of the fires in the district last year? These statistics would be easy to generate, and would take virtually no newspaper or internet space to present - but we never see them. Why? Because those in charge of the fire department have no interest in the public being able to evaluate their cost vs benefit, or to compare their numbers against those of other departments.

I'm sick of hearing pseudo-debates on public policy that are totally subjective, devoid of statistics that would help one make sense of the policy options. "Special Education" is important, yes, but how much is spent, on average, for each special education student versus each "normal (sorry)" student? What is the average hospital bill for each uninsured person who is brought to the emergency room, and what does the chart of costs for all uninsured patients look like? What is the direct cost and the fully-loaded cost for each state legislator, including staff costs? What is the average annual cost of keeping a person in the county jail, and what are the major elements of this cost? We are kept in the dark about these facts, and a host of other pertinent facts about public institutions, because the special interests do not want us to know the answers, and they don't want us to know the answers because they don't want to hear the follow-up questions that would ensue. "Transparency" is virtually non-existent.

Now for a little "compare and contrast" exercise. The same government that tells us almost nothing of use about its own operations requires giant reports like 10-K's, 990's, and tax returns from individuals, companies, and non-profits. These are the standard reports, but there are many others required from specific industries and occupations. In other words, government wears us out with information requirements while providing us with hardly anything about its own operations. Does this seem right to you?

I believe that every government agency, at every level, should have an independent citizens panel that sets public reporting requirements for it. Citizens interested in being on such a panel would submit their names and then, at random, be assigned to the various panels for that governmental unit. Citizens could not choose the specific panel they wanted to be assigned to, since that would simply result in the panels being packed with members sympathetic to one special interest or another.

In my career I've been part of "management" for many organizations, both large and small. The better ones always devise, produce, and evaluate statistics to aid in developing strategies and assessing performance. Board members and others not directly responsible for operations see this information and ask questions. Why do we not see similar processes regarding our government, which right now is far from "of the people, by the people, and for the people"?


Dave said...

I pretty much agree with you but, you are wrong about one thing and it may be why "government" costs so much:

"...we know the price (cost) of just about every product or service we receive from private sources."

Many businesses operate with government subsidies, ethanol is a particularly good example of a product that wouldn't exist without government support and it increases the cost of food, a cost which is increased by agricultural subsidies.

Then there is collateral damage from industry that government picks up. I listened to most of a "Bob Edwards Weekend" on Sunday that featured the producers of a documentary on the West Virginia coal industry which is worth a listen. The take away from it is that if half what the film says is true, coal use costs more than wind and solar energy if you add the health,environmental and eventual food and water costs which the coal companies pass off to government now foots the bill for.

So, government pays for the left over cost, in part, of what we let businesses do.

Anonymous said...

You're right- raw data is hard to come by.

That creates an opening for unscrupulous people like Rupert Murdoch to create their own statistics and metrics.

thimscool said...

What Dave said...

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