Guest Column: A Look at the Cost of Government

By James Wolf

My guest column posted in Orcas Issues on Sept. 26 pointed  out the Charter Review Commission’s lack of analysis leading to their propositions to amend our county charter.  I addressed the commission’s “Findings,” which state that having six council members resulted in greater expense than originally anticipated.  The commission used a newspaper article and an Auditor’s report comparing two discreet years (2006 and 2011) as a basis for their statement.  I noted that rather than a snapshot look a better analysis would have been to compare five years under the prior three-member system to five years under the current system.  This will show trends, will smooth out one-time fluctuations and will give a distortion-free view of reality.  To that end, I’ve done just that.

To gather the data I went to the state auditor’s website where it’s readily available (you can find it there also, if you wish).  I chose to compare years 2001 to 2005 under the old three-member Board of County Commissioners to 2006 to 2010 under the current six part-time County Council members plus County Administrator. In addition, I focused on the cost center called “General Government,” which includes Commissioner, Council and Administrative expenses and excludes things like Law, Fire and Transportation.  Note: 2006 had only three council members for most of the year, but since it includes some costs, like election expenses, that could be considered “six-member charges” I included it in the six-member numbers even though there weren’t six actually seated until December of 2006.

So what does the data say?  As you might expect, government cost more in 2010 than it did in 2001.  Of course very few things cost the same as they did in 2001, let alone cost less.  So a straight number for number comparison is misleading.  What should be done is to compare the rate of increase (how much did it go up one year to the next) under the old three-commissioner system versus the current system.  Here are the numbers:

Overall, the average year-over-year rate of increase was 4.6%.  This is slightly higher than would be expected.  A simple baseline would be to add the rate of inflation (as measured by the Consumer Price Index) with the rate of population growth.  For the period 2001 to 2010, the annual year-over-year inflation rate was 2.24% and the annual year-over-year rate of population growth was 1.27%.  Therefore a reasonable baseline would be 3.51%, so the annual increase of the cost of government was about one percent higher than that.  But that’s not the whole story.

For the years under the old three-commissioner system the rate of increase was 5.3%, almost two percentage points higher than baseline, while under the current system, the rate fell to 4.0%.  So it looks like this:

Total annual rate of increase    2001 to 2010 – 4.6%
Prior structure                2001 to 2005 – 5.3%
Current structure            2006 to 2010 – 4.0%

What’s this mean?  Does government cost more now than in 2001?  Of course, everyone would have anticipated that.  Are costs wildly out of control?  Not really, but we can do better.  What it actually shows is that according to the data and reasonable analysis, the county’s ability to control the rate of growth has shown to be much better under the current six part-time County Council members plus a professional County Administrator.  For us, that means the most cost-effective choice is to reject the Charter Review Commission’s Propositions 1 and 2.

James Wolf