Time for KC to go big on spending cuts
The Kansas City Star
Kansas City Mayor Sly James got what he wanted in yesterday’s election — more money for streets and parks. But as my colleague Yael Abouhalkah points out, the next step should be spending cuts. Yael has been flogging pension reform and ways to reduce health insurance costs.
But why stop there? The Economist had a story recently on Sandy Springs, Ga., a community of around 100,000 people that has gone for privatization in a big way. Officials began by contracting with an engineering firm to provide certain services, then steadily expanded.
Now private contractors manage or administer city courts, parks and finances. They even provide staffing for the small number of city employees, such as the city manager and finance director. For every winning bid, the city signs contracts with a losing bidder.
From the story: “These [additional] contracts came with neither pay nor work; they simply provide insurance in case the winning bidder fails to provide good service or raises prices. John McDonough, the city manager, estimated the move will save Sandy Springs $7m each year for the next five.”
Not all of this would work in Kansas City, of course. But the basic strategy — assign the work via a competitive process — has tremendous potential. The big problem in KC is less practicality than politics.
The real powers in City Hall are the public employee unions and they want no part of this. But think about it. Sandy Springs provides a wide range of city services with a grand total of seven fully-time employees, not counting police officers and firefighters — who must be public employees under Georgia law. Even the mayor’s spokesman is a contractor.
Privatization — a competitive process — saves money. If KC had gone in for this in a more determined way years ago, Mayor James might not have found himself pushing for a tax increase in the face of an anemic economy.