TUPPER: Run government like a business? Please don’tPoliticians love clichés, and lately a lot of them are in love with this one: “Government should be run like a business.”
By: Seth Tupper, The Daily Republic
Politicians love clichés, and lately a lot of them are in love with this one: “Government should be run like a business.”
I’ve heard it in local and statewide campaigns recently, and it irritates me a little more every time I hear it.
Government should not be run like a business. Why? Let’s take a look at Mitchell’s city government as examples.
If the city of Mitchell were run like a business, I suspect its leaders would:
• Demolish the Corn Palace. In 2010, for example, the Corn Palace had revenue of $1.074 million and expenses of $1.711 million. The city had to cover the shortfall with money from the general fund and from the so-called “third penny” sales tax on hotel rooms, prepared food and alcoholic beverages. And that wasn’t an atypical year. The Corn Palace regularly “loses” money. If we were operating the city like a business, we would never allow an aspect of our business to bleed money every year. We’d try to make it profitable, but after a while, we’d cut our losses and rid ourselves of the problem.
• Increase taxes and fees. Good businesses are always looking for ways to increase their revenue, and since Mitchell’s city government gets 79 percent of its revenue from taxes and charges for goods and services, it stands to reason that a business-like government would look for ways to beef up that income. Likely targets for increased rates would include water and sewer service, since the city has a monopoly on those services and taxpayers can’t turn elsewhere.
• Quadruple the mayor’s salary. If we truly want to run our city government like a business, we’ll have to pay our chief executive competitively. He currently makes $23,484 a year to run a “business” with about 180 employees and a budget of roughly $30 million. CEOs of comparably sized companies are making salaries in the six-figure range, which means we would need to pony up a big raise.
Those are just a few ideas that seem wholly in line with the idea of operating city government like a business. So, if government and business are so similar, why haven’t we done all of these things? It’s because a government is not a business and a business is not a government. They’re two distinctly different entities.
Think about this: If governments are really so similar to businesses, the cliché should also work in reverse, shouldn’t it? Yet I’ll bet you’ve never heard any successful businessperson say “businesses should be run like the government.”
Sure, there’s some value in governments emulating aspects of the private sector. We’d all like bureaucrats to be as careful with taxpayer dollars as good business accountants are with a company’s money. It would also be nice if bureaucrats treated their citizens like a good business treats its customers.
But clichés can take on dangerous meanings when they grow too popular. In our day and age, the saying “government should be run like a business” has come to mean government should automatically cut any program that doesn’t pay for itself.
And that’s where the cliché goes wrong. Just because a government service or facility doesn’t pay for itself or generate a profit, that doesn’t necessarily mean the government should walk away from it. In fact, that’s precisely one of the reasons government exists: to do the necessary and desired things for its citizens that the private sector, because of its profit motives, cannot or will not do.
No private business would build and maintain a corn-covered arena in Mitchell. No private business would provide 24-7 security patrols and fire protection for all of the city’s residents. And no private business would build and maintain a system of roads for all drivers to use.
When you think about it, government should actually be run more like an effective nonprofit than a business. A good nonprofit stretches its available resources as far as it effectively can to provide the best service possible to its clients, without trying to reap a big financial reward.
I don’t know about you but, given the choice, I’d rather have a “nonprofit” government that efficiently uses my tax dollars to serve my needs, rather than a “business” government that is always trying to make a buck off me.
Admittedly, the phrase “government should be run like a nonprofit” isn’t nearly as likely to energize voters as the old cliché “government should be run like a business,” but that’s exactly my point.
Good clichés often make bad policies.