To become more effective, government officials need to stop their expansionist thinking ("What additional services can we provide?") and concentrate instead on providing essential services more efficiently.
So said Indianapolis Mayor Stephen Goldsmith, who spoke to a gathering of local government leaders at a Salt Lake breakfast meeting Monday.The way to make almost any municipal service more cost-effective, Goldsmith said, is to subject it to competitive bidding - privatization. Natural marketplace competition will always lower prices and increase service quality better than government bureaucracy.
Those cities who insist on thinking along expansionist lines are doomed to "tax themselves into poverty" as businesses flee to cities with less onerous tax burdens, he said.
Goldsmith's office is on the 25th floor of a downtown Indianapolis office building. When he first became mayor, "on a very clear day I could actually see dollar bills floating across the city line," he said.
Since then, through privatizing 75 of Indianapolis' approximately 200 government services, Goldsmith said he has slashed the city budget by $400 million.
"What he has accomplished in such a short time in Indianapolis is amazing," said David Salisbury, president of the Sutherland Institute, a Murray-based think tank. "We hope his example and expertise will provide some direction for the decisionmakers in our state."
The Sutherland Institute sponsored Goldsmith's visit to Utah. He was scheduled to talk to state legislators later in the day.
Goldsmith said many governments have gone far afield of their reason for being.
"The role of (municipal) government is to maintain the roads and make sure you get to work or church without getting beaten up," he said. Other more peripheral functions like hospitals, water companies, electric utilities, libraries and museums should be subjected to competitive bidding.
Nevertheless, while privatization is good in theory, it doesn't always work in practice - in Goldsmith's words, it is not a panacea. Take the Salt Lake City School District, which recently conducted an ill-fated experiment in privatizing its busing system but wound up bringing it back in-house.
Goldsmith said public entities can avoid such fiascos through wise contract management and quality control. As an example, he used Indianapolis' privatization of its lawn maintenance. The city initially required the contractor to cut lawns once a month, resulting in workers cutting the grass unnecessarily during the dry season, when it grew slowly, and not enough during the wet season, when it grew quickly.
The problem was solved by changing the requirement to not letting the grass grow more than an inch before cutting.