VACostCutting

Sunday, January 22, 2006

Freedom from Government Competition

Delegate Cline's HB1122 is simple, yet promising. It requires state agencies to provide written rationale for providing truly commercial activities in-house with state employees. Things like mowing lawns on state grounds, or changing oil in the state’s fleet of cars and trucks—these and more are found on the state’s “commercial activities list.”

While Del. Cline deserves the credit for bringing this to the Commonwealth, the real credit goes to President Eisenhower. In 1955 he issued Bureau of the Budget Bulletin 55-4 (the equilavent of the modern day OMB Circular) declaring that:

“(I)t is the policy of the Government of the United States to rely on commercial sources to supply the products and services the government needs. The Government shall not start or carry on any activity to provide a commercial product or service if the product or service can be procured more economically from a commercial source."

The 1999 inventory of government functions found more than 37,500 state employees performing services readily available in the private sector. A Feb 2005 Thomas Jefferson Institute study highlighted this and the potential savings - they're big (jump to page 10 and 11 for details). Its true, many of the things government does is also done in the private sector - many times in direct competition. If nothing else, contracting out basic commerical activities could be seen as a small and/or minority business growth opportunity.

Delegate Cline has submitted this bill several times - see my article in Bacon's Rebellion for a more detailed conversation.

Oh, and don't forget that private companies pay taxes on their income - so while savings are important, so would the enhanced economic activity and revenue.

5 Comments:

  • Great Bill

    Delegate Cline is a rising star in VA politics

    By Blogger too conservative, at 1/23/2006 3:47 PM  

  • It will never happen. Too many people would have to give up power.

    By Anonymous Uncle Lester, at 1/23/2006 5:35 PM  

  • It would given power to alot of people as well, so it may pass.

    By Blogger GOPHokie, at 1/23/2006 6:37 PM  

  • If it passes, the decision making is still left up to the agencies. I can assure you that these agencies are not going to want to give up their power and influence. And it would only be around the edges anyway. If you truly want reform, have a third party study and then act on the findings. The findings may be harsh cuts or consolidations and I really don't think anybody including the General Assembly has the stomach or gonads for it.

    By Anonymous Anonymous, at 1/23/2006 10:29 PM  

  • While they haven't been fully highlighted here, Delegate Saxman has two bills that would give some power to independent analysis and recommendations - see HB1295 and HB1297 (in subcommittee today).

    The biggest impact is, however, for the first time agencies will have to justify, in writing, not privatizing something. This is a sea change - it changes the presumption away from public operation for the first time.

    By Blogger gfsegal, at 1/24/2006 9:10 AM  

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