As most of you know, Wisconsin Gov. Scott Walker has been doing some amazing things with respect to public-sector unions.
Heartland President Joe Bast and I both are Wisconsinites, and most of our families still live there. So we talk about Walker’s efforts a lot. I think it’s fair to say most family members agree in principle with what he’s doing but don’t like what they perceive to be a “my way or the highway” approach.
And speaking of highways, something came up over the weekend that bothers even me.
Apparently, many of the counties in Wisconsin had reciprocal agreements with each other for sharing labor and specialized equipment. Walker apparently has “outlawed” such agreements with respect to highway constructions (although they remain in place for maintenance), requiring instead that counties contract out to the private sector. At least, that’s the way it was described to me. I suspect there are nuances here.
The Appleton Post-Crescent recently described a situation where Outagamie County (the Fox Valley, Appleton area, where Joe and I grew up) had to do some asphalt striping after a road re-build. The county doesn’t have the equipment but in the past would contract with neighboring Calumet County through the reciprocal agreement. The reciprocal agreement would have cost Outagamie $500 to $700; the lone private contractor willing to bid on the project charged $3,900.
Seems to me it’s a bad idea to mandate the use of a more-expensive option. I asked Adrian Moore, vice president of policy at Reason Foundation and an expert on state highway systems: What am I missing here?
“Yeah, this is complex,” Adrian acknowledged.
“The low cost the one county is charging is certainly not the true cost, because in government you don’t have to worry about equipment depreciation etc. So the county that owns the equipment is underpricing and thus costing its taxpayers.
“Also, with more competition and more experience, counties can get lower bids from the private sector for this.”
Great points, both.
But Adrian went further, and I think this is a good lesson for the well-intended people in the Scott Walker administration and elsewhere: “Still, mandating using the private sector is a bad idea. It would be better to have required them to do true full-cost accounting for services from whatever source and let that drive the train.”
As Reason Foundation’s work has always made abundantly clear, privatization is not the be-all and end-all of government procurement policy. The ultimate goal is to provide the services governments are supposed to provide, to provide them well, and to provide them cost-effectively. There might very well be times when equipment-sharing across counties makes more sense than contracting-out.