1 How We Pay for the Public Sector
WHERE THE MONEY COMES FROM AND WHERE IT GOES
Managers need to know where public money comes from and where it goes. That information can answer important questions like:
- What revenue options are available to governments? Non-profits?
- What are the advantages and disadvantages of various revenue sources with respect to efficiency, equity, fairness, and other goals?
- How will the US federal government’s financial challenges shape the financial future of the public sector?
- How, if at all, will governments address the challenges of income and racial inequality?
In January 2010, the United States Department of Justice (DOJ) received a formal civil rights complaint from a local community organization in Ferguson, Missouri. In their complaint, they accused the Ferguson Police Department of aggressive and biased policing tactics, including large numbers of traffic stops, searches, seizures, and arrests in the city’s African American communities. DOJ officials corroborated the report with the Missouri Attorney General’s office, which had also received several similar complaints throughout the previous five years. Both offices agreed to monitor the situation.
On August 9, 2014, Michael Brown, an African American teenager, and resident of Ferguson, was shot and killed by a Ferguson police officer who was investigating a nearby robbery. Ferguson police officials drew sharp criticism for the incident and their management of the subsequent investigation into potential police misconduct. Several weeks later, a grand jury declined to indict the police officer. In their view, the evidence suggested the police officer had reason enough to consider Brown as a potentially dangerous suspect.
The shooting sparked violent protests across the United States. Ferguson residents said the shooting was just the most recent example of the racist policing they had pointed out to federal and state officials years earlier. They implored Attorney General Eric Holder to immediately open a DOJ civil rights investigation into the Ferguson Police Department. Holder said his office would gather as much information as possible but cautioned everyone that anecdotes and demographics are insufficient to prove an accusation of biased policing. For several weeks, the country anxiously awaited word on what DOJ would do next.
On September 20, 2014, the DOJ opened a formal civil rights investigation. The report from that investigation was released in March 2015. It excoriated the Ferguson Police Department and the Ferguson City Council for actively and passively encouraging the sort of aggressive policing that Ferguson residents had decried. But perhaps even more importantly, it explained that the most compelling evidence of biased policing was not arrest records or police reports. It was Ferguson’s budget. The report said, “Ferguson’s law enforcement practices are shaped by the City’s focus on revenue rather than public safety needs.” It documented a r