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For
the second straight year, Del. Ben Cline,
R-Rockbridge, a
member of the House Cost Cutting Caucus, has carried
legislation that would radically change the way
the Commonwealth operates.
HB 2556, the “Freedom from Government
Competition Act” breezed through the House,
passing out by an overwhelmingly bi-partisan vote
of 94-2.
The
bill is simple. It requires state agencies to provide
written rationale for providing truly commercial
activities in-house with state employees. Things like mowing lawns on state grounds,
or changing oil in the state’s fleet of cars and
trucks—these and more are found on the state’s
“commercial activities list.”
More
specifically, this reasonable bill requires the
creation of regulations that force state agencies,
excluding two- and four-year public institutions
of higher education, to use commercial sources for
goods and services unless the agency provides a
compelling reason not to do so. Agencies that have been producing
commercial activities finally will have to justify
continuing the practice.
If nothing else, the Commonwealth will know
once and for all just how efficient many of their
activities really are.
If
the private sector can provide these services less
expensively than the state, then it only makes
sense that the private sector should do so.
Not to move in this direction is a
disservice to the taxpayers and to hundreds of
businesses that could offer these services to
state government.
Although
Del. Cline deserves a great deal of credit for his
forward thinking and commitment to reform, his
initiatives are nothing new. In fact, President
Eisenhower issued Bureau of the Budget Bulletin
55-4 in 1955 declaring that “(I)t is the policy
of the Government of the United
States
to rely on commercial sources to supply the
products and services the government needs. The
Government shall not start or carry on any
activity to provide a commercial product or
service if the product or service can be procured
more economically from a commercial source."
This
policy has been upheld and adopted by every
succeeding federal administration of both parties.
Unfortunately, the Commonwealth has not
adopted Cline's bill. Last year, Gov. Warner quickly vetoed the
bill. This
year, despite
breezing through the House, and the passage (12-3)
of an equally good substitute in the Senate
General Laws Committee, HB 2556 has been left in
the Senate Finance Committee to die.
Why
was this bill good enough last year for the Senate
Finance Committee and, yet this year, it allowed
it to die on the vine?
Perhaps,
what’s most distressing is the fiscal impact
statement that traveled with the bill
noted
the potential to incur “substantial” costs
as agencies conducted comparisons of in-house
costs against commercial costs. Certainly, there are costs associated with
implementing this bill. However, the fiscal impact analysis is
static and assumes that this is an exercise in
futility i.e., status quo is always the most
efficient and/or effective way to deliver
services. It
assumes that savings would never be identified. This is like Domino’s deciding not
revolutionize the pizza delivery business because
it would cost money in gas and salaries—never
mind that it led to increased sales.
In
addition, the fiscal impact statement fails to
take into account any offsetting revenues that
would be generated, including taxes paid on
contracts for commercial goods and services.
In
the era of structural government reform few have
more potential than Del. Cline’s bill.
It has gained bi-partisan support for two
consecutive years in the House and once in the
Senate. Unfortunately
HB 2556 failed to gain passage this year—even
though it is unclear whether it would have faced
another veto from Gov. Warner.
Gov.
Warner could send a loud and clear message that he
is deeply serious about long-term structural
reform if he would either sign an executive order
that would accomplish the same goals as Del. Cline’s bill, or send an amendment to the
General Assembly making Cline’s idea state law
that can be voted on when the legislature
reconvenes on April 6th.
Otherwise we’ll have to wait until next
year when Del. Cline will likely return and
introduce yet another version. And then we will hopefully have a new
governor who will actively weigh in to support
this “good government” effort.
--
February 28, 2005
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