'We're different' and other weak excuses for city's padded payroll

May 19, 1998|By Douglas P. Munro

VAST QUANTITIES of hot air were generated down at City Hall following the recent release of the Calvert Institute's "Padded Payroll" study, which examined municipal employment levels in Baltimore and six similar cities -- Cleveland, Indianapolis, Milwaukee, Philadelphia, Richmond and St. Louis. The report found Baltimore severely overstaffed relative to the other cities, to the tune of about 50 percent in most areas.

The city's defense boiled down to this: apples and oranges. The Calvert Institute's comparisons were unfair because "Baltimore is different."

The skeptic is left to wonder why the city does not devote as much time to repairing potholes as it does to concocting rationales as to why it should not be compared with anywhere else. It is instructive to parse some of the more common city excuses.

Excuse No. 1: The city says the report did not take into account Baltimore's "special needs" that result from its not being part of any surrounding county.

This is absurd, for it assumes that the other cities are awash in funds provided by the counties of which they are a part. This is not the case.

Moreover, in Maryland, the state government to a large extent steps into the role filled by county governments elsewhere. Cleveland's real property value assessment for tax purposes is carried out by Cuyahoga County on behalf of the city. Here, property evaluation is made by a state agency. In recent years, Annapolis has assumed costly Baltimore municipal functions, such as the city jail and the city's community colleges. Last year, it partially assumed responsibility for the city's school-board functions.

The crucial question is not how much money the counties kick in. Rather, it is this: How dependent is the city upon its own revenue as opposed to intergovernmental transfers from other sources?

With 43.8 percent of its annual operating budget derived from nonlocal sources, Baltimore is very externally dependent. By contrast, 6.1 percent of Cleveland's operating budget is derived from intergovernmental transfers. Cleveland raises most of its revenue through a local income tax levied on all people working in the city, regardless of where they live.

Indianapolis, annexed by Marion County in 1970, now occupies just about all of the 402-square-mile county. But the Consolidated City of Indianapolis receives about a mere 13.9 percent of its funds from intergovernmental transfers.

Only Milwaukee matches Baltimore's dependence on transfer funds. Its general fund is 55.1 percent dependent upon noncity funding; its entire budget, 36.3 percent. For its part, St. Louis claims to be 11.5 percent reliant on transfers. (All figures are for fiscal 1996 or fiscal 1997.)

Baltimore is not shortchanged when it comes to intergovernmental handouts.

Excuse No. 2: Baltimore's public works department handles more than the other cities' departments, so it should be excluded from the comparison.

Specifically, the complaint was that Baltimore's public works department has a water treatment and distribution role that is handled in other cities by a separate department.

Even factoring out the public works department's water function and its 2,140 employees, there are still 3,715 workers in nonwater functions. That is about 52 people per 10,000 residents, 140 percent higher than the other cities' average of 21.7 per 10,000.

Reversing the calculation by counting each city's water agency as though it were part of its public works function does not help. Under this scenario, Baltimore employs 80 workers per 10,000 residents, a figure 115 percent higher than the other cities' average of 37.2 per 10,000 residents.

Is this acceptable?

Excuse No. 3: Many cities contract out municipal services to private companies, so the report should have looked at the amount spent on functions, not the public employment within functions.

Baltimore still doesn't make the grade. Controlling for regional variations in purchasing power, Baltimore's expenditures are way above the average of the other five cities in all areas but health.

In housing and community development, Baltimore in 1994 spent $1.096 million per 10,000 residents, next to an average for the other cities of $1.015 million.

In health, Baltimore proved surprisingly lean, spending $0.963 million per 10,000 next to the other cities' $1.355 million.

Police exceeded the other cities' average by 25.7 percent, at $2.430 million per 10,000 vs. $1.934 million. Likewise with the fire, Baltimore spent $1.280 million per 10,000 compared with the other cities' $0.911 million.

With highways, a component of public works, the other cities' expenditure of $0.823 million per 10,000 paled next to Baltimore's $1.259 million per $10,000 residents -- a figure 53 percent higher than the other cities' average.

Excuse No. 4: None of this matters because Baltimoreans are getting better services.

This is a convenient defense because there is no way of measuring whether Baltimoreans do get better services. However, unlike some of the other cities examined, Baltimore does not include residents' satisfaction ratings or agencies' performance measures within its annual budget. Such items are included in the Milwaukee and Richmond budgets.

When Baltimore gets around to including these features, and when residents indicate sky-high levels of satisfaction, only then may Baltimore defend its padded payroll.

Douglas P. Munro is the president of the Calvert Institute for Policy Research Inc.

Pub Date: 5/19/98

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