Privatization Key To Government Efficiency and Better Service, Better Price
New Study from Kansas Policy Institute Shows Tax Reform Possible Through Well-Implemented Reforms
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January 25, 2013 - Wichita - As the 2013 Legislature begins its work the discussion remains focused on implementing last year's tax reform package. A new study from Kansas Policy Institute makes clear a good deal of the dollars necessary to implement reform without raising taxes, an 8.5 percent efficiency savings, can be achieved via a slate of reforms commonly referred to as privatization. "Better Service, Better Price," goes through best practices and case studies to arrive at standard cost savings of between five and 20 percent - a good step toward realizing the benefits of HB 2117.
"Too often we're faced with the false choice of either higher taxes or fewer government services," said KPI president Dave Trabert. "This paper makes clear that governments at all levels and around the country are refusing that false choice and taking steps to deliver essential services at a better price with better outcomes."
Privatization reforms include contracting, franchising, and outright divesture of government-owned assets or functions. Examples from around the country demonstrated 130 different outsourcing initiatives in Florida saving $500 million in cash-flow dollars and 345 opportunities for public-private partnerships in the City of Tulsa. The study also highlights existing efforts in Kansas such as the City of Wichita saving $1.3 million annually by outsourcing mowing operations, beginning in 2009, and Kansas State University allowing its on-campus bookstore to be operated by Varney's, a private entity and previous competitor.
In addition to case studies and establishing the vocabulary of privatization, a good deal of discussion is provided to best practices. Transparency in contracting and purchasing, truly competitive and open bidding, and quality-driven outcomes help protect taxpayer interests when government dollars go to private entities.
"Privatization and public-private partnerships are proven policy tools used by policymakers of all political stripes to control spending and improve public services - something that is more critical than ever given the fiscal challenges that many states and local governments continue to face in the wake of the 2008 recession," said the study's lead author Leonard Gilroy, the director of government reform at the Reason Foundation. "It is our hope that this new report will help state and local officials in Kansas better understand the range of potential privatization opportunities at their disposal to help navigate the 'new normal' of budget constraints and lower the costs of government to taxpayers."
Trabert concluded by saying, "With Kansas' general fund spending having increased by 48 percent in the past decade there are absolutely opportunities for efficiency and savings. In many cases, this could certainly be accomplished by utilizing private sector expertise while at the same time delivering better service to Kansans."
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Kansas Policy Institute is an independent think-tank that advocates for free market solutions and the protection of personal freedom for all Kansans. Our work centers on state and local economic policy with primary emphasis on education, fiscal policy and health care. We empower citizens, legislators and other government officials with objective research and creative ideas to promote a low-tax, pro-growth environment that preserves the ability of governments to provide high quality services. To speak with Kansas Policy Institute, please contact James Franko at (316) 634-0218.
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