Posted 08.19.2010
A nation of 90,000 governments
Maximizing the number of failure points
By Thomas FreyThe total number of governmental bodies in the U.S. is approaching a staggering number - 90,000. During normal economic times there is plenty of money to go around, but now every city, state, county, parish, township and special taxing district is competing for the same tax dollars that the federal government is.
Governmental entities are living, breathing organisms, each fighting for survival. With tax shortfalls cropping up in nearly every corner of the U.S. economy, most are struggling to preserve their own piece of the pie. With money declining, many are compensating with unusual policy decisions that they hope will shore up their balance sheets.
But it's not just about money issues. Along with taxing authority, each one of these governments has its own ability to create and enforce new laws, rules and regulations. Working with a limited set of tools in their toolbox, governments have resorted to using laws and regulations to solve virtually every conceivable problem. The sheer volume of laws emerging from these 90,000 rule-making bodies is truly stunning.
Abraham Lincoln once said, ""The best way to get a bad law repealed is to enforce it strictly." Similarly, the quickest way to bring America to its knees is to strictly enforce all of its laws.
Sales Tax Battles
Most of the governmental entities are funded through some form of sales tax, a system designed during an entirely different era that is now on the verge of collapse.
At the heart of current debates is a 1992 landmark ruling by the Supreme Court that determined retailers are not required to collect sales tax from shoppers unless they have a physical presence in the state where customers live. Initially, this ruling applied mainly to catalog companies and home-shopping channels on TV. But it also applied to the emerging online retail industry, giving them a distinct competitive advantage, and consumers a reason to change their buying habits.
Local retailers who have invested in their community, who send their kids to local schools and volunteer for local charities, find themselves competing with faceless online companies, most of whom have never set foot in town. The problem with current sales tax laws are that they create a disadvantage to those who are local. But here is where it gets complicated.
Readers Respond
Yes, a PPP provides a complete project that's "inherently governmental". A PPP must be initiated by a competent set of procurement documents as prepared by that govt agency that will receive the benefits of that completed project. Let govt. do what it does best in determining the longer term goals (strategy) for that govt agency & that project. THEN, let the private sector do what it does best, deliver a specified project per the procurement documents - on-time/on-budget & with no litigation. The PPP process can be a success when that agency initiates in the market place a professional procurement document.
By Carl Sherrill on 2010 09 07One cautionary note on "public/private" partnerships: If government does not facilitate all businesses equally, essentially getting out of the way whenever possible, then it establishes favorites and favors become the currency exchanged with rent seekers. The original roots of the term Fascism come from just such preferred arrangements in Mussolini's Italy. In this definition of fascism (or the modern corporatism), government trades legislative favors (barriers to entry, regulatory agencies available for capture by lobbyists, etc) in exchange for campaign contributions. In order to avoid future unpleasant entanglements between business and state, perhaps it would be important to examine the philosophical and constitutional roles to which government should be constrained. What are government's proper functions?
By Richard Stands on 2010 09 07Tom ... Excellent article! ... Along similar lines I hope to promote more "public-private partnerships" where private investors & private contractors provide complete assets to diverse public agencies. This can mean roads, bridges, water systems, fire stations, police stations, school buildings, waste management systems, etc. As well as data centers, customized software systems, emergency medical response, communications systems, child care facilities, etc. It's not unreasonable to require public officials to forecast & document/describe an accurate scope of work for any PPP initiative. "Future thinking" will be required by public officials - both elected and support staff. ... Thanks ... Carl Sherrill
By Carl Sherrill on 2010 08 19Leave a comment
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