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Close the Deficit: Al Schmidt

It's Our Money is asking various experts and advocates to share some suggestions for how the city should deal with the $31 million deficit it has projected for this fiscal year (and remember, because it's the middle of a fiscal year, the city can't raise taxes). This recommendation comes from Al Schmidt, a former senior analyst at the U.S. Government Accountability Office and Republican candidate for City Controller of Philadelphia.

Cities across the country have worked to close budget deficits, and some have had a lot of success, so it makes sense to look at what they've done. San Diego and Indianapolis, for example, found that they could quickly reduce the cost of city government-- and still preserve critical services -- by allowing private businesses to compete for contracts to deliver public services that aren't central to the role of city government.

Here's how it can work in Philadelphia.  A task force can be put together to identify services currently performed by city government that are also performed by private businesses. The task force then analyzes how much it costs the city to perform these services.  It then opens a competitive and transparent bidding process to qualified companies to provide these services.

There's another benefit. Unions would be encouraged to compete for the contract to provide the service. That's right: Both private businesses and unions would submit competing bids. The task force then makes its choice. By introducing competition into city government, it would be possible to quickly drive down costs and maintain or even increase public services, often without laying off a single city employee.

We wouldn't be inventing the wheel. It's worked at federal, state, and local government levels for years. And it's been effective at reducing the cost of certain city functions, particularly those that service the rest of the city government, such as payroll services and vehicle fleet maintenance.

This may sound hard to believe, but Philadelphia has a greater opportunity to save even more money than most because of how much more it costs to run our city government than other cities, even larger ones. It costs taxpayers more to employ a maintenance worker to push a mop in City Hall than in the halls of city government in New York, Chicago, and Los Angeles.

If we're serious about reducing the cost of city government without sacrificing services, we should take a close look at this approach. Otherwise, we'll be forced, once again, to choose between bad choices.  We'll continue to pay more and get less.

The real deficit facing City Hall is one of political courage.

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