Q: So after the recession hit, there was a lot of discussion about government collaboration. Was that just talk?
Krebs: If I hear one more local government official say, “You don’t understand … We’re already collaborating everywhere we possibly can,” I will absolutely say something unkind. If you were to ask an innovative businessman, “are you doing everything you can?,” his response would be: “I hope so. We’re not completely sure. That’s why we do Six Sigma, we do Kaizen (business improvement programs).”
The governor made a mistake — small “m” mistake – when he cut the Local Government Fund in the last budget. He expected local government officials to respond in a business-logical manner. They did not. Instead, what they all did was promptly hunker down, did the rope-a-dope, and said: “Oh no, we’re doing everything we possibly can. Don’t ask us to do anything more.”
Q: What should the outcome have been?
Krebs: They should have gone to the governor and asked for funds to do additional collaborations, shared services and consolidation.
I’m a recovering school board member, a recovering county commissioner. I’m a recovering politician. I understand that school superintendents, for example, are people who start off as teachers, by and large. The best, most innovative superintendent I’ve ever known and worked with was a former Air Force colonel. He had a radically different viewpoint of everything. This goes to the issue of whether we can teach leadership to local officials. We’re trying to teach them a radically different way of thinking and communicating.
Q: How long is what we’re doing now sustainable?
Krebs: It depends on how long the voters are willing to tax themselves at, I believe, an unnaturally high level. In most studies, Ohio’s state tax obligation is fairly modest. We usually rank 34th. We’re almost always in the top 10 in local taxes. I’ve not encountered anyone who says they’re happy with their local taxes.
Q: Do you foresee a day when the state is going to force this issue?
Krebs: Yes. The state will not accept failed local governments. The state will not tolerate that. … Counties did not create the state; the state created counties to perform certain duties.
Q: What about consolidation of local school districts?
Krebs: The motto here is, “Let’s not kill the high school mascot.” The biggest impediment to school funding reform is the high school mascot. No one wants to see it taken out on the sidewalk and clubbed like a baby seal. Having said that, what you can do is like what they did up there between the Orrville and Rittman school districts in northern Wayne County, two non-contiguous school districts which combined their superintendent, treasurer and all the back-office operations. They still have their separately elected school boards, but with a joint superintendent and treasurer. What that means is that they’re now saving $270,000 a year and, for the first time ever, they’ve hired a French teacher.
Q: What is it costing taxpayers to have all this administration?
Krebs: Hundreds of millions of dollars. It’s impossible to say because of the lack of data. … We have no truly good mechanism to bring better government at the local level because of a lack of data.
Q: How did we get here?
Krebs: Ohio is the manifestation of the perfect dream by Thomas Jefferson. He was the draft writer of the Northwest Territory language. He believed in decentralized government. He believed in a ruling elite made up of artisans, i.e. blacksmiths, coopers, barrel makers, merchants and farmers. He was terrified of the ruling elite — a la (Alexander) Hamilton — of the bankers. He wanted a very diffuse ruling class of overlapping (occupations). Ohio is the perfect realization of Thomas Jefferson’s dream. We have overlapping local government. We can’t tell you who’s in charge of who sometimes. It’s very confusing. It’s very hard to be a dictator in Ohio.
Having said that, look around at the commonwealths, like Kentucky. … If you fly into the northern Kentucky airport and you want to do a project, and you stay on that side of the river, you can get your three memorandums of understanding signed by three different parties in that one afternoon, and fly out — with your business locating in northern Kentucky.
On the Ohio side, after nine months, you’re still not sure you reached out and touched every little local governing body that has oversight. It’s just how we’re structured. If we want to compete — and not just against Indiana, but India — we have to give some thought to a new way to structure this. In order to do that, though, we have to get past some of the status-quo folks who like their pensions, like their salaries … and like being important.
Q: Talk about the book.
Krebs: Back in 1997, I did a short monograph when I was in the Ohio House. I had been there like four years or so. I was looking around, and thinking, “Y’know, most public policies fail.” They don’t achieve the goals we want them to achieve. They never get there. Sometimes they achieve goals different than we had hoped. …
Q: What’s an example?
Krebs: Have we ever fixed poverty in America? We can point to a few small programs here and there but, when we look at the trillions of dollars we’ve spent on anti-poverty programs, it hasn’t really had a whole lot of impact. …
There’s a mathematical construct called the chaos theory. It sometimes explained as the butterfly flaps its wings in Mexico and it ends up raining in New England. It’s much more than that. So often we think of public policy as a linear relationship: “Here’s my problem. I will propose a solution. And I will address the problem.” But it never quite gets there; it always gets sidetracked and never gets to its goal. …
In reality, it’s a chaotic universe filled with many other entities … influencing what the proposed solution was. The question is: How do I go ahead and start to apply this in a mathematical construct so we can start to figure this stuff out? … By my estimation, most legislation is not done in a scientifically rigorous manner. We need to get more data so we can analyze: What’s happened? Did it work? How did it work?
I’ll give you another case. The Model Cities Program is probably considered to be one of the most complete failures of the Great Society programs, except when you talk to black activists who tell you that it increased the civic capacity of the African-American community. And according to them, it was shut down because it increased their capacity too much. In an effort to do the Model Cities Program, we ended up creating a completely different end result. Shouldn’t we know about that in the beginning if our goal is to create more black civic capacity? Which I think is a very valuable thing to do.
If a public policy does no good or does something different than what you hoped it would do, should you actually do it?
Cash for Clunkers — a great example of this. … What it really did was destroy our transportation system because the funding model of Ohio and the federal government is predicated on a gasoline tax, based on a relatively low taxation rate and high consumption. Cash for Clunkers encouraged us to trade in cars that got 20 miles per gallon for ones that got 30 mpg. Well, as we all trade in our Hummers for Hondas, it led to a decline in revenue, which is why, at the federal level, we’ve now taken about $30 billion of your income tax money to prop up the Highway Trust Fund — because it simply doesn’t generate enough money from the gas tax to begin to pay for roads and bridges. Cash for Clunkers just put fuel on the fire, to mix all my metaphors.
Jimmy Carter embargoed grain to Russia in 1980 and it has led directly to the deforestation of the Amazon. The Japanese in 1980 realized that we Americans were no longer trustworthy trading partners and they started supplying the funds for Brazil to cut down their Amazon forests and plant soybeans. Now, ironically, we have Willie Nelson and Jimmy Carter out there on the “Save the Farm” concert tour. God has a sense of humor and we’re often the butt of his jokes.
Ike Eisenhower built our system of highways, thinking it would make America safe — and it did. But it also made us dependent on foreign oil. So then we fight wars overseas, not for their sand, but for what lies underneath the sand. So Eisenhower deciding “I want to make America safe” — because the interstate highway was a defense system, people need to remember — caused this massive change.
Q: Talk about urban sprawl and the practice of local governments competing against one another for economic development.
Krebs: The local governments do not understand that, if you’re living in a particular region, you’re like a family — and it’s like you’re going to the refrigerator and you’re going to hoard food out of the common refrigerator. You’re just moving it from one spot to another spot. It’s a zero-sum game. At Austin Road, they brought in a law firm that had been in downtown Dayton. Tell me how this improves anything for the general region.
Very few people live where they work, live where they shop, or shop where they work. Yet our governments are predicated on the assumption that you will do almost all of those activities within that radius of where you are. That assumption predates something called the automobile. The automobile has been able to disrupt that entire fabric.
There’s a great book that nobody reads because it’s too damn uncomfortable to read. It’s called “Main Street Blues.” It is about a town in the Midwest that, in 1953, the year I was born, had 1,350 inhabitants. On Saturday nights, the downtown was so packed that people could not walk on the sidewalks. They had two movie theaters, three drug stores, three grocery stores, three women’s clothiers, two men’s clothiers, two shoe stores and a stationery store. And I’m talking about Camden, Ohio. Now they can’t even afford to put up a three-light stop light in the middle of town. They put up a flashing red light.
This is why school funding doesn’t work anymore in Ohio. In 1953, you conducted almost all of your economic activity within five miles of where you lived. Now almost nobody does. Because of all this, we have taken on this (attitude) of … if I’m going to get tax dollars, I’m going to get them from somebody who’s passing through. The ideal Ohio school district to live in is one that’s made up of outlet malls, industrial parks, and you own the only house. That is the perfect county, township, city and school district to live in. The rest of us live mostly in a community of bedrooms. …
Q: If this continues unabated?
Krebs: Ohio has a real danger of slipping into second-class state status. Look. So far we have not been growing in population. We’ve just been shifting the population. We do not seem to understand that the demographics have changed, that the young and restless have different needs than what my generation does.
Q: What do you think of the governor’s proposed shift away from the income tax to a broader sales tax?
Krebs: It’s something we had to have happen. Back in 2005, we moved away from a manufacturing machine tax to basically a commercial activity tax. This is merely another step in that process. Some of my friends on the other side of the aisle say, “Well, we don’t like that.” And I say, “You got any other ideas?” They say, “Well, no.”
This goes along with his expansion of Medicaid. One of key things you need to be when you’re in elective office is philosophically consistent. If you’re going to say “no” to the federal Medicaid expansion, because that’s federal money we’re having to borrow, then you also need to vote “no” on the Ohio Department of Transportation budget — because that’s also heavily propped up by federal money we’re having to borrow. You also would have to vote “no” on the entire budget because almost every aspect of our state government has some federal pass-through money. I understand where some of these folks are coming from. They’re saying, “We’re going to vote ‘no’ on the Medicaid expansion because we hate Obamacare and we don’t like the idea of this federal money that they do not have coming here.” Fine. But you have to be philosophically consistent. The citizens can kinda sense this.
For the upper Miami Valley, it’s all about Wright-Patt. Everybody does know, I hope, that what we’re doing is essentially borrowing money from foreigners so that we can have a defense department to protect ourselves from foreigners. They do know that, don’t they? That’s not going to be sustainable in the long term either. …
Q: What does the I-75 corridor between Dayton and Cincinnati look like in 20 years?
Krebs: I think it’s going to be different from what everyone is assuming. They’re assuming it’s all going to grow together into this vast megalopolis. The Millennials do not drive. They don’t like to drive. The young and the restless are terrified of a DUI. So they will not drink and drive. They will drink and take mass transit or a taxi, but they will not drink and drive.
So what you’re going to see is downtown Cincinnati becoming a true hotbed of young people with letters after their names — the educated. You may have hit your outward expansion on sprawl — because the young and the restless don’t want to do that. They like a different lifestyle. They have a different way of looking at things. … You’re still going to see some sprawl for commercial stuff, but farmland itself has suddenly hit $11,500 an acre for some spots. Farmers no longer feel the overwhelming economic necessity to sell. On residential (development), I think you’ve hit your high-water mark. The young and the restless want to come back into the inner cities to live.