Governments show how to tax less, do less

July 24, 2010


In another country also called America, there were no credit cards and excessive debt was seen as a character flaw. In that America, my grandparents and their parents had discussions when they wanted to buy almost anything. The conversations focused on two questions: can we afford it and do we need it? If the answer to either question was “no,” they didn’t buy it.

So much of our personal and public debt in modern America comes from a refusal to ask these questions. We don’t need much of what we have and we certainly can’t afford it. But we buy it anyway.

The recession may be forcing us to come to our senses, however reluctantly. A Wall Street Journal headline on July 19 could be interpreted negatively, but to me it is a positive: “Cities rent police, janitors to save cash.”

The gist of the story is that increasing numbers of cities are outsourcing some of the most basic functions of local government because they can no longer afford to provide them. This has the potential of reducing costs, improving efficiency and reducing the size and reach of government. What’s not to like?

Why do local governments need to pick up trash, run libraries, or even enforce laws if the private sector can do it just as well, or better, and at less cost to taxpayers? Unions are one reason and control by politicians is the other.

The senior policy adviser to the mayor of San Jose, Calif., Michelle McGurk, is quoted in the Journal story: “These are cases where the question is being asked, ‘Is this a core service at the city level?’ “Faced with a $118 million budget deficit,” writes the Journal’s Tamara Audi, the city of San Jose dropped its custodial staff and hired “outside contractors to clean its city hall and airport.” Estimated savings: $4 million.

Maywood, a tiny city southeast of Los Angeles, is dismissing its entire staff and contracting with outsiders to perform all city services, including the police. A major reason for the police layoff was a decision by the city’s major insurance carrier to cancel coverage because of the high number of lawsuits against the Maywood Police Department, which amounted to $21 million in legal expenses and judgments. “Without insurance, Maywood is prohibited from hiring people who work directly for the city.”

What if this practice were to catch on in other cities? It would surely boost employment in the private sector, as more businesses would take over services now performed by government. Politicians are probably not going to like this much because it will likely erode their power and perks. But taxpayers should love it because it means saving money and there will be fewer excuses for not reducing taxes.

British Prime Minister David Cameron is on a similar track, proposing “a mass transfer of power from the state to the people,” as the London Telegraph characterized it. Localities would be asked to run bus services, set up broadband Internet networks and take over recycling duties, among other tasks.

A recent Washington Post series underscored the problem of government waste, especially at the federal level. In what was formerly known as “the war on terror,” the story tells of a hodgepodge of many overlapping agencies and redundant work: “The top-secret world the government created in response to the terrorist attacks of Sept. 11, 2001, has become so large, so unwieldy and so secretive that no one knows how much money it costs, how many people it employs, how many programs exist within it or exactly how many agencies do the same work.”

Many Americans may not understand the inner workings of government, but they understand waste and duplication. Government claims it can’t afford to cut anything, but it never asks us if we can afford (or want) to pay more taxes.

Republicans and conservatives might wish to campaign on a promise to streamline government by outsourcing work government has no business doing if it can be done better and less expensively in the private sector. The unions won’t like it, but those of us paying the bills will. So, too, would my grandparents and their parents.

— Cal Thomas is a columnist for Tribune Media Services. tmseditors@tribune.com


Richard Heckler 7 years, 9 months ago

If some of the big money privileged class want MORE tax breaks they are available as we speak. Yes these people could start new industries and hire USA employees.

There are numerous tax breaks associated with owning a business and employing hard working USA blue and white collar workers.

In the last 30 years tax breaks have NOT kept corporate USA from supporting the Communist Chinese government with our jobs.

no_thanks 7 years, 9 months ago

I'm not a big Cal Thomas fan, but I think this is one of his more thought provoking articles. What if the City focused on providing just core operations, and eliminated everything else from the budget. What would the impact to our taxes be if the golf course, the library, the T, the sanitation department, etc... were privatized? I don't know the answer, but my guess is it would be significant. What if all of the other "social programs" were funded by the private sector? JackThe Ripper complains about the CID's being that "it picks winners and losers". Doesn't our City Commission do the same with the social programs as every social program is not provided funding.

just_another_bozo_on_this_bus 7 years, 9 months ago

"What would the impact to our taxes be if the golf course, the library, the T, the sanitation department, etc... were privatized?"

"What if all of the other "social programs" were funded by the private sector?"

Quite simply, they would either disappear, or would be available only to the wealthiest of us. Read a Dickens novel if you want to see what that would look like.

Scott Drummond 7 years, 9 months ago

Or, at the rate we are going, stick around another 20 years and you can experience it for yourself.

just_another_bozo_on_this_bus 7 years, 9 months ago

"Why do local governments need to pick up trash, run libraries, or even enforce laws if the private sector can do it just as well, or better, and at less cost to taxpayers?"

Well, in most instances, they can't.

HaRDNoK9 7 years, 9 months ago

Ask Tony Soprano what would happen if sanitation were privatized. More specifically you should ask him what would happen if YOU, the employee of a competing sanitation company were called in by the customer to pick up their trash instead of Barone Sanitation. Baseball bats and kneecaps. Or how would you feel about having 3 or more sanitation companies competing for space in the alleys east of Iowa on trash day? I submit that any saved taxes would be offset by increased police presence and the savings would be negligible.

Would each neighborhood then be responsible for hiring private security companies charged with policing their dumpsters? If that responsibility were taken from the municipal system and placed in private hands, wouldn't the cost of that security rise as competition in that area grew? Then we would be paying to share our neighborhoods with mercenaries.

Would the library be better served if it were privately funded, or would the facility eventually be laid to waste because anyone who knows how to use the internet would cease to value it? Most of Lawrences' cynics would argue that it is just an air conditioned bathroom for the lazy unemployed, and the homeless anyway.

Theoretically, I love the idea. Ultimately, I think it would be irresponsible and would be an immediate source of corruption on a scale that few would be able to anticipate.

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