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If only government was more like business
If government could be run more like a business, what would our elected officials do differently?
Just as happens with business revenue and profits, government revenues fluctuate with the business cycle. When times are good, a surplus results. Not so when times are bad.
For a private enterprise to survive, profits have to be retained as reserve funds to carry the business through the lean times.
When the reserve funds have accumulated to the point that they can be used for investments to expand the business, they often are – assuming an expanded business has a likelihood of continuing to earn a reasonable profit.
In the private sector, thriving businesses usually seek to become more efficient, since greater productivity frequently produces additional profits.
Is the public sector so different that it cannot mimic at least some of what is done in private enterprise?
Instead of investors and customers, government has voters and taxpayers to satisfy.
Private enterprise ordinarily charges what the market will bear, and government typically sets tax rates and fees as high as the citizens will tolerate.
While businesses are generally free to modify what they do and what services and goods they offer for sale, government must do some things come rain or shine.
We can normally get by without a particular store even though certain types of business must exist for us to carry on our normal lives. For example, we have to buy our food somewhere, but not necessarily at the same store.
One can daydream about doing with less government, but it’s not the same as watching one store close and another continue, or taking your business elsewhere.
Government often has a monopoly, or nearly so, on certain services; so we either live with it or move. This is a big difference between most private enterprise and government.
Some of us might move away when dissatisfaction with government is great enough, but few of us would want it to be our best option.
Instead, we would want our elected officials to behave in ways that rarely cause us to elect someone else.
Failing that, we would hope that our fellow citizens have paid enough attention to the workings of government that they do not put up with unacceptable policy choices by re-electing the ones who made those decisions.
Of course, paying attention to the same events doesn’t mean everyone arrives at the same opinions when elections are held.
The most that we could expect is that a majority of voters would make reasonable decisions if they have paid enough attention to what has occurred.
Reasonable behavior by voters is not so different from the behavior of informed investors and customers that we should expect government to behave in ways that are entirely different from private enterprise.
The biggest difference may be in the responsiveness of elected officials to a change in voter opinion.
Years may pass before we get the opportunity to oust an official whose decisions caused us to want someone else in office, and there may be little change until the election.
Any private enterprise that notices its revenue dropping as customers go elsewhere is probably going to try to respond a lot more quickly than government ever would.
Currently, we have one part of local government that looks most like a business, so perhaps ought to behave like a business — the Port of Bremerton.
At least half the property tax revenue collected by the Bremerton port district is paid by residents of South Kitsap, so we have an obvious reason to pay attention.
While the port commissioners have as their goal a self-sustaining operation in which tax revenue would be used only for capital improvements and not operating expenses, they aren’t close to achieving that goal yet.
They don’t need to ask voters to approve property tax increases, though that day will come; so our influence would be felt mostly when electing commissioners. The next election occurs in 2009.
The port district is considering something they call the “SEED” project, which would include a “business incubator” that would almost certainly require our tax revenue to subsidize operating expenses in addition to construction costs.
If we were merely shareholders in a private enterprise, we could sell out upon deciding that this SEED project isn’t likely to earn a profit.
What can we do as taxpayers when a government entity like the port district takes our money and uses it for something that is neither a necessary function of government nor a clearly good investment?
If you have a difficult time coming up with an answer to this question that would keep your money in your own pocket, then you are a giant step closer to understanding one reason why government doesn’t often behave like a business.
Robert Meadows is a
Port Orchard resident.