The soaring cost of cable TV is an example of what often happens when monopolies operate without the restraining influence of competition or regulation.
Cable operators have felt free to boost their prices. Until the spread of satellite TV, cable’s captive customers were left with two options: Take it or leave it.
Governments often operate as other monopolies do. They do little to restrain costs and they pass along higher costs to their customers, the taxpayers. When taxpayers have rebelled, the official response has been to cut services rather than find ways to cut costs.
The notion of improving efficiency by bringing competition’s influence to bear upon the government was often deemed impossible. Yet Gov. Jeb Bush has made Florida a national leader in using competitive sourcing to improve efficiency and hold down the cost of government.
Bush and the Legislature used the savings from competition to give back taxpayer dollars – more than $1 billion last year alone.
Competitive sourcing is a process to determine the most efficient and effective source (public, private or nonprofit) for providing services. The goal is to deliver better services at a lower cost by changing antiquated business practices. And it is not about “offshoring” or “privatization.”
Last spring two critical reports on recent competition efforts emerged from Florida’s inspector general and the Legislature’s Office of Program Policy Analysis and Government Accountability. The reports noted the need for a formal process for “outsourcing” and for state government to properly document its business decisions.
Gov. Bush saw the same things and seized the opportunity to standardize and improve the process. Last March he created Florida’s Center for Efficient Government to bring a transparent, accountable, consistent process to the management of state functions.
Among the center’s initial goals was the creation of a “gate process” that sets standards for initiating, reviewing and evaluating competition initiatives. The process includes guidelines to ensure fairness to state employees. For instance, they’ll be allowed to bid on providing services. If their bid is not successful, the state will make every effort to move them into other state positions or to jobs with the private provider.
Unfortunately, Bush’s efforts to bring competition to government services have met stiff resistance from public employee unions who fear competition and from their supporters in the Legislature. They’ve suggested that the center’s proposals won’t save money or will lead to service failure.
Instead of fighting competition, however, union officials ought to embrace it. It gives them an opportunity to demonstrate results and prove to taxpayers that they’re providing quality, cost-efficient services.
Frankly, what the union officials really fear isn’t that the governor’s approach will fail; rather, they fear that it will succeed and that competition will spread to other government services.
We are well beyond the experimental phase with competition. It has proved its value in Florida and elsewhere. Floridians should urge Gov. Bush to waste no time in implementing his competition efforts.
Geoffrey Segal is director of privatization and government reform at Reason Foundation.