Thursday, March 29, 2012

Free roads, health care and This American Life

Shortly after reading Joseph's post, I finally got around to this to this extraordinary examination of the small government movement from TAL. The whole thing is worth listening to but the third act struck me as particularly relevant:

Robert Smith -- It's no accident that Colorado Springs is the place where all this happened. Colorado Springs is not just conservative, it is famous for being conservative. It's the home of Focus on the Family, evangelical churches like the New Life Church, four military bases, Air Force Academy. It is in the most right-leaning congressional district in all of Colorado. Add to the mix outdoorsy types, mountain bikers, ex-hippies, and you get this kind of pioneer leave me alone vibe around here.

The citizens of Colorado Springs didn't just believe in limited government, they made it law. 20 years ago they passed the Taxpayer Bill of Rights. TABOR, everyone calls it. And TABOR-- you may have heard of this because other states have put it on the ballot. But it started right here in Colorado Springs. Under TABOR, if you want to raise or impose any tax at all, you have to get the voters to approve it first.

Jan Martin -- Our voters very rarely will support a tax increase.

Robert Smith -- This is Colorado Springs City Councilwoman Jan Martin, one of the people who deals with TABOR day in and day out. TABOR is like a set of handcuffs for city government. It limits how much you can grow your budget, makes it hard to shift money from one thing to another. The city survives mostly on sales tax, which is great when the town is filled with tourists, right? All those hikers and mountain bikers buying energy bars.

But when a recession comes along, living off sales tax is a disaster.

Jan Martin -- What we experienced when the downturn occurred is, immediately, people stopped buying, which meant our dollars dropped faster than most communities. And we crashed and burned almost simultaneously with the economic downturn.

Robert Smith -- In 2009, tens of millions of dollars the city was counting on didn't materialize. Jan believed TABOR only gave her one choice. She had to ask voters for the tax increase you heard about. And this wasn't easy for Jan. She's a Republican. She owns her own business. She has an MBA in finance. But she thought, I just need to be straight with voters about the situation we're in.

She said, look., the city needs to raise $28 million. That means the average homeowner would have to kick in about $200 a year.

Jan Martin -- To go before the voters in the middle of an economic downturn, I will admit, it was pretty gutsy. But I really felt as an elected official I owed it to the general public to give them an option before the cuts were made.

Robert Smith -- It wasn't even close. The voters in Colorado Springs said no way. Nearly 2/3 of them voted against the tax.
The town responded first by making most city services ala carte (you want streetlights on your block? Send the city a check) and then by extensive privatisation, with somewhat mixed results:

Robert Smith -- Roland was doing more work for less money. That's the dream of privatization, right? But the bigger picture here is more complicated. Remember, Roland isn't the only cost involved. The private landscaping firms add a healthy profit on the top, that's normal. And they had to purchase a lot of the things that the city already had, like equipment.

So did the city really save any money here by outsourcing, by privatizing Roland's job? We asked the city of Colorado Springs this question over and over again. And they hemmed and they delayed. They couldn't find a number. Then they said it's tough to calculate. In the end, all we could get from the city was this. Outsourcing Roland Hawkins and all those other workers might save money in the future.

Because medical costs will rise. Pension costs could also rise. Better to get Roland off the books now, privatize him now. But as for last summer, the first year of the parks experiment, the city couldn't say if they saved a dime.

Overall, the city's budget for parks is about $12 million now, a lot smaller than it was at its height. But that's mostly because the parks department is doing less. They've closed swimming pools and laid off community center employees. They're replacing fewer playgrounds and fences and bridges. And Roland, for his part? He's not going back to the parks this summer. He hurt his back.

What I learned, though, from talking to the people in Colorado Springs is that for a lot of them these calculations don't really matter. They don't care if privatizing actually saves the government money, so long as the government is doing less.

City councilwoman Jan Martin says she hears this all the time. That it's become a matter of faith in the city that private is better. And she tells us a story. In the dark days, after the tax measure was defeated, city council was having another meeting about slashing government.

Jan Martin -- And a gentleman came up to me and actually thanked me for the adopt a street light program. He had just written a check to the city for $300 to turn all the street lights back on in his neighborhood. And I did remind him that for $200 if he had supported the tax initiative, we could have had not only streetlights, but parks and firemen and swimming pools and community centers. That by combining our resources, we as a community can actually accomplish more than we as individuals.

Robert Smith -- And he said?

Jan Martin -- He said he would never support a tax increase.

Robert Smith -- So for him it wasn't the money. He was willing to pay more to turn on the street lights than to pay for all city services.

This points to a difficulty with this debate. The anti-tax, pro-privatisation movement revolves around language of government inefficiency and waste, terms that wouldn't be out of place at a meeting of financial analysts.

But a segment of the movement (and, I suspect a fairly large one) is represented by this man, someone who's aversion to taxes is so strong that he would rather pay half again as much and get far fewer services. This is not necessarily an irrational decision (he might have objected to people in other neighborhoods who paid less getting streetlights as well -- that's not a position I would take but it's a perfectly defensible one), but it's not a financial decision and discussing it in terms of waste and inefficiency won't accomplish much.

This would be a good time to bring Jonathan Chait's seminal essay exploring small government and privatisation as ends to themselves into the discussion, or it would be a good time if it were an earlier one.

I'm going to bed. Discuss it among yourselves.

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