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Another Option: Going Beyond Tax Hikes and Budget Cuts
 

Background

One of the most contentious battles that regularly rears its head throughout our country is whether to satisfy budget constraints by raising taxes or by cutting government programs. It is a common theme in national politics, even though the Federal government routinely carries forward a budget deficit, regardless of how much taxes it raises and how much spending it cuts. It spawns an equally heated battle in statehouses and local governments each year, particularly among those which have mandates for a balanced budget. One side of the political divide is commonly accused of being willing to profligately tax and spend without restraint, while the other side is painted as being willing to heartlessly slash budgets for programs on which its citizens rely.

The need for an alternative is especially pertinent in the context of recent years, as spending has continued to climb, while tax revenues have continued to be cut. The budget deficit has increased to gargantuan proportions, and there is plenty of room for solutions beyond simply tax hikes and budget cuts.

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Ideas / Solutions

There is a third alternative, which would be much less painful than either, much less contentious for both sides of the debate, and still very impactful toward comprehensive deficit reduction. Although it is not a complete solution by itself, it can be a major component toward reaching balanced budgets.

Operating government with business principles can, where appropriate, provide a win-win situation. Federal, state, and local governments have countless assets, and many of them are not often viewed in terms of their potential to raise money. This absolutely does not mean that Federal lands or the trees on those lands should be sold off to private owners, and there are some assets, such as personal data about citizens and enriched plutonium, that are certainly not to be shared beyond the government. But, there are many ways in which the government does not fully exploit the commercial value of property, buildings, and services within its control. Governments could do so in ways that do not impair those assets, minimize their utility and value in serving the needs of their constituents, nor otherwise compromise their public function.

Also, too frequently, even when a government does monetize its assets, it does so at below-market rates which gives a windfall to the recipient, while missing an opportunity to ease governmental budgetary straits. This can be tantamount to a gift of public resources, which is especially offensive when vital services and programs are suffering. Governments should command market rates for their goods and services which they make available in the marketplace.

Examples of opportunities to raise funds in this way, by charging full-scale market-rate fees, are plentiful for most governments, including:

  • renting space for cellular providers to place cell towers atop government buildings, which also benefits local residents by improving cellular service;
  • renting billboard or wallscape space atop, or alongside, appropriately chosen government-owned buildings and other structures, as long as the content of the ads meet criteria in terms of their message, and pose no conflict of interest with the activities engaged in that building (e.g., an auto insurer could not advertise at a Department of Motor Vehicles [DMV] building);

  • allowing the technology companies whose software applications are used in government websites to discreetly place their company logo at the bottom of such websites for a small fee, since it showcases their product, or, for a higher fee, placing a link to the company's own website;

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  • selling advertising space in selected government publications, e.g., training manuals, conference programs, state and Federal parks maps, brochures;

  • crafting a government seal of approval, for example, for high performance on the Corporate Responsibility Scorecard (that is discussed in another chapter), and charging qualifying companies a fee for the endorsement;

  • for local governments that develop a website consolidating information about local services, recreation, businesses, arts, entertainment, and culture (i.e., not just governmental information), collecting revenues from ad sales and "click throughs" to commercial websites;

  • selling services to other jurisdictions, such as onsite inspection services (in the case of services which are beyond the usual jurisdiction of the governmental unit selling the services), use of specified strands of fiber optic lines in telecommunications networks, data processing and storage, and other technology services during off-peak hours (since data centers are expensive to build and expand, and often have specializations and over-capacity which other governments cannot afford), since the buyer-government would outsource their needs anyway;

  • selling publicly valuable, non-personal data to companies that need it for their own research or websites, e.g., real-time traffic data to traffic-watch websites, land and toxic site data to developers and environmental contractors, and generalized health care usage data to health plans and researchers which do not compromise any individual rights to privacy;

  • renting space at certain facilities to commercial businesses, such as a Starbucks at a courthouse or building permits office where people typically have to wait for service, or even a Jiffy Lube in a DMV parking lot, where people can get an oil change while waiting to register their car;

                                             


  • profiting from technology transfer licensing fees, particularly those resulting from technologies that result from Federally funded R&D efforts in alternative energies such as biofuels and pharmaceutical development, which improve the social fabric and quality of life within the nation at the same time;
  • reforming immigration laws to enable more people to come to the US on H1B and other visas, obtain green cards, and eventually become citizens, since each additional employed person adds to the tax base, and each grant of status could carry an additional one-time fee that would further generate revenue; and

  • for the truly adventurous government that runs toll booths on a bridge or highway which is plagued by bumper-to-bumper traffic at rush hour, designating a couple booths at one end for the drive-through sale of coffee at much higher than market price (the price for convenience!).

Implementation of some of these is sure to be easier than others, and some would require navigation around the concerns of interest groups such as government employee labor unions. But the case is strong for exploring many of these, as well as other untapped revenue sources particular to each level of government. By selling these rights, goods, and services, a government can raise revenues from new sources, mitigating the need for tax hikes and budget cuts.

 
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