So is this announcement relevant to the rest of you who are not property tax assessment people? If your agency is charged with enforcing any law or any kind of regulation, the answer to my question is yes. Much of what government does involves trying to get citizens and organizations to hire on the basis of merit, obey the speed limit, protect the environment, or have safe workplaces. We call these compliance functions.
Since I typically spend time helping compliance functions decrease their reliance on direct enforcement tools, such as fines, penalties, or licensure removal, ORPS is even more intriguing to me. They have effected this great compliance improvement without using direct enforcement tactics.
ORPS exists to assure property tax equalization, but they only have indirect means to do so. They have no direct authority to equalize or enforce uniform local assessment practices across taxing jurisdictions. In fact, they don't even have the threat of 'using the stick' at their disposal. Yet, in four years time, they went from overseeing a statewide 'system' where annual reassessment was virtually unheard of to a system where one-third of the nearly 983 cities and towns were assessing at 100 percent of current value.
How did they do that? Looking more closely at what ORPS did, their use of what we call voluntary compliance strategies become apparent. They:
- Defined accepted norms and standards. The first step in voluntary compliance is making sure EVERYONE knows what the standards are. ORPS has worked hard to establish clear, unambiguous statewide norms, relying extensively on accepted professional standards of the IAAO for mass appraisal of real property.
- Engaged those who must comply in setting the standards - up front. ORPS leadership invited assessors, property tax directors, and local government and school district leaders to sit down with them. As a consequence, a Real Property Tax Alliance was formed. The Alliance adopted as their Guiding Principle Number 1 the support for statewide property tax equity through the use of current, full value assessments. Having those who must comply understand and develop the norms is a powerful strategy -- not only to build ownership among those participating in the development, but their peers as well.
- Provided new incentives for meeting the standards. Incentives reward compliers who get it right. Incentives might be monetary. They might be recognition or a public 'thank you.' In ORPS' case, they sought legislative funding and provided $5/parcel for every year localities conducted an annual reassessment at 100 percent of market value.
- Assumed compliers want to do it right -- helped them comply. I am frequently amazed at the number of requirements compliance organizations put in place based in part on the assumption that people, given the chance, will cheat. ORPS and other leaders in voluntary compliance believe people, given the chance, will comply - if they know how and it's easy to do so. These leaders spend their time on strategies to help people get their systems and processes up to standard. In this regard, ORPS did at least three cool things:
- First, they asked the assessors and county directors what they needed to produce annual reassessments. They then partnered with SUNY-Albany to conduct workshops designed to address the needs of the local assessment community and to collaboratively develop a set of recommendations on how to move forward with the program.
- Second, they changed the nature of their own services to local governments. ORPS leadership decided to redeploy some of their employees to regional centers to serve as consultants in support of the annual reassessment program. These consultants provide information, transfer knowledge and link local people with needed resources.
- Third, ORPS developed two self-study guides so that local assessment communities could assess how their own practices stacked up against IAAO standards.
- Made sure their own practices performed well. ORPS is responsible for crunching 'equalization' numbers - to determine comparable levels of assessment that local school officials can use to distribute tax levies equitably across local boundaries (where school district boundaries are larger than taxing jurisdictions). But ORPS' administrative process got the numbers out to local jurisdictions late - so late that practices of communities that were doing a good job were made to appear that they were not meeting IAAO standards. So, ORPS improved the performance of their own practices. For the first time ever, in the year 2000, there was no lag time to distort communities' efforts!
PSG has recently put other ideas in front of clients engaged in 'winning' voluntary compliance. They include strategies to:
- Build peer accountability mechanisms. Peer mechanisms encourage compliers to hold each other accountable to high standards. We helped the Minneapolis Public Schools design the content and process for regular visits of each school by a peer review team. These teams, made up of teachers, business leaders, and public members, assessed the visited school against "standards of effective schools" that the school district had adopted. With another client, we designed a "shared risk pool," where everyone 'paid' for a peer's bad practice. This adds a financial incentive to encourage other peers to do the right thing.
- Make good practice visible - celebrate those who get it right. Public recognition is an incentive, true. But it can be even more. The general public can become an important ally in supporting good practice. Having compliers vie for and earn the equivalent of a "Good Housekeeping Seal of Approval" that the public understands, and looks for, can provide important leverage.
- Report on the cost of non-compliance. We are usually aware of what it would cost to increase compliance. It is often experienced as a budget request - more staff, dollars for incentives, etc. What is not estimated is the cost of continued non-compliance. In New York State alone, the cost of inequity in property tax assessments, calculated using the cost of administrative or legal challenges and refunds of back taxes when successful, was estimated as high as $650 million. Once the cost of non-compliance is understood, public pressure for increased compliance can be rallied.
Did you find these new developments in compliance leadership relevant? If you're hungry for more, read "Winning Compliance" by David Osborne and Peter Hutchinson. It appeared in Government Executive magazine and appears elsewhere on our website, under "Reinvention Resources" (click on the "Articles" link).
In parting, I cite the ORPS' award nomination: "ORPS' consultative approach, combined with the new incentive program, is intended to encourage the use by all practitioners... of their common sense, imagination and suasive skills to advance (the) common purpose of fostering equity. In New York's "nobody in charge*" environment, these tools will serve the community well."
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