A story to keep an eye on as the “Great Recession” continues to unfold is the city finances and cutback in services of Colorado Springs, Colorado. While many local governments and states are facing bankruptcy due to spending levels that cannot be met with dwindling tax revenues, the city that is home to the U.S. Olympic Committee is maintaining its low tax rates and living within its means. Colorado Spring’s experience just could have many Americans wondering why we rely on government for so much.
Now, I should fess up. I first heard of this story while watching the Ed Show hosted by far-left radio and TV political pundit Ed Schultz. I do occasionally like to amuse myself with the laughable commentary of the likes of Ed and his other MSNBC comrades Keith Olberman and Rachel Maddow.
Nevertheless, at issue in Colorado Springs was a desperate plea from city officials about 7 months ago to the voters asking for approval to raise taxes to pay for routine services. It was the same old story – the recession had caused a decline in tax revenues and the city faced a shortfall of around $24 million. Without an increase in the local sales tax, city services would have to be curtailed. With the result of the referendum, the people had spoken – city government, you will get no tax increase; do what you can with current revenue levels.
Unlike California, where for years the electorate demanded more from government without the obligation to pay for it, the good folks of Colorado Springs not only rejected higher taxes but took it upon themselves to remedy their own problem. Private citizens volunteered to pick up trash in parks. Swim clubs took over public pools. Churches and private organizations, like the U.S. Olympic committee, raised money to keep community centers and city fountains running. Admirably, one anonymous woman donated $37,000 to keep Nancy Lewis Park green and clean. Of course, Ed Schultz neglected to report these positive facets of the story, dwelling instead on how aghast he was that voters would vote down tax increases to fund non-essential government services like museums, parks, and pools. As a good statist it is inconceivable to him how normal people could live without being dependent on government for these needs.
Article comments
1 - Baronius
Interesting article, Kenn, except for the rote criticism of the Fed. (You don't have to hit the same notes in every song, you know.) What you wrote about is a really interesting and largely unnoticed story, with a good political moral. Nice job.
2 - Dr Dreadful
I do wonder if it's all wine and roses in Colorado Springs, as Kenn depicts. Will have to look into it a little more.
There certainly are many creative ways for local governments to make the tax dollar stretch. Kenn mentions public libraries, and it's worth noting that libraries have for many years subsidised the continuing provision of free book borrowing - which in many locales is a legal obligation - by charging fees for a range of peripheral services such as photocopying, video and audio lending, internet access and inter-library loans.
In the same way, unprofitable but vital public transit routes can be and often are subsidised by those which are profitable. I'm not prepared, as Kenn is, to simply assume that no-one needs to use the bus in Colorado Springs after 6:30. It's more likely that the city arbitrarily chose that time as a cut-off.
3 - John Wilson
Of course, the first and most important government expenditure to suspend is subsidies to businesses. The only reason for ANY subsidy to a business is the hope that eventually the benefit will trickle down to employees. In our capitalist system businesses should succeed or fail on their own. Yet we repeatedly grant tax subsidies and outright gifts to various businesses and business organizations.
In California we try to bribe movie companies to stay in the state with 100s of millions of dollars, and other states bribe them too, in a useless waste of tax money by all states.
50 years ago we didn't have these local budget problems and we had swimming pools, libraries, transit systems, etc., but then we decided that every expenditure had to run through some company. Privatization is killing us.
4 - Baronius
Dread, your objection to the article is that you don't have any information about the subject, so maybe Kenn is wrong? That's a bad hill to make a stand on.
5 - Kenn Jacobine
Baronius,
It's just that Fed policies affect most everything that is going wrong in the country.
6 - roger nowosielski
It would seem that Dreadful's objection touched upon one point and one point only, not the general tenor of the article.
To object to that one objection is a bad hill to make a stand on.
7 - Baronius
Kenn - That may be true, but it's alienating.
8 - Dr Dreadful
Baronius, I don't believe that scepticism is in any way a bad hill to stand on. I'm not saying that Kenn is wrong, just that depictions of Utopia generally turn out to be anything but.
Just in reading the Durango Herald article Kenn links to, I note that streetlights are being turned off in Colorado Springs to save money. But not to worry. Undaunted, the city's residents are voluntarily paying extra to have them switched back on outside their homes.
Those who can afford to pay, of course.
9 - Kenn Jacobine
"Alienating"? To whom? The tone of my piece was to study the situation in C.S. I wasn't implying that it was a utopia. In terms of street lights, having lived on four different continents, I haven't always had them and didn't necessarily miss them. Americans do have this birthrite mentality about a lot of things. I guess my view from abroad has taught me that some things that we feel are necessities aren't. You only realize that when you live without them.
10 - Dr Dreadful
The streetlights are an illustration. It just strikes me that under Jacobinesque idealism, it always seems to be the already-haves who come out on top.
11 - Kenn Jacobine
Dr. D.
Do you really think that streetlights are more important than somebody having health care? Economics is about scarce resources and folks need to set priorities. Hell, I would love a new Mercedez but I need a new roof on my house instead. As a responsible citizen I am going with the roof since needs win over wants with me. Too many people in America buys wants before needs, find themselves in trouble, and turn to the rest of us for support. America is bankrupt because of this and so at all levels of government we must prioritize our spending to meet our needs. For instance, turn the lights off, which aren't necessary anyway, and put the money into police and education - which are essential needs.
12 - roger nowosielski
Jacobinesque?
Let's not confuse it with the Jacobins and the Reign of Terror. Kenn would turn in his grave.
13 - Jordan Richardson
Yep, poor people are poor because they bought sports cars before food. You got that whole poverty thing pegged, Kenn.
14 - Joanne Huspek
I was drawn to your article since I grew up in the Springs. The first paragraph says it all - they live within their means, or are trying to. That's the difference between here (Michigan) and there. We're still in the mindset that government should pay for everything and we should have everything.
15 - Dr Dreadful
Kenn, if we extend your own argument to its logical conclusion, we need to consider that most countries did not have an organized police force, nor a comprehensive education system, until comparatively recently; some still do not. So those aren't strictly essentials either.
16 - Kenn Jacobine
Dr. D.
I do believe that police protection and a court system are fundamental essentials. I suppose they could be done privately as well. Education in my view is a societal essential, but done better by the private sector.
The problem of course with countries, most of the developing world, that do not have police and/or education systems is that it keeps them underdeveloped. There is not an educated workforce and a government system that protects private property. Thus, local entrepreneurialism is almost non-existent and when it exists usually bribes and other perks are required to protect it from corrupt government officials.
17 - Dr Dreadful
Kenn, you're most likely right about the private sector doing education better, but unless there's some sort of reining-in of the for-profit aspect of private enterprise, we just end up with the same conundrum we arrived at with the streetlights: the kids whose parents can afford it get to go to the best schools (which also attract the best teachers because they can pay them more), while the rest end up in the crappy ones or without an education at all.
18 - Dr Dreadful
As for the notion of privatised police, you can look at the favelas in Brazil for an idea of what might happen at the infra end of the spectrum.
In Brazil, the police do not go into the favelas, partly through fear and partly because the favelas themselves do not officially exist. The drug gangs which control them do keep law and order of a sort, and the residents look to them for protection. But I doubt it's all that comforting to rely on a group of guys who're as likely to come back and shoot you tomorrow for not paying them as they are to actually take care of whatever problem you may be having.
19 - John Wilson
Privatisation seems to be a big failure. Where has it succeeded?
20 - Kenn Jacobine
John,
In American industry.
21 - John Wilson
Kenn,
Every industry in the USA is heavily subsidized by the government, either in tax favors or direct disbursements. Our capitalist system is propped up by taxation on individuals. That's why business pays the Big Bux to bribe politicians and officials.
We've been subsidizing US business since the Republic was formed. For example, we sent the Marines to beat the pirates to protect US shipping business. So when the railroads started they said "hey, you subsidize our competitors with boats so you have to subsidize us too". So they did, and then the truck companies said "hey, you subsidize our competitors with boats and trains so you gotta subsidize us, too". So we did. Then the airplane guys said "hey, you subsidize our competitors with boats and trains and trucks so you gotta subsidize us, too".
And so it goes.
There is no corner of American business that hasn't benefited from government subsidy.
The whole damn thing is propped up and controlled by the federal government. We have a sovietized capitalist system.
Look how the government snapped to attention and started doling out trillions when the financiers threatened utter collapse a couple years ago. Republicans and democrats alike were suddenly energized when their masters in the Wall Street suites made demands.
Bush privatized the wars in Iraq and Afghanistan and although they both have cost and will cost extraordinary amounts of money ($1million per year per soldier, at least) we are losing them and have no prospects of winning. After 9 years. If Iraq is Vietnam plus privatization then it is a disaster.