Court Restructuring, Economic Development, and the State of New York Courts

Last night, New York’s Chief Judge Jonathan Lippman gave his annual address on the state of the judiciary.  In his introduction, the Chief Judge echoed a familiar sentiment to those who follow most of the recent developments out of Albany: “As Governor Cuomo has said, now is the time to reinvent government and to work smarter.  Now is the time, not just to find ways to reduce costs, but more importantly, to rethink and fundamentally transform the way we do business.” The address went on to highlight a number of social initiatives, including: raising the age at which defendants in nonviolent cases are considered adults from 16 to 18; preventing wrongful convictions through a mix of eyewitness identification safeguards, videotaped interrogations, expanding the DNA data bank and enlarging convicted defendant’s rights to access to the new DNA bank; and enhancing legal services to underserved populations, particularly to mortgage foreclosure cases and indigent legal defense.

The Chief Judge also noted that New York courts “must seek to create an even more hospitable environment for business.”  To this end, the Chief Judge called for expanded electronic filing (which is still not widely required in New York) and further announced the creation of a “Task Force on Commercial Litigation in the 21st Century” to help reinvigorate the Commercial Division of the state’s Supreme Courts.

However, absent from the Chief Judge’s address was any call for court consolidation or restructuring.  The current structure of New York’s Courts has been described as:

The most archaic and bizarrely convoluted court structure in the country. Antiquated provisions in [New York’s] state Constitution create a confusing amalgam of trial courts: an inefficient and wasteful system that causes harm and heartache to all manner of litigants, and costs businesses, municipalities and taxpayers in excess of half a billion dollars per year.

New York currently has a court system that features eleven trial courts, (California, who has twice the population, only has one), and a disproportionate appellate court system which divides the state into four appellate departments (one department contains half of the state’s population) which was set up in the 1890s. Compare the structure of New York’s court system to other major commercial states, such as California or Delaware (see charts for all the states at the Court Statistics Project):

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The idea of court consolidation in is not new in New York State, and a number of appointed Task Forces have visited the problem time and again (the Tweed Commission issued reports between 1955-58, the Dominick Commission between 1970-73, the Vance Commission between 1974-76, and proposals in 1986 and 1997).

Continuing this trend, in 2006 former Chief Judge Kaye appointed a similar Task Force to assess the effective of the state’s current court structure and propose appropriate reforms.  The group, commonly referred to as the Dunne Commission, issued a report which proposed consolidation of the state’s trial courts, and the creation of a fifth appellate department. After the report was issued, the recommendations were endorsed by former Chief Judge Kaye and then Governor Elliot Spitzer. As the Commission found:

[I]n the millions of cases that are handled in [New York] state courts every year, people waste countless hours making redundant court appearances, filing unnecessary papers and briefs, and suffering through delays caused by courthouse backlogs and inefficiencies.  In addition to confusion and aguish, the practical effect of this is lost wages, lost productivity, and higher costs and attorney’s fees for individuals, businesses and government entities. Given the number of cases affected (3.7 million cases are resolved annually in the state courts) these hidden costs add up to $502 million per year.

Although the $502 million certainly seems extreme, the Dunne Commission was quick to point out that this estimate had “been vetted by economists, and the [] National Center for State Courts has not only endorsed [the] projections but referred to them as ‘conservative.’”  Through restructuring, the State would see a budget savings of approximately $60 million a year, while private individuals, businesses and municipalities would realize a cumulative savings of over $440 million.  The report further supplied an appendix which included an economic analysis to show the basis for these financial conclusions. Older reports by New York’s own Unified Court System have also projected significant savings for the state.

Notably, the Dunne Commission did not focus on New York’s vast (and oft criticized) network of Town and Village Justice Courts, and recommended that further research be done for their possible role in restructuring. The State Comptroller’s Office has a court consolidation pamphlet for municipalities, which, if done properly “could help increase the efficiency and effectiveness of justice courts without jeopardizing local court revenues or lessening access to justice.”  Local court consolidation could save municipalities budgets until greater reform is accomplished. For example, in New Orleans the Inspector General issued a report on the performance of the municipality’s City Courts and Traffic Courts. The report found that by consolidating courts, the City would see approximately $2.5 million in annual budget savings.  As states around the country reel from budget constraints, court restructuring initiatives may continue to get a harder look.

Courts around the country are increasingly finding themselves slowed by increased caseloads, yet smaller budgets. New York’s court system is no exception, and after a particularly harsh fiscal year which saw deep budget cuts that caused widespread court delays and personnel shortages, in 2012 it will operate a court system with a budget  that has been called “the bare minimum.”   An overburdened judiciary should be an area of deep concern for all citizens.

State Incentives for Local Government Efficiency

States are currently in the business of promoting local government efficiency as a way to cut local government expenditures.   However, funding is a barrier for local governments that are tryting to take steps towards efficiency.  State incentive programs offer the funding that is needed for local governments to become more efficient through shared services, consolidation, dissolution, mergers, or cooperative agreements. 

The Local Government Efficiency Program in New York is a state incentive program that will provide technical assistance and competitive grants for local governments that seek to save money through consolidation, merger, dissolution, shared services, and cooperative agreements while at the same time still provide core governmental services to the community.  The grants are awarded through the LGeGrant Program which requires the municipality to go through an application process to be awarded the funding.

The Local Government Innovation Fund (LGIF) is an Ohio incentive program (click here for program policies) that will provide financial assistance to municipalities that are trying to set in place innovative and more efficient ways to deliver government services to their community.  Local governments seeking this award should be expected to describe how the plan will also improve the business environment and attract members to the community. With 45 million dollars available, 9 million for grants and 36 million for loans, the LGIF is a resource that local governments should use to implement innovative ideas.

For more information, and technical assistance, on local government consolidation, dissolution, mergers, and shared services visit the Center for Government Research, as well as, the Technical Assistance Manuel for New York’s Share Municipal Services Incentive Grant Program  prepared by the Government Law Center of Albany Law School for the New York Department of State, Division of Local Government Services.

Minnesota Taking Steps to Restructure Local Government Service Delivery

During the current budget crisis and recession local governments in Minnesota are looking to the state legislature for more flexibility on how they delivery their governmental services. A project to reform local government structure was sparked by municipal groups, including the League of Minnesota Cities, who have realized that in a down economy, and without consistent state aid, municipal officials need more flexibility in how they provide governmental services.  Six forums with municipal leaders were held around the state and from the information collected municipal groups compiled a report describing the current problem and providing recommendations for state legislators.

The report, Focus on Outcomes: Redesigning Minnesota’s Local Government Services, first acknowledges that local governments are in an unprecedented situation due to a large ageing population, a changing economy, and as a result an increase in service demands.  While the report outlines the need for restructuring it also identifies the barriers of restructuring.  The barriers include focusing service delivery on process instead of outcomes, a failing state and local relationship, limiting fiscal and political liability, and the lack of a state-wide plan.

The report, of course, has recommendations for the legislature including redesigning health and human services, children and youth education, transportation, public safety, administration, and government boundaries and structures.  Some examples of recommendations include: focusing health services on outcomes, increasing flexible learning options for students, sharing transportation equipment between municipalities, creating public safety districts and consolidation of services, sharing information technology between municipalities, and exploring opportunities to consolidate municipalities and school districts.

The report is available here.

Ohio Commission on Local Government Reform and Collaboration

The Ohio Commission on Local Government Reform and Collaboration was created in 2008 to recommend ways that the government can improve the efficiency and effectiveness of local government operations, reduce taxes, and improve economic development. 

Created by statute, the Commission is mandated to research restructuring and streamlining local governments and taxing districts, the realignment of services provided by state and local governments, reform the constitutional, statutory, and administrative laws to allow for collaboration, identify duplication of services, and to achieve cost savings for tax payers.  In their report the Commission focused on three categories of recommendations including an examination of how to incentivize local government collaboration connected to service delivery, reforming and improving the state and local tax structure, and studying the feasibility of alternative or restructured service delivery systems.

The final report describes fifteen recommendations on behalf of the Commission.  Under the umbrella of local government collaboration incentives the Commission recommends establishing a system of incentives to encourage local governments to collaborate on delivery of services, create seed funding to support start-up and transition costs associated with collaborative efforts, and incentivize municipalities to work together and use a single point of collection for income taxes. 

When seeking to reform local and state tax structures the Commission recommends altering state law to enable tax revenue sharing between local government so economic development revenue can be equitably shared within a defined region.  In addition, they recommend encouraging collaboration between the tax departments to support and incentivize projects aimed at local revenue sharing, overhaul joint economic development districts (JEDD) and zone (JEDZ) laws to make it easier for political subdivision to understand and use these tools, and to amend the Ohio Revised Code to limit the use of tax abatements for companies moving to Ohio.

Finally, while examining alternative service delivery models the Commission recommends encouraging regions to adopt regional economic development plans, create one-stop services for business and citizens, provide “home rule” legislation that will allow local governments to collaborate on service delivery, increase local government flexibility, create a clearinghouse of information for best practices and shared services, permit counties to regionalize, increase the role of Metropolitan Planning Organizations, and encourage the state library to research and store information on shared services.

Each of these recommendations is discussed in detail (with rationales and applicable research) in the Final Report available here.

Annotated Bibliography

The Commission has also provided an extensive annotated bibliography that identifies commissions and organizations (governmental and non-governmental) that conduct local government reform research in all states.  Each bibliography is organized and divided into three groups local government collaboration incentives, local and state tax structures, and service delivery models.  For each state that has reform initiatives dealing with these topics the Commission has identified the agency, report or initiative, provided a description of the reform efforts along with information to guide further research.

This bibliography is a great resource for government reform research. 

Annotated bibliography for Alabama – Indiana is available here.

Annotated bibliography for Kentucky – Wisconsin is available here.

Other subcommittee reports and drafts are available on the Ohio Commission on Local Government Reform and Collaboration website, available here.