One thing that would help with public employees is to drastically reduce their number. Do that by contracting out every possible government service.
Yeah, police probably have to be public employees, but most of the other jobs can be outsourced to private companies. And often are around the country.
Many advantages:
1. It can be done for less cost. The evidence is overwhelming.
2. Contracting out would gut the public employee labor union monopoly, which usually is the most powerful force in electing their city and county bosses!
3. Contracting out makes it easier to dismiss both individual misfits and entire “departments” for performing below standards.
4. Contracting out would largely eliminate the bane of taxpayers — unfunded pension, workers’ comp, disability and retiree healthcare liabilities.
It’s a win-win-win-win approach — unless you are a “public servant.”
Privatization of Government Programs Benefits the Economy
Comments 9
Amen.
The City labor unions have successfully stone-walled any attempt at managed competition from private contractors. It takes a year to bid on services and another year to get the contract awarded. In addition, the “rules” are heavily weighted in favor of the City employees. What sane company wants to deal with this nightmare?
http://www.utsandiego.com/news/2013/dec/14/san-diego-managed-competition-faulconer/2/?#article-copy
If the Mayor is serious about saving money and getting better services, he needs to make a serious cut to the red tape and make it viable for companies to bid on City services. Otherwise San Diego will remain “Enron By the Sea”.
Certainly I am not the only one to see the irony in the use of the term “Enron by the sea” in a positive response to turn over government services to private companies?
bill@thecounty,
Unfortunately, most here won’t even understand your point.
Indianapolis, Phoenix, Charlotte, Tulsa, the State of Florida, and irony of ironies, even Chicago have successfully implemented managed competition but not the City of San Diego. What would you call it Bill?
I find it disgusting that the City of San Diego employees have subverted the will of the people by throwing monkey wrenches into managed competition. Seems like Enron to me.
It’s not about turning over government services to private companies. It’s about saving the taxpayers hard earned money and getting more and better services. It will never happen if it’s business as usual at the City of San Diego
Victor Calderon might understand Bill’s point.
Barry,
Now, I am the one who doesn’t understand the reference. Who is Victor Calderon?
Enron made it’s illicit fortune from the SOVIETIZATION of CA power, not competitive privatization. It was a case study in how NOT to privatize.
The fundamental assumption that we “deregulated” the California electricity market is totally false. Even the politicians called it a “restructuring” of the market.
This plan was imposed by the central planning mentality of state Senator Steve Peace, Governor Pete Wilson and the California legislature. Consider:
1. The ONLY legal place to buy and sell electricity was a building set up by the California government — a mandated, monopoly “exchange.”
2. No long term electricity contracts were allowed!! Only spot pricing was allowed. This insane law works fine when there is excess capacity, but is a disaster when demand catches up with capacity. No free market has this restriction on contracting. It was THIS rule more than anything else that caused the problems.
3. The government-mandated method of handling the bidding for spot market prices was equally insane. The contracts were per hour. In a given hour maybe 50 contracts were made (like a commodity pit in the Chicago exchange). But the government required that ALL contracts for that hour be reset to the HIGHEST price sold of any contract. So one rigged contract which actually lost the buyer money resulted in the other 49 contracts being overpriced — sometimes VASTLY overpriced. Only government can establish such an idiotic system which encourages such abuse.
4. Banning long term contracting (which would have provided an assured price that would have encouraged capital investment), coupled with the state’s long term opposition to new or expanded power plants, assured that there was little incentive for more power plant capacity to come online.
Deregulation DOES work, and HAS worked. But what we had in California was NOT deregulation — far from it. See the article below on how electricity deregulation does work when properly implemented.
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RICHARD RIDER NOTE: This is the most important article I’ve seen on this whole electricity mess. The fundamental position of most of the politicians and the media is that the electricity disaster proves that deregulation doesn’t work. A secondary maxim is that greedy power/utility companies are the cause of the problem.
But this article shows that REAL deregulation DOES work — in this instance it worked in Pennsylvania. A similar story could be told about the Texas deregulation process. Even though each was imperfect (the WORLD is imperfect), deregulation worked. In contrast, the California plan was anything BUT deregulation, and failed in a spectacular manner.
This story leaves the conspiracy nuts in a lurch, trying to explain why
Western power companies are greedy but apparently Eastern companies are not. Of course, the answer is that the EASTERN companies face stiff competition, which keeps the prices down in spite of the wishes of the sellers, while Western companies have seen their competition restricted, creating a shortage imposed by the very government that supposedly protects us from the free market.
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SAN DIEGO UNION-TRIBUNE
INSIGHTS section
Unplugged — Pennsylvania’s experience
By Nora Mead Brownell
January 28, 2001
The eyes of the nation are riveted on California as it struggles to cope
with the effects of its extraordinary energy crisis. While our hearts go out to California’s citizens as they contend with the threat of rolling
blackouts and uncertain future supplies, the key questions being asked throughout the nation are these: Was deregulation the cause? Is deregulation a formula for disaster?
Based on our experience in Pennsylvania, by all accounts the most
competitive electric market in the United States, the answer is a resounding no. In Pennsylvania, which was one of the first states to enact deregulation after California, the new system continues to generate substantial savings for the state’s economy with none of the supply shortages being experienced in California.
In the interest of full disclosure, I am an unabashed believer in free
markets. Free markets bring innovation and efficiency that monopolies never have and never will. Here in Pennsylvania, while we transition ourselves to a fully functioning electric market, we are beginning to see these benefits manifest themselves in jobs, investment in technology, and new generation.
The Pennsylvania model is based on five fundamental principles: everyone must benefit, markets are fragile and must be nurtured over time; demand and capacity must be kept in balance, the independent service operator (ISO) must be truly independent; and market transparency is essential.
Guided by these principles, competition is alive and well in the Keystone State:
More than 560,000 customers are purchasing their energy from a competitive supplier.
In some service territories, over 30 percent of the residential customers are being served by competitive entities.
Customers across Pennsylvania have saved nearly $3 billion since the inception of electric choice in 1997.
Over 20,000 megawatts of new generation is expected to come on line in the next five years.
Finally, through Pennsylvania’s careful implementation of electric choice, an estimated 36,000 new energy jobs will be created.
These positive developments did not happen by accident. They resulted from carefully crafted legislation, effective implementation., and a fundamental belief that the free marketplace creates more opportunities for customers and business than any government agency. Four factors were key to success: sufficient generation capacity, collaboration among all parties, consumer empowerment, and business planning.
Generation: As Pennsylvania founding father Benjamin Franklin penned, in “Poor Richard’s Almanac:” “an empty bag does not stand.” While I know that Franklin dabbled in electricity, I doubt he was talking about the electric market. But he could have been. Absent sufficient generation to meet customers’ needs, the wholesale price of electricity will increase. Even the best regulator cannot overturn the economic principle of supply and demand.
In my state, new generation is expected to increase by 20,000 MW or 20 percent, over the next five years, while demand is expected to increase 5 percent. Pennsylvania was, is and will remain a net exporter of power. Obviously, when you restructure the electric market, it is much easier when you have sufficient capacity and can attract new capacity.
Collaboration: Get everyone involved. That was the directive that Gov. Tom Ridge gave to the Public Utility Commission, which was charged with the responsibility to write and implement our electric restructuring model. This included the Consumer Advocate, representatives from small and big business, the environmental community, suppliers, generators, utilities, and labor.
This collaborative process was not only successful in drafting the
legislation and working through the morass of restructuring fillings but
also these groups were helpful in educating the public about electric
choice. Even more important, the group helped ensure that all the pieces fit together — working together on how data is transferred back and forth between electric distribution companies and suppliers and on how to educate customers to shop for a utility supplier. Everyone understood that the sum of the parts had to equal the whole.
Consumer empowerment: One of the keys to Pennsylvania success was a strong consumer education program. Not only did we run an effective mass media campaign at the statewide level, but also we used surrogates to help us in our local education efforts. The results were and remain impressive, a 95 percent awareness and understanding about how to shop for electricity. Of the more than half-million customers who shopped for a new supplier, Pennsylvania’s program was able meet unique customer demands for those with environmental concerns. More than 80,000 customers have selected “green” power, bringing new investment to the state in the form of wind farms.
Business planning: The whole theme of the Pennsylvania utility restructuring program can be summed up in one word: choice. To create a truly free market you cannot dictate. You can and should nurture the opening of the market but directing how incumbents manage themselves is a grievous error. The opening of the electric market represents not only choice for customers but also choice for the incumbent utilities, particularly in regards to how they want
to manage their generation assets and how they manage their market. In Pennsylvania, some companies made the business decision to sell their assets while others decided to retain their assets. Customers in either case remain protected by rate caps that in some instances extend to the end of the decade.
Next winter the competitive transition charge (CTC) imposed on the customers of Duquense Light Company that serves Pittsburgh will be eliminated, similar to what customers in San Diego experienced last spring. But unlike San Diego, the residents of Pittsburgh will see their rates go down 21 percent.
Coincident with the elimination of the CTC, the “price to compare” will
increase about a penny per kilowatt-hour, giving more opportunities for competitive entities to beat the price charged by the incumbent utility. In addition, rates for customers who choose not to shop or wish to return to their incumbent utility will be capped until the end of 2004, thus protecting non-shopping customers from the vagaries of the marketplace. This scenario will unfold because the incumbent utility made the business decision to divest itself of its generation assets and then enter into a long-term contract for energy from the company acquiring their assets. From what I understand, such a scenario was not permissible under the California model.
There are many differences between California and Pennsylvania market models and market conditions. The point is that competitive models should and do work. While our collective goal must be to help solve the California situation, it is equally important to look at lessons learned in Pennsylvania, Texas and other states that opened their markets without disastrous results.
The solution is not to abandon deregulation, but to make it work for
everyone.
Brownell is a member of the Pennsylvania Public Utility Commission and president of the National Association of Regulatory Utility Commissioners.
Copyright 2001 Union-Tribune Publishing Co.
http://legacy.utsandiego.com/uniontrib/20051106/news_lz1n06audit.html