More Evidence Government Can’t Operate Like a Business


The government can’t go out of business, and the people who run it are playing with other people’s money, not their own.  Those are two facts that, I’ve argued, advise restraint when sacrificing checks and balances for the sake of business-like efficiency in government.  For a bit of recent evidence, turn to Walt Buteau’s look at red-light cameras in Providence:

Red light cameras were pitched as a way to make intersections in Providence safer while also bringing in additional revenue, but the technology that watches 25 intersections lost money last year and would’ve lost even more in prior years if not for the state agreeing to waive its share. …

… city spokesperson Evan England said that around 2008, city leaders realized the amount paid to the vendor that maintained the system and the state’s share were cutting too deep. England said the payments to the state were put on hold at that time. …

Even without the state’s cut, and with all the cameras working, when you crunch the numbers from the past five years the city’s portion is less than half of the amount collected, totaling about 45%.

To some extent, this is like government’s reliance on cigarette taxes, as people give the habit up, and gas taxes, as cars become more fuel efficient.  But the real lesson is more like the wind turbine owned by the town of Portsmouth, which broke down years ago and hasn’t spun since, although the debt payments continue:

England said the citation drop was caused by several non-working cameras, but the city decided against repairing them since plans were already in the works to change some of the monitored intersections. According to England, the city believed it made more sense to install the new cameras at the newly selected intersections, instead of replacing the non-working cameras at their current locations and then moving them.

Observe two things about that paragraph: First, that the estimates of revenue apparently did not adequately account for maintenance, if it was considered at all.  Second, that the city decided it was better to lose money on the cameras, rather than bother replacing them prior to a move.  (No doubt, the cost of unionized labor to install and move the things played a role in this calculation.)

Of one thing we can be sure, though: Affiliated Computer Services (ACS) is making money on the deal, if only because city taxpayers are covering the risk.