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Gov. Napolitano's new role model - Judge Roy Bean February 20, 2008 |
A relatively
new concept in financing local government
is something called “the enterprise fund.”
Under this method, various branches of local government are budgeted to be paid for by the revenue they collect. Fees and other charges are supposed to cover the costs the respective departments incur for whatever services they provide. Building codes by permits and impact fees, most parks and recreation programs by charges for specific programs, many court programs by similar fees, etc. Administrative costs for support services can also be placed in the cost of the fees. This concept was ballyhooed as just one more way “you could run government like a business.” Whenever you hear that claim, hold onto your wallet. It is either being made by a bureaucrat who knows better or a politician who doesn’t. For a variety of structural reasons, you cannot and will never “run government like a business.” All you will do is increase its power and revenue. A superb example is Pima County’s Department of Developmental Services. While building permits were steadily declining, those in charge hired more people. A private business with that little foresight would either fold or immediately change direction. Pima County’s response was to increase revenue by determining that inspection processes it had ignored for years were suddenly relevant and all those building inspectors who now had nothing really important to do would be sent out to grab enough fines and fees to pay themselves and others. This illustrates exactly why you cannot run government like a business. That’s because government has options that business doesn’t. It was once conceded by those touting enterprise funds that many areas of government weren’t really adaptable to it. How would you fund the police, for example? Governor Napolitano apparently has the answer. By increasing highway traffic fines enough to pay the cops who write the tickets through more aggressively enforcing the traffic laws with cameras everywhere. Not, we observe, to increase public safety (although this may be a by-product) but to increase revenue. This also helps fund all the political barnacles on the hull of highway safety and other court functions with traffic and other fines now containing “surcharges” to fund totally unrelated items of state government. The worst example is the 10 percent added to all fines for the “clean elections” campaign fund for political campaigns and the fund’s bureaucracy. Both the governor and the wonks promoting enterprise funds don’t have an original idea. Once when government was small and taxes were light, something similar was done. Judge Roy Bean and most of his contemporaries didn’t draw a salary — they got a piece of the fines. Bat and Wyatt patrolled the streets of Dodge and Tombstone usually for a percentage of whatever the judge fined the cowboy they whacked over the head. It was the prototype for what Pima County’s building codes is using now — and what the governor proposes. It had one advantage. No taxes were involved. But as these enterprise funds have expanded charging more and more for different fees and fines, taxes have continued to rise. Many of us would have no problem running government on a fee for service basis in principle, but whenever government tries that there’s a whole lot of uncovered expenses for things totally unrelated to the fee. There is also no real comparison to make to determine if the fee is realistic except the standard cop-out all governments use of comparing it to another government, a clever ploy used for years to justify a rotating series of pay raises for folks like city managers everywhere. Those who wish to get a handle on taxes need to understand that replacing them with various fees won’t resolve the problem until those we elect begin to grasp the real way governments work. Lesson one is that they cannot be run like a business.
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BUT WATCH WHAT YOU SAY! |
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