Facing immense fiscal and political pressures, many local governments are looking for ways to fund services without raising taxes. But officials need not curb their enthusiasm for fiscal responsibility if they simply put the brakes on being in the parking business. Pennsylvania has 41 special government parking authorities; the rest of the nation, combined, has five. Despite their abundance, few can explain exactly why Pennsylvania relies on government-run parking monopolies.
Earlier this month, Gov. Tom Corbett suggested the commonwealth consider leasing state park operations and services. Almost immediately and without thoughtful consideration, pundits launched political fire, claiming "privateers" would exploit or commercialize our natural resources beyond recognition.
This report surveys the scope of Yellow Pages Government in Pennsylvania, looks at examples of state and local privatization throughout the country, and outlines best practices to equip lawmakers to successfully transition government out of unnecessary services by implementing a variety of models.
Recent Blog Posts
"They are going to take away your pension!" is a common scare tactic used by Pennsylvania government union leaders to oppose pension reform (even though private school unions have agreed to pension reform).
Such a scenario is no longer fiction for workers in Detroit. Yesterday a federal bankruptcy court ruled the City of Detroit has the ability to renegotiate pension benefits, like any other contract with the city’s 100,000 plus creditors. The dramatic development has widespread implications across the country—including Pennsylvania, where unfunded local and state pension liabilities surpass $50 billion.
Ironically, union officials' refusal to consider reform has endangered the very pensions they claimed they were protecting.
We've noted before the desperate municipal situations in Scranton, Pittsburgh, Allentown and Harrisburg. Government union leaders' unwillingness to compromise and ignore fiscal reality have put these cities on Detroit’s destructive path—harming taxpayers, residents and government employees.
Only by depoliticizing government pensions with 401(k)-type plans will state and local workers be able to keep their pension and create a system that’s fair to new workers and taxpayers.
An article in today's Wall Street Journal illustrates how government union leaders halted any reforms that may have prevented Detroit's bankruptcy:
A major expense for Detroit is the cost of lawsuits filed against the city for various alleged injuries on municipal property. At the transportation department, there were hundreds of claims arising from bus accidents alone. How many of those claims were fraudulent? How many were settled (with the cost of settlement and legal fees posted against DDOT's budget) at unnecessarily high cost? ...
In the DDOT we tried to hire our own lawyers to fight these claims. But we were blocked by city charter provisions prohibiting any city department from hiring outside counsel without the approval of the Detroit City Council. When we inquired with the mayor's office we were told that the union representing the law department—in Detroit, even the lawyers are unionized—would block any such approval.
Philadelphia faces a similar fiscal crisis, for many the same reasons, as governor union leaders are working against taxpayers' in the City of Brotherly Love. Axis Philadelphia writes about a proposal to block the mayor from appealing an arbitration ruling requiring the city to giver workers 3 percent raises for the next three years:
This proposed intervention in the bargaining process is not just a cynical attempt to pander to labor; it is a bona fide bad idea. Imagine the reaction if someone in Council introduced a bill to forbid unions from appealing an arbitrator's decision? There would be weeping and gnashing of teeth over the unfairness of it all. Taking away the basic rights of working men and women and etc. and so forth.
Shouldn't that equally be true of the taxpayer's rights? It is, after all, the taxpayers who foot the bill for contracts for city employees. The average fire fighter makes $58,000 a year and gets $44,000 in benefits. This is not chump change, especially in a city where the average household income is $37,000 a year. It’s incumbent on city managers to keep those costs under control.
Our elected officials aren't in office to protect the rights and power of city unions; they are supposed to be there to protect the taxpayers.
As Matt Brouillette explained in a recent commentary, government union leaders' unwillingness to compromise regardless of the fiscal conditions pushes cities towards bankruptcy—harming taxpayers, residents and government workers themselves.
Pennsylvania is close to adopting Missouri's 40 year old failed land banking policy. House Bill 1682, which has already passed the House and the Senate's Urban Affairs and Housing committee, would enable local governments to establish public entities that could acquire land, incur debt, and develop vacant properties. However, these entities often block development.
Missouri' Show-Me Institute discovered St. Louis' land bank refused almost half of all purchase offers from 2003 to 2010. It even rejected a charter school company offering $300,000 for 13 abandoned parcels back in 2005. As of April 2011, all 13 of the parcels remain vacant. Check out the video below to learn more about St. Louis' experience.
Philadelphia, already anticipating the passage of HB 1682, introduced ordinances to create a land bank that would give the district Council member authority over development. The Show-Me Institute also had a stern warning about this practice in yesterday's Philadelphia Inquirer:
One rundown St. Louis building had offers from four different buyers, all rejected by the land bank. But when the area alderman showed up at a land bank meeting and asked that it be sold to another buyer, it was.
Unfortunately, the same policy has been written into Philadelphia's land bank bill. In its current form, it would forbid the bank from entering into a transaction without the approval of the district Council member. This will almost certainly thwart development.
Who are We?
The Commonwealth Foundation is Pennsylvania's free-market think tank. The Commonwealth Foundation crafts free-market policies, convinces Pennsylvanians of their benefits, and counters attacks on liberty.