Carol Evans

Cal-Tax Digest (ISSN 0008-0543) is published monthly, except August and December, by the California Taxpayers Association, 921 11th Street, Suite 800, Sacramento, CA 95814. Subscriptions are $96 a year ($50 for libraries). Periodicals postage paid at Sacramento, CA. POSTMASTER: Send address changes to Cal-Tax Digest, at the above address.

Unless otherwise noted, original material in Cal-Tax Digest may be reproduced, with attribution. Anyone wishing to reprint an original article or commentary is requested to first contact the editor of Cal-Tax Digest.

Opinion in this publication is that of the authors and does not necessarily reflect the views of the California Taxpayers' Association.

Cal-Tax is a nonpartisan, nonprofit corporation, founded in 1926, and dedicated to advancing economy and efficiency in government. For membership and other information, please write or call (916) 441-0490. The editor of Cal-Tax Digest also may be reached by e-mail (rwroach@caltax.org).

Readers are invited to visit Cal-Tax Online at the Internet address of http://www.caltax.org. 

Continuing Conflict over Public Monopolies
By Carol Evans

Voters showed good judgment on June 2 when they overwhelmingly defeated Proposition 224, which would have effectively banned the use of private design and engineering companies on public projects in California. Though victorious in this battle, taxpayers have little time to celebrate.

The next battle is already being waged in the California Legislature. The game is the same, to protect public monopolies. Only the players have changed. Rather than Caltrans engineers trying to avoid competition in the design and engineering of highways and bridges, this time they are public safety personnel who dislike competition.

It is remarkable, but perhaps not surprising, that as the global economy becomes more competitive and private-sector businesses manage to compete successfully in this economy, California public employee unions want to insulate themselves from competition by creating public monopolies. From the taxpayer perspective, public monopolies can lead to higher costs and lower quality of service. From the economic perspective, such public monopolies undercut the competitiveness of the state's economy. To the extent we spend more than necessary for prisons and jails, other important programs, such as education, receive less.

California's competitive economic position is enhanced by a smaller, leaner public sector that provides high-quality, essential services. Policy makers need management flexibility. Senate Constitutional Amendment 30, authored by Senator Bill Lockyer and pending in the Senate at this writing, moves 180 degrees in the wrong direction.

As the rest of the world moves more and more toward competition and flexibility in both the public and private sectors, SCA 30 would take those attributes away from California's public managers and place them at a disadvantage. Public managers need these elements of competition and flexibility to deliver efficient and high-quality services just as much as private managers. Should we expect less of public managers? The policy behind SCA 30 is damaging. For a state that prides itself for innovation, SCA 30 is the management equivalent of continuing to manufacture buggy whips.

Published last year, "Cutting Local Government Costs Through Competition and Privatization," a collaborative effort of the California Chamber of Commerce, Howard Jarvis Taxpayers Association, Reason Public Policy Institute (RPPI) and Cal-Tax highlights competition opportunities and best practices for local governments. According to the study, to meet ever-growing citizen demands for greater public safety, some California jurisdictions are experimenting with creative public-private partnerships for these services. The city of San Diego, for example, realized more than $1.5 million worth of man-hours by using more than 800 volunteers in its police department. The volunteers, many of them senior citizens, enabled San Diego to add several new policing services and emerged as an important component of the city's community policing program.

A 1998 RPPI publication, "Private Prisons: Quality Corrections at a Lower Cost," illustrates how privately operated prisons offer quality services, significant cost savings, and increased accountability to taxpayers and governments. The report also found lower rates of recidivism, fewer attacks on prison guards and inmates, and better education and health care programs in private correctional facilities.

These advances are diminished if public employee unions succeed in convincing policy makers and voters that public monopolies deserve protection.

- Carol Evans is vice president of the California Taxpayers' Association.