The 10 Percent Rule Applied to Municipal Reform

Back in January, I introduced a rule of thumb that I had developed for strategic management decisionmaking I dubbed the “10 percent rule“. The idea is that any change that results in 10 percent reduction in something, like a budget, requires a strategic reassessment of organizational priorities and programs.

The topic came up during a tour newspaper editorial boards in Indiana organized by the Indiana Policy Review and inspired by the Reason Saves Cleveland video project. Indiana cities, like most cities, are facing severe tax revenue short falls. Remarkably, few are addressing this problem head on. One city councilman even said we shouldn’t let a short term dip in revenues fundamentally change city government priorities even as the city was turning off street lights every other night to save money and the director of the 10-person city parks department left for another job because he was paid just $35,000 per year!

These municipal reform discussions inspired IPR’s executive director, Craig Ladwig, to pen an oped. The commentary appeared in the Fort Wayne News Sentinel and was syndicated statewide. Craig starts off:

A tour of the state with municipal policy experts left me convinced that few if any Indiana cities will institute the necessary budget corrections in time to avoid crises next year.

Talks with civic leaders, elected officials and editors in seven Indiana cities suggest we are more likely to follow the recent example of Harrisburg, Pa. That is, we will still be arguing about minor budget cuts when the gates of Chapter 9 bankruptcy begin to close.

Indeed, Dr. Sam Staley, an adjunct scholar of the Indiana Policy Review Foundation, believes many cities are running up against what he calls the “10 Percent Rule.” The concept, although more psychological than fiscal, is worth understanding in the context of Indiana municipal politics.

But the real kicker comes when Craig outlines a series of “starting points” for determining the proper role of local government based on an initiative in Oregon sponsored by Kim Thatcher:

Her list of core functions serves as a talking point for an Indiana discussion:

♦Protecting people and communities through law enforcement, courts and corrections.

♦Providing for an educated citizenry, ensuring all children receive an equal opportunity to achieve academic success.

♦Encouraging job creation and entrepreneurship by removing regulatory barriers to job production.

♦Helping those who can’t help themselves using a safety net of social services.

♦Building and maintaining the infrastructure to accommodate transportation and utilities.

♦Managing public property and natural resources, including protections for air, water and soil, while protecting the rights of private property owners.

♦Requiring government agencies to conduct the public’s business in an efficient, transparent and accountable manner.

Does everyone agree with those points and in that priority? Surely not; our group certainly doesn’t. But office-holders will have to justify alternative positions through cost-benefit analysis rather than factional politics. That, in itself, might introduce the accountability needed to spur city halls to quit doing what doesn’t work and start doing what might work.

Indiana Policy Review has been working on municipal reform issues for more than 20 years.