Your state (and likely your city) is broke - and why it matters to you

A couple of weeks ago, 60 Minutes ran a great segment on the state of the state when it comes to budgets.

And it's not pretty.

According to most economists, most states have major financial shortfalls. California is currently facing roughly a $19 billion budget deficit next year and has a credit rating approaching junk status.

Arizona actually sold off its state capitol, supreme court building and legislative chambers to private investors and now leases back the space for their government.

New Jersey faces a $10 billion deficit. Illinois currently has about $5 billion in outstanding bills it cannot pay and is already 6 months behind on payments -- affecting tens of thousands of people who are waiting to be paid by the state.

And the financial struggles aren't limited to those states. The budget deficits become even more troubling because many of the states are in danger of having to dramatically cut workers and to possibly fall short on pensions (which are generally owed to a whole host of former government workers--including teachers) and money that is committed to needy charitable organizations.  New Jersey has about $46 billion in unfunded pension liabilities and $66 billion in unfunded healthcare liability.

The state budget woes will also have a huge impact on cities -- who often rely on up to 1/3 of their revenues from the state (which will get squeezed) and many of the cities are already in the same budget crunches and are struggling to meet their obligations on municple bonds.

It's an interesting story, on a lot of fronts -- but what does that mean for the animal welfare community?

It means that cities and states are looking to save money -- in any and every place they can.  And that means that animal welfare programs will be cut -- because they, in general, won't (and probably shouldn't) be prioritized over things like education and social services. Which means state and local funding for things like animal shelters, animal control, USDA inspectors, funding for low cost spay/neuter programs, etc will likely all be on the chopping block. Already, the state of Pennsylvania has all but cut out funding for enforcing the state's 'puppy mill' laws.  Most states are already under-funded in these areas -- and it may get worse before it gets better.

And it's really important for people to understand this when they look at animal welfare, because it will force us to be smarter about what we ask for --and it may force cities to look at eliminating laws that are costly to enforce. So while it sounds bad, there are a lot of opportunities here. And here are some of my initial thoughts on what it could mean:

1) Openings for repeals of breed-specific laws - In September, the city of Topeka repealed their breed-specific laws as city officials determined that in doing so would save the city $30,000-$50,000 a year in enforcement, legal and kenneling costs -- and wouldn't have a negative impact on public safety. Best Friends has a lot of resources to help calculate the costs of breed-specific laws that can be helpful.

2) Protect against mandatory spay/neuter laws - MSN laws have proven to be ineffective in virtually all cases in which it has been implemented. The reason is that it drives up impounds because people who don't comply with the law often end up with their dogs confiscated, which drive up enforcement, shelter and euthanasia costs. When statewide MSN was proposed in California last year, the state department of finance concluded it would be very costly to enforce. Meanwhile, data from the state of New Hampshire indicates that for every $1 spent on targeted, voluntary, low-cost spay/neuter programs, it can save $3 in animal control costs.

3) No Kill success is not determined by financial investment -- having good, strong leadership is more important to no kill success than good funding.  So budget cuts do not mean shelter animals must die. In fact, we're starting to see a lot of cities turn over their shelter contracts to private entitites because these entities can often operate shelters at a cheaper cost to cities than the cities can operate them themselves. Additionally, private entities often are more focused on life-saving than publically run shelters that are often more focused on the 'animal control' functions of their jobs.

4) Commercial Breeding laws that work and are sustainable - -I've written a lot about Missouri's Prop B 'puppy mill' law in the past few months and how I think it's destined to fail, in large part because enforcement resources are already too limited and because it never addressed this core problem. Money for more enforcement is not going to just pop up out of nowhere. While the state government is currently looking at repealing Prop B, it also gives everyone (on both sides of the issue) to create a law that follows some of the Better Business Bureau recommendations that also helps provide funding for enforcement -- that can remain even if the rest of the budget for enforcement is cut.

I'm not saying it's all doom and gloom -- but I think a larger understanding of the situation can help animal welfare advocates push for responsible laws that have a chance of being implemented because they are fiscally responsible and at the same time be smart in what they ask for -- if we do that, it will be good for the animals in spite of the tough economic times.

h/t on the 60 Minutes article to Sam the Dog Trainer via Facebook

Comments

[Randy]

You wrote "In fact, we're starting to see a lot of cities turn over their shelter contracts to private entitites because these entities can often operate shelters at a cheaper cost to cities than the cities can operate them themselves. Additionally, private entities often are more focused on life-saving than publically run shelters that are often more focused on the 'animal control' functions of their jobs."

That's exactly the approach we have taken here in our county and it has proven to be well recieved by the local commissioners.

The concept that poorly performing animal control units with an over wighted enforcement approach only cost taxpayers is well recieved by citizens as well seeking to keep the tax burden down.

Great article.

[MichelleD]

This might be the most important blog you've ever written. And will likely be one of the least read (I hope I'm wrong!). I'm embarrassed by the lack of research those in the field of animal welfare do - from the basics of new adoption techniques to politics to how economics affects everything from s/n compliance to puppy mills.

[Rachel H.]

Great article Brent!

[Sue]

Brent or Randy - can you give some examples of public shelters who've recently turned over their functions to private entities? Brent - great blog post!

[EmilyS]

well, we all want well run efficient public agencies. But be careful about turning over public functions to private entitites. If you think you have trouble getting statistics/information from public shelters, just wait till you try to get them from the private ones.

most of this is about cutting services/benefits to those who can least afford it (and of course trying to destroy the public unions and pension systems)... wake me up when any new taxes on the very wealthy are proposed.

[Brent]

Susan,

Kansas City, MO made the change to privatize about 20 months ago -- and in year one, adoptions more than doubled and in year two, they look like they are going to have another increase in adoptions of about 20-25%. I think there are still a lot of struggles under the current regime, but it is undoubtedly better than it was when the city was in charge....

Euthanasia is now down quite a bit because of it (I'll post some new numbers soon) and the city is saving $175,000 over the cost of running the shelter. It's been a definite win/win....even though, as I said, there are still definite struggles with shelter management, at least there is effort being made which there wasn't before.

http://btoellner.typepad.com/my_weblog/2009/07/steps-forward-for-animals-in-kansas-city.html

[MichelleD]

To Emily's point, make sure the private entity is required to make all their numbers public in the contract.

[Brent]

Yes, absolutely a great point. Omaha, NE is a city that has also privatized their shelter (as well as animal control) and yet does not make ANY of their numbers public information -- so there is no accountability. I'm pretty sure they would lose a lawsuit if someon waged it on them, but for now, that's how it is. Accountability through open records absolutely MUST be part of the contract.

Emily, the whole thing is really that everyone seems to want government services (welfare, medicaid, better education, health care), but everyone seems to want someone else to pay for all of them...

[Ted Moore]

A significant percentage of the electorate seems to be coming to its senses after 50 years of government bread and circuses. Excellent job, Brent, of identifying the opportunities such a return to adulthood offers those of us who have reaized all along, "Government can't solve the problem. Government is the problem".

And wake me up when public policy recognizes that at no time or place in human history has taxing a society's most productive people and activities been a) sustainable beyond a few decades or b) the root cause of a permanent reduction in poverty or any other social ill.

It ain't the revenue. It's the philosophy.

[Dancingdogblog]

Given the Animal Care & Control mess in Chicago, if privatizing is going to happen to get needed cash, records must be open to the public and online. Playing with numbers seems to be a new national sport and, like home valuations, kill numbers vs. transfers vs. adoptions, cannot be spun to suit agendas.

Sounds like things are moving in the right direction for KC's shelter - congrats!

[EmilyS]

@Ted: wake me up when all those jobs that are supposed to be created by giving tax breaks to rich people and corporations (which we've done for the last 10 years) actually appear, 'kay?. Or maybe you actually think the brokers, bankers and mortgage scammers are productive useful members of society who deserve all the accolades you can bestow on them, rather than parasitic scum who colluded to destroy our economy (people shouldn't want to own their own homes, anyway). Or maybe you really applaud the work of corporations who have off-shored their functions to the extent that you can't even find a real human being who speaks a language you understand, should you be so foolish as to actually want to do business with them and buy their crappy products that fall apart almost instantly.. because cutting costs by using the cheapest possible Chinese labor and the absolute minimum manufacturing standards is a good thing. Wall Street loves their stock! and that's all that matters. Because they were able to cut their "expensive" American employees, so it's all good for those "most productive" people, their golden parachutes and multi-million dollar buyouts after destroying a corporation. Is that what you mean by "philosophy"?

I'm kind of betting you mean that it's all the fault of the unions and the illegal immigrants. But hey, we shouldn't worry: maybe we'll all be able to find a sub-minimum wage job cleaning the kennels in those private shelters, or the bathrooms in firestations, libraries, schools etc that will proliferate as government retreats from performing public functions. (sub-minimum only, because we all know how mandated minimum wages destroy jobs, right?)

Hey here's an idea: let's offshore our shelters to China! I understand they love dogs there.

[kmk]

EmilyS - dogs taste like chicken, LOL. Boy, you sure read a lot more into what Ted wrote than I did!

Great blog, Brent, and I'm pleased so many people bothered to read what you've written.
did Omaha actually privatize their shelter or did they always use a private shelter for animal control services?

I've heard a lot of different projected deficit numbers for Texas, with the highest being close to 20 billion dollars. That's pretty amazing in a state with 25 million people (the ones they know about, anyway) that's an energy producing state. Their major cities also have strong economies so I'm not sure what's going on there.

California has a major problem because so many of their statutes were enacted using the ballot initiative process and the legislature is unable to modify or repeal the initiatives - and who knew all that regulation cost money? Who saw that coming? Add to that the burden of illegal aliens, ridiculous pension plans, environmental activists shutting down industry and agriculture, and financially unsustainable workmen's comp requirements of employers. California has a full time legislature, proving that idle hands truly are the Devil's workshop. If they cut that down to six months they'd save a ton of money. Incredibly they've spent the last several years worrying about forcing everyone to speuter their pets.

Speaking of pension plans, that brings us to New Jersey. My neighbor's son works for the State Treasurer. Taxes in New Jersey are unbelievably high, mainly because they've continued to raise taxes on the private sector to pay for outrageous pensions and benefits for public employees, who haven't been subjected to any belt tightening -until now. Who was it that said "The problem with using Other People's Money is you eventually run out of Other People's Money"? I think it was Margaret Thatcher. Anyway, if you ever get bored and have spare time go to YouTube and watch videos of Governor Christie go head to head with people like the President of the teacher's union. He is a breath of fresh air and an up and coming political rock star.

An article I read recently said Illinois is in more financial trouble than any other state.

[kmk]

One more comment on states being broke - I keep hearing inconsistent numbers on the degree of "brokeness", but this morning on a news show one of the commentators clarified some the discrepancies. There's "projected deficit", which is the difference between the amount of money needed for the budget to pay bills vs. the amount of money the state will take in.

There are larger numbers that get tossed around and you will sometimes hear the term "deficit", or "in the hole", or you'll just hear it described as "in debt". that is the number that means, "If the state had to cough up the money to pay off their loans, municipal bonds, etc., this is the amount of money it would take to pay all the bills". I assume that amount includes the money needed for day to day operations. So, although California is facing a 19 billion dollar budget deficit, I've heard they have 65 billion dollars of actual "debt".

Cities and states have negotiated unbelievably unrealistic public pension and benefit plans and now it's time to pay the piper. The business commentator I was watching this morning said if the public sector unions won't re-negotiate their contracts the states need to declare bankruptcy and become insolvent, meaning the retirees will get - zero. Or, they can come to the table and re-negotiate the deals and get something.

[Randy]

Sue,

Fulton County Ga has been privatized for years. Initially, the shelter wsas being run by Atlanta Humane Society who basically used the shelter to cherry pick adoptable dogs while having one of the highest kill rates in the Atlanta area.

After a considerable effort from local advocates the contract was awarded to Southern Hope Humane Society SHHS which successfully implememnted many of the programs lowering the kill numbers accordingly.

The contract then went to "Barking Hounds" which is another non profit in Fulton County. They continue to implement and axpand services and while they are far from no kill there is a partnership with the rescue community that appears to function quite well.

Our problems in Gwinnett are witb the political process that protects the county's role in enforcement and control with which we disagree on.

While our original intent has always been to change the current format of WHO runs AC we are cognizant of gains we reached by removing portions intake from our shelters "SOP"

Realizing that change alone took two years but has resulted in reducing feral cat intake b y 1,500 in 2010 and we have projected those numbers to drop another 1,000 or so in 2011.

The entire program will fail IF we are unable to support handling those numbers outside ogf the shelter through various feral cat rescue organizations.

Unfortuantely, I wish there was a magic wand that would make this process easy bjut unfortunately there is RESISTANCE from various special interest concerns tnhat prevent or attempt to stifle these changes from happening.

Sadly, some of these "special interest" concerns are from animal welfare groujps who rely on the "cash flow" the present system of "catch and kill" offers.

To give an example, we have a new
"shelter partner" offering low cost spay/neuter services which is good. But if you look at the numbers there is a financial incentive for this group bringing in more spay/neuter services to subsidize their operation.

Thus, they are non supportive of any "change agenda" that seeks to "kill less".

What has always been disappointing in our efforts is the lack of support and commitment from the long established rescue community. They don't attend critical meetings, don't throw their voices into the discussion and in fact do a poor job of rescuing from our shelter "because of the politics and fear of being threatened with ordinance violations.

Our success has come from leadership within our ranks and a decision to take our message to the citizens who own pets.

That collaboration has been successful in getting the attention of the politicians who are competing for votes.

I do agree with the comment that far too many, and I'm going to use this word loosely "advocates" don't do their research on not only the problems involved but more importantly offer solutions that are "revenue neutral"

I probably will address many of these issues on an upcoming blog posting for those who care to read it.