A recently released study by a home-grown think-tank, the Texas Public Policy Foundation (TPPF), charts the course: Texans don’t have to raise taxes to obtain better services, or eliminate services to reduce spending. In fact, by harnessing the reins of the private sector, Texans can cut both state and local taxes and have better services: better streets, better libraries, cleaner water, better airports, better police protection, a better environment, better schools.

How? By using the proven management techniques of competitive outsourcing, sometimes called ‘privatization’, to contract for the best service at the lowest qualified cost. At the same time, such practices enhance the careers of public employees. Other states are way ahead of Texans in outsourcing, and it’s time, says TPPF, for Texas to join the 1990’s. After all, it’s the taxpayers’ money, and the public’s services.

TPPF’s recently released report Sundown on Big Government focuses on state government and concludes:

  • Taxpayers typically save a least 15 to 20 percent when private enterprise provides government services under contract;
  • Major infrastructure construction projects can save 50 percent or more;
  • $737 million dollars could be saved just within the 12 state agencies that TPPF studied, without eliminating any services;
  • The Texas Department of Transportation (TXDoT) alone reports a 10.9 percent administrative cost (the national average is 7.3 percent), representing a cost difference of $242 million every two years, which could build and repair a lot of highways; and
  • TXDoT has a 4 to 5 year supply of roadway inventory, at a cost of almost $100 million, and no idea how much has been lost, stolen, or has perished. ‘Just in time’ inventory practices of the private sector would result in inventories of 30 days or less and would include strict inventory tracking.

Local governments offer even larger opportunities for ‘better services, lower taxes’. For example, some Texas cities have already realized that better services can be accomplished through redirected public dollars. If a city needs more police officers or better libraries, higher taxes are not the answer.

Additional revenues can be found by reducing the costs of wastewater treatment through contracting with a private-sector company, outsourcing computer or payroll services, and hiring private engineers by the hour instead of public employees by the year. The services which are contracted out will also improve. Private-sector companies remain competitive by providing state-of-the-art technology, modern equipment, strict safety measures, and modern management practices.

When Oklahoma City hired a private company to handle wastewater treatment, taxpayers reduced costs by 40 percent and eliminated several environmental and odor problems. City employees will tell you that they would never go back to the old system.

Now, a word about public employees. In most cases, the careers of public employees are enhanced, not diminished, through contracted services. Private employers typically hire the existing work force, offer better training and safety with the same wages and benefits, and access to the latest technology. Most importantly, former public employees obtain new opportunities for advancement within a company with numerous contracts, rather than just one.

So what’s the problem? The public benefits of outsourcing begin one to three years later, after ‘the next election’, so its public support is a mile wide and an inch deep. The doubts, the fears, the criticisms, the ‘we’ve never done it this way before’ mentality come early on in the process and often bring it to a halt.

The following must happen for Texas taxpayers to win:

  • 1. Public officials must have the courage to insist that competition be tried, knowing of the public benefits down the road;
  • 2. Public managers must adopt a Customer-Come-First attitude, and choose the best service providers, public or private;
  • 3. Texans have to demand competition and support politicians who have the courage to try it; and
  • 4. The State Legislature must modernize its’ laws on bidding and public-private partnerships.

One source for information on competitive contracting is the Texas Public Policy Foundation, which has a great deal of data on both benefits and procedures. Public officials or private citizens can obtain information from TPPF by calling (210) 614-0080.

In the words of Abraham Lincoln, “The dogma of the quiet past are inadequate for the stormy present…so must we think anew.” Better services and lower taxes cannot be obtained through the ‘dogmas of the quiet past.’ It’s time to think anew.

Steve Bartlett is the former Mayor of Dallas and a former U.S. Congressman from the 3rd District of Texas.