New Paradox The Entrepreneurial Government Bureaucrat
Written by Michael Lewis on October 9, 2008
By Michael Lewis
Necessity is creating a strange new hybrid. Not hybrid gas-electric cars on the road, but hybrid bureaucrat-entrepreneurs in government.
Not many yet populate city and county halls, any more than gas-electric cars yet flow bumper-to-bumper on highways.
But as tax receipts tighten, some officials are peering beyond normal fees to fill gaps.
It eclipses the common lease or sale of public sites to private operators, which usually benefits firms over taxpayers.
Miami has been particularly inept in that, handing city properties to insiders at favorable terms. Even today, the mayor’s business partners lease a waterfront restaurant site near city hall where taxpayers were once cheated out of more than $1 million.
The city has frequently leased land to enterprises that fail to pay. Most recently, now-closed SkyLift Balloon raped the fountain in Bayfront Park.
County government has lost millions dealing with developers at Metrorail stations, a good idea gone awry.
Taxpayers have never collected a penny on a pact to build the Miami Heat’s arena on public land. The list goes on.
To be fair, businesspeople, not government, initiated many of those deals. And the aim wasn’t public revenue but, for whatever reason, to aid the business.
The new dealmaking, however, looks in creative ways to recoup government costs.
Governments are moving rapidly to lease or sell every amenity from Midway Airport in Chicago to the Chicago Skyway, Indiana Toll Road and soon, perhaps, Alligator Alley along I-75 in Florida. The idea is to keep serving the public yet reap income from investors to pay government debt.
We can debate these deals and more in the pipeline. But they do represent new efforts to let business provide services that government once funded and to pay the public for the privilege.
The most innovative way to recoup city spending has just surfaced in Coral Gables, where trolley cars — colorful buses with wooden benches, paneled interiors and etched windows — are being leased after working hours for marketing campaigns and, to quote the city, "weddings, corporate parties, meetings, sporting events, or any other reunion that requires the transportation of a large amount of passengers."
The city will get a minimum of $700 for the first four hours. Now, that’s a clever way to use idle city buses to turn a profit for the public.
Those Gables buses are pristine and quaint. We wouldn’t do as well renting out idle Miami-Dade Transit or school buses. Who’d want them?
But could public facilities rentals expand profitably? The county already rents out Villa Vizcaya. And Venetian Pool in Coral Gables was once the most reasonable party site around. Should we raise rental rates for facilities?
Or for people? Governments for years have provided off-duty police to events, but much of the fee goes to the officers. Should fees rise to benefit taxpayers?
Another opportunity: stop giving away police, fire and parks services to any non-profit that holds events. While rates may or may not be too low now, they should seldom be zero.
This week, the Miami-Dade County Commission was to vote on requests to give services free to 16 events that had taken place as long ago as last October. The giveaway totals $38,056.
It happens at every level. The Miami City Commission two weeks ago waived $6,590 for a Haitian national soccer team scrimmage.
No doubt the public benefits from private events. But many organizers could well pay for special services they’ve used, because these aren’t the normal jobs of police and parks personnel.
The Wings Over Miami air show held in March, for example, is now seeking $9,456 in county service free. Miami Children’s Hospital, the American Diabetes Association, Alonzo Mourning Charities and Udonis Haslem Children’s Foundation — the latter two from high-paid basketball stars — are in line, too.
The giveaways are puny by standards of governments that want to hand a half-billion dollars to the owners of a baseball team. But the money doesn’t belong to commissioners who routinely fund supplicants — it belongs to taxpayers.
And it’s costing double to give services away. A single gift of $1,616 in services this week required 12 pages of county forms, with six officials — including County Manager George Burgess — signing off or providing information. The paperwork cost more than the $1,616 giveaway.
A money-raising query: shouldn’t those who seek services beyond the bounds of what government would give others also pay for them?
To those who say no, recall this: when one of this nation’s highest-income island enclaves was being built, the City of Miami gave it a $1 million-plus in-kind gift.
Fisher Island’s developers fenced off city-owned waterfront as a mainland dock and parking area for construction work, with fees agreed upon. But the developers never paid, and the city decided it wasn’t vital to bill them for a paltry million.
So it’s good to see governments now taking tentative steps to recoup public investment in property, goods and services. It runs counter to historic giveaways.
It’s unexpected, not only because of that history but because we don’t elect commissioners and mayors for entrepreneurial abilities, and governments don’t hire staffers because of theirs. The change is born not of propensity but of necessity.
How entrepreneurial should governments be? That’s a new public policy question. How much thinking like business is good public business?
An even bigger question follows: How much of entrepreneurialism in government will increase services or lower taxes?
The worst possible result would be that the new revenues just enlarge bureaucracies or fund massive spending for questionable projects. Either of those outcomes would wipe out all benefit of this new phenomenon of the entrepreneurial bureaucrat.