Rational Behavior Of Aldermen

A fundamental assumption of economics is that all human beings act rationally. I wholeheartedly believe this to be true. Each person acts in a way that maximizes his utility (happiness) based on the information he has at the time.

(Similarly, a person never does anything that he doesn't want to do. For example, on Monday you may say to yourself "I don't want to go to work today", but you will still go. The reason: going to work is not an isolated event. Sure, you don't want to go to work, but you also don't want to face the consequences of not going. And since you don't want to get fired more than you don't want to go to work, there you will be. More generally, a person's actions at any given moment in time represent the best possible use of that person's time. That person could not possibly be doing anything better than what he is doing, because if he could, he would.)

Annapolis Aldermen, having made one of the final cuts for classification as human beings, behave rationally as described above. Yesterday's Capital editorialized about the decisions that our aldermen make regarding their employment.

Enough with the preamble. Let's do this.

Our Say:Aldermanic turnover is disrupting city government

By THE CAPITAL EDITORIAL BOARD
Published October 26, 2007

Once again, the Annapolis City Council has an unexpected vacancy. Ward 2 Alderman Mike Christman has ended speculation by announcing his formal resignation because of job constraints involving himself and his wife.

The mayor will soon be scheduling special primary and general elections.

By Wednesday, she must do this. Take a look at the early favorites for the dates she will announce.

We credit Mr. Christman, a promising alderman, with recognizing that a resignation was better than giving his constituents and the city short shrift - he has been unable to return phone calls and has missed the last three council meetings. In the circumstances, he made the responsible decision.

I wonder what comprises The Capital's criteria for a 'promising' alderman. Here is my guess:

Criterion #1: won an election for the first time.
Criterion #2: see above.

But his departure adds to the turnover that already has disrupted city government.

Ward 4 Alderman Wayne Taylor left the City Council after serving only a year to take a well paid job with the new county executive - a position he kept for only a few months. Alderman Josh Cohen and Alderwoman Classie Hoyle were willing to give up their city positions to run for County Council - Mr. Cohen won and left his aldermanic seat.

Here is the problem. Aldermen get paid $12,600 per year. Most, if not all of them, want to move up the political ladder so they can be richer or more powerful, or if you prefer, so they can do more good. I think most people are fine with this. BUT, the city has elections in odd years (2005, 2009, etc.), so for these people to move up, they have to leave their aldermanic seat mid-term.

Solution #1: change the election cycle to be the same as the county, or at least in even years so we share election times with somebody.

Solution #2: pay the aldermen more money so they wouldn't be so concerned with moving on to something else.

Today, two aldermen - Ross Arnett and Sheila Finlayson - are on the council as a result of elections with very low voter turnouts.

Yeah, like 25% low. That's really low.

No wonder turnout for special elections is minimal - city voters are tired of trekking to the polls to replace fickle aldermen.

This is too important of a question to answer with such a declarative quip. Voter turnout is generally low in this country, even in Presidential years. Why this is the case is a fairly major political science issue.

I don't doubt that frustration with fickle aldermen plays a part, but there is certainly more to it. I think a lot of people don't realize how much they are affected by city codes. There are also people who are willing to break laws if they don't like them, so for those people it wouldn't make much sense to waste their time with elections.

At the risk of sounding arrogant, I am willing to say that people who don't vote are a--holes. People certainly have the right to do what they want, but by not voting and to a lesser extent not educating themselves on the issues, non-voters allow things like Martin O'Malley to happen.

And each of these special elections costs taxpayers $50,000.

It would cost us a lot less if we did the elections in the same year that the county did them, because we rent the voting machines from the county. For the upcoming special election, I believe the council is fast-tracking a bill to use paper ballots, which would be cheaper.

On a related note, how excited are you that $50,000 of your tax money is going to be used for a special election where less than 1000 people are going to vote?

Beyond the financial burden, there is a loss of knowledge and experience. A new alderman, no matter how gifted, is on a learning curve. It takes him or her a while to be able to deal intelligently with critical issues. When the positions keep turning over, the city staff has to spend much more time familiarizing aldermen with the ins and outs of government. And constituents need a scorecard to find the person who can help them with a complaint.

True enough. Turnover cost is very high, no matter what business you are in.

The city cannot prevent aldermen from leaving office before their terms expire. It's up to the candidates themselves to end this disruptive trend.

Wrong. The city can prevent this from happening. The city can give aldermen more money, more power, an assigned legislative assitant, and for goodness' sake, maybe some letterhead so the aldermen can keep in contact with their constituents without having to spend out of pocket cash.

Special elections have been relatively scarce in the city's history because most candidates honored their commitment. Today candidates seem to be ready to serve - until a better opportunity comes along.

Can we blame them? (Answer: No). $12,600, even with the prestige of public office and the obligation so serve the public, is not enough of an incentive to pursuade people to disrupt their family lives or turn down professional opportunities.

There appears to be no shortage of candidates to fill these vacancies - several are already lining up to run for the Ward 2 opening. But who among them is prepared to promise voters he or she will fill out the term? Are the candidates ready to make sacrifices - including turning down better jobs and spending less time with their families?

This is just not true. Unless The Capital knows something that this blog does not know--which is possible but not likely--there are only 2 candidates "lining up" for the Ward 2 opening. The Democrat is Debbie Rosen McKerrow, who lost to Christman; Karen Jennings is running as a Green Party member; and we Republicans haven't even found a candidate.

I would guess that some candidates run because someone asks them to run, and because there is nobody else to do it! This would lead candidates to feel like they are doing their neighbors (or their political party) a favor, and would be a weak motivator to put up with the shenanigans of aldermanic duty, especially when better options arise.

At the end of the day, the candidates are still to blame--but they are not as guilty as The Capital would have us think.

Ward 2 residents need to ask these questions of would-be aldermen. And the same commitment should be sought in all future city elections.

Why would candidates for alderman give any more commitment than the city gives them? Again: $12,600 for a lot of work, no letterhead, no office, no assistant, no parking space (I think), and no way to serve out your term if you want to run for another office. Hey, sign me up!

It's sad that voters have to ask something so obvious, but it is important to the wards and to the city as a whole that elected officials take their commitment seriously.

City Priorities

Heavens to Murgatroyd, people! Today's Capital was a gold mine of blogging material. This is the last post I will be writing tonight, but since it will be the first post you see on the page, it is the appropriate time to tell you that you have a lot to look forward to!

This kind citizen writes to The Capital concerning the priorities of our elected officials. In this blog's humble opinion, they have largely been wasting their time, perhaps up until now. I usually don't edit or abridge letters, but this one rambles a bit, and I am tired. So I have shortened it for content.

It's time for our city leaders to take a long, hard look at their priorities....

YES.

.....which should be to:

Ooh! Yay...let's hear 'em.

*Protect our citizens.

Yadda Yadda Dave Cordle Babble Babble $35,000 is not enough to get paid to risk your life.

*Prepare our citizens.

For what?

Our leaders should prepare their own families, homes and workplaces for all emergencies.

This is a little conspiracy-theory-ish. But, agreed: we should have an emergency response plan. And I'm sure we do. Now that I'm thinking about it, what is the city's emergency plan? What would I do? And how would people keep reading this blog?

The rest of the letter goes on to try and define the complete role of government, as well as the description of the ideal leader. Let's fast forward:

(Sincerely)
PATTI DIMICELI, Annapolis

Patti, I included you in my musings because, and only because, you agree that fighting crime should be the city's #1 priority, and they have been doing a hell of a not good job at it. Nice. Point taken.

September is almost here, which means that the city council will actually start having meetings again, and hopefully they can do something meaningful AND helpful.

Capital Editorial: City Officials' Pay

In a recent post, AP declined to comment on the timing of the proposed mayor and aldermen pay raise, opting instead to talk about the level of compensation. I have just brewed myself a double-strength cup of Colombian coffee from Caffe Pronto--no sugar, no cream-- and am now ready to continue my analysis of this topic.

First, some background information on the issue. Here is how the current system works:
-a committee of citizens is formed no later than 1 year before a general election to study compensation
-the committee submits recommendations no later than 9 months before the next general election
-a public hearing is held, then the city council can decrease, but never increase, the recommended compensation
-changes approved by the council must be approved no later than 3 months before the election, and go into effect for the NEXT city council

The mayor's proposal would:
-change the pay for the CURRENT city council
-tie pay increases to cost of living (inflation) increases
-this would, by necessity, change the charter of the city

The Capital ran an editorial in opposition of the proposal to raise the pay of the mayor and alderman. AP will now reprint this editorial, and offer insightful commentary on selected issues. As always, the bold font represents the text as it originally appeared, and the insightful commentary appears in normal font.

Businesses are struggling to maintain payrolls. People are losing jobs, or at least being denied raises. Even state government is leaving vacant positions unfilled.

True, perhaps, but remember: city government is distinct from state government, and it most certainly has a different role and structure than the private market. We should be careful when comparing government to the private market, because government exists to provide the services that cannot exist in the private market (public goods).

So when Mayor Ellen Moyer suggests a pay increase for herself and the city's part-time aldermen, we have to wonder if she and the City Council have lost their collective mind.

This blog spends the majority of its time wondering that.

If our elected officials want taxpayers to believe that times are bad and revenues are stretched thin, is it a good time to be pushing for a 3 percent raise?

I would say that the state politicians would like us to believe that the times are bad--see AP's posts on the 'doomsday budget'--but the mayor usually doesn't care about the prevailing conditions. She tends to do what she wants, when she wants, regardless of circumstance.

It's a rotten time.

Agreed, but for different reasons. It's a rotten time because it affects the current council.

The City Charter allows the council to adjust its members' salaries every four years in decisions that apply only to the new council seated after the next election--a protection, demanded in rulings by the attorney general, against elected officials sweetening their own compensation.

Now you're talking!

The council followed the charter in 2005 when it voted for raises for the next council, taking salaries to $70,000 for the mayor and $12,600 for each alderman. So why, then , is the council considering more raises--another $2,100 for the mayor and $380 for aldermen?

They are considering more raises because they are grossly underpaid for what they do. Click here to learn why.

Ms. Moyer says she is simply following up on the council's approval of a report--authorized by Dick Israel before he was elected alderman--that recommended making mayoral and aldermanic salaries more comparable to those in neighboring jurisdictions. Her proposal actually changes the charter, which wisely prohibits elected officials from immediately adjusting their own salaries.

This theme appears over and over in the Moyer administration: "Don't blame me, the process was already underway.", or "There is nothing I can do about this, it is a regional/national phenomenon." Note to the mayor: you can change whatever you want, or at least vote to change it.

Citizens should be outraged. The mayor and aldermen may change the charter to give themselves an out-of-step cost-of-living raise recommended by someone who is now on the council. There is a reason the charter protects the public from aldermen who give themselves raises. The charter shouldn't be changed.

Agreed, this is BS. But they need to get paid more! Keep reading to find out why.

We have another problem. Although the current salaries are very conservative, some city officials just don't deserve a raise--particularly those who spend more energy on solving problems outside the city than inside it.

Very conservative salaries = grossly underpaid.

The memorable debate on banning toy guns has been succeeded by one on banning plastic bags. The council has gone after alleged racism at Annapolis High School, the Annapolis Symphony Orchestra and finally the Naval academy--none of them institutions over which it has any authority. It apologized for slavery--is an apology for the Iraq war next?

Hallelujah!

A serious municipcal subject, traffic congestion, was handled by paying $150,000 for a study that told the city nothing--and so nothing has been done. Market House struggled to re-open and a new police building has been falling apart. We won't even talk about crime,

good, because I am getting tired of typing...

which no one in City Hall seems to think is a big issue.

City Hall is a small place--they can't think of everything. Just kidding....Hallelujah!

For this they deserve a raise?

No, they don't, not for this. But in general, they do. Please keep reading...the big analysis is to come!

How about a performance evaluation instead?

So, let's give the mayor and aldermen a performance evaluation. E-mail us your comments--good and bad--at capletts@capitalgazette.com. We'll make sure they know how you feel.

Attention capletts@capitalgazette.com, that would be a long email....how about you just click on this site to see how I feel.

Ok, let's do some analyzing.

In economics, labor theory says that a person is paid exactly the value of what they produce. Many times this is hard to calculate, but let's look at a simple example. Let's say Billy can cook $20 worth of cheeseburgers per hour. Now, let's say that Billy takes a job at McDonald's, where he earns $15 per hour. Burger King realizes that they can pay him $16 per hour and hire him, while still making a $4 per hour profit on Billy. Then McDonald's says: heck, we can hire Billy back, pay him $17 per hour, and still make a $3 per hour profit. The process continues until Billy makes $20 per hour, which is his worth.

THE POINT IS, YOU GET WHAT YOU PAY FOR. IF YOU PAY $10 PER HOUR, YOU GET A WORKER WHO IS WORTH THAT. IF YOU PAY $20 PER HOUR, YOU GET A WORKER THAT IS TWICE AS GOOD.

(This is a very simplified analysis. Actual wage theory takes into account utility--not just pay--and also takes into account the cost (rent, utilities, overhead) of the worker, not just his value. Email me if you are a glutton for punishment and want a complete explanation of this idea.)

An alderman makes $12,600 per year. Any adult that can show up for work with pants and shoes on is worth more than $12,600 per year. Any person who has the ability to actually win an election is worth way more than that.

So, automatically, an alderman is making less than his/her value. Just as Billy went to work for Burger King, the aldermen are looking for a way to be paid their worth.

There are several ways to do this. A person might be willing to make less than their worth in the short term, if they believe this will increase what their worth actually is in the long term. Take Wayne Taylor, for example. He was the Ward 4 Alderman, and as an adult was worth more than $12,600 per year. But, his aldermanic seat helped him earn appointment as the Director of The Department of Aging for Anne Arundel County, making (I'm guessing) $125,000 per year. Think of how easy his job must be....all he has to do is make sure time passes!!!! Here is the checklist for the director of the department of aging:

1. make sure sun rises in the east
2. make sure all clocks have good batteries
3. oversee calendar industry
4. earn $125,o00 per year

Can we blame the aldermen for wanting to do the same thing? You mentioned the bills about toy guns, plastic bags, slavery, etc. Well, the aldermen do these things to get their names known so they can run for mayor, county council, or delegate and at least earn close to what they are worth! As aldermen, they have to buy their own stationery for goodness sake. Although I have no evidence to support the following claim, Alderman in the City of Annapolis has to have the fewest professional resources of any elected position.

And the mayor.....the mayor makes about half of what her department heads make...and they are her subordinates! If you are the mayor, either the non-monetary aspects of the job are valuable enough to attract you to the job, or you are trying to increase your worth for the future.

As for raises based on performance, let's take a step back. Remember, the goal of compensation is to pay the worker what he/she is worth. The theory of a merit-based raise assumes that the level of compensation was previously correct, then examines performance as a way to see if the value of the worker has increased. If it has, then a raise is given to keep the worker's pay in line with his/her worth.

SO, FOR THE CITY OF ANNAPOLIS, PERFORMANCE-BASED RAISES ARE IRRELEVANT BECAUSE WE ALREADY DON'T PAY THEM WHAT THEY ARE WORTH.

Good grief, I need some more coffee.

Anyway, there is something we can do about this:

-wait until the time dictated by the current charter to determine pay for the next council
-get serious about paying more money
-since the new aldermen are paid what they are worth, they will (hopefully) worry about city business and not the stupid bills you talked about
-think about having a city manager form of government

Do Our Elected Officials Make Too Much Money?

At Monday's city council meeting, a public hearing will be held for (amongst other things) a change in the way cost of living raises are given to our elected officials.

If you want to read about how the mayor and aldermen will receive a bigger raise than the police officers under the current proposals, click here. The truth is, the two events probably have little to do with each other. A study on elected official compensation has been in the works for some time now, and I doubt they could have predicted the details of the negotiations with the police union. Frankly, AP has no interest in discussing this particular aspect of this issue at this time.

What I am interested in talking about is the level of compensation for the elected officials. Although I started this post yesterday, I had somewhat of an impromptu conversation about this issue with the gentleman behind http://www.annapoliscapitalpunishment.blogspot.com/ this morning and we tend to agree on most of it.

Former Governor Ehrlich often preaches the value of having candidates for office that have succeeded in their private lives. The problem is, most of these people would have to take a pay cut if they were to be elected. The mayor, a full-time city employee, makes $70,000 per year. Each alderman makes $12,600, which will not pay your mortgage if you own any house in the city. People make work decisions based on utility, which means the total value to them of the job's salary as well as non-monetary factors such as hours, convenience, and having plenty of attractive co-workers in the office.

For the system of government that we have, $70,000 is probably not enough. The non-monetary aspects are great: prestige, fulfillment of public service, possibility of a sweet cabinet-level position in the O'Malley administration, etc. But, any city mayor could probably make twice their salary in the private market.

(Of note, currently the mayor appoints a city administrator, who makes slightly less than twice the mayor's salary and does, well, slightly nothing. If he did slightly anything he may consider fixing the air conditioning problem in the market house or replacing some other department heads. {Note to city administrator: you can do it! Just pretend like the other department heads are named Patmore}).

And the aldermen, heck---being an alderman is/should be a full-time job. It takes time to respond to constituent needs and adequately research bills. But with the paltry salary they receive, they either have to be independently wealthy, live off the land, or have another full-time job. Can we really blame aldermen for wanting to run for mayor or county council? Their hourly wage probably works out to be worth 3 Auntie Annie's pretzels at Market House.

Here is the list, to the best of my knowledge, of what other full-time jobs the aldermen have:

Dick Isreal: attorney, longtime assistant attorney general

Mike Christman: former navy pilot, current retail company COO

Classie Hoyle: educator, educational activist, baltimore slumlord, oops, landlord

Sheila Finlayson: educational lobbyist, school board critic/crusader

Dave Cordle: investigator, state's attorney's office

Julie Stankivic: health policy analyst (in baltimore, btw)

Sam Shropshire: founder, Maritime Republic of Eastport (yay!), involved in various non-profit organizations (note: I am not quite sure how or if Alderman Sam earns other income)

Ross Arnett: #1 greatest job ever (economist), retired federal government executive

How do we solve this problem? I'm going to stop short of saying this is the solution, but consider this idea:

-get rid of city administrator

-pay the city council more money and increase their responsibility/ability to serve

-have city council hire a city manager at its discretion (not by appointment by the mayor)

-have mayor be figurehead, preside over city council

-have city manager run logistics of city operations

-enjoy better city

Well? Whadda' ya think?