Jared Polis on U.S. Postal Service: end its “monopolistic protections and special treatment”

This originally appeared in the Boulder Daily Camera on December 3, 2011 in response to this question: The United States Postal Service is facing major financial constraints, and it is forecasting a record $14.1 billion loss for fiscal 2012. … What do you think the USPS should do?

Break free, USPS! Leave your over-protective and controlling parent: the U.S. government. Yes, the perks are nice. The Feds grant you monopolies on mail delivery and mailbox access. They exempt you from costs such as vehicle licensing, parking tickets, threats of antitrust suits, and taxes on sales, income, and property. The fifteen billion dollar U.S Treasury credit line is nice, too.

But Federal controls cripple you. The Feds make you deliver mail almost everywhere, six days a week, while restricting your ability to increase prices. Freedom to adjust prices and deliver on fewer days would save billions annually. Three of four Post Offices lose money. But U.S. Code prohibits closing them “solely for operating at a deficit,” and Congress must approve any layoffs.

Further, you must pre-fund your retirees’ health benefits, which your Postmaster General says is “effectively bankrupting” you. Yes, USPS retirees get health benefits! As your website says, “federal statutes hamper [your] ability to craft a market-based benefits package.” Indeed. DownsizingGovernment.org describes how your employees enjoy a “postal pay premium” between 20% and 35% compared to comparable private-sector employees.

USPS, listen to what Rep. Jared Polis, D-Boulder, wrote ten years ago. Ending “monopolistic protections and special treatment enjoyed by USPS” would “benefit … postal customers, postal employees, and businesses in the delivery sector. … Unless we unshackle USPS and allow it to leverage its infrastructure effectively as a normal privately owned company, then USPS will sadly fade away as it becomes increasingly irrelevant in the marketplace.”

* * *
Thanks to Ari Armstrong for the Jared Polis reference.

Maintaining Boulder open space trails: user fees & sponsorships should replace taxes

How Boulder County finances its trail maintenance is unjust. The county sales tax forces people to finance hiking trail maintenance, whether or not they use them. Meanwhile, people who don’t shop in Boulder County can use trails without paying.  The County should strive to replace tax-funded trails with user fees and sponsorships.

As a type of user fee, parking fees and annual parking passes for cars registered in other counties are a step in the right direction. The assumption is that a typical hiker coming from outside Boulder County pays less county sales tax than a trail user who resides in the county. The parking fee is an attempt to resolve this difference.

A drawback is that the fee makes some out-of-county hikers “pay twice.” Meanwhile, the sales  tax still forces county residents who do not use trails to fund other people’s recreation. To resolve this, the County should both decrease taxes and extend trailhead parking fees and passes to cars registered in the county.

In addition to user fees, corporate sponsorship of trails is another way to raise revenue through voluntary means. The Continental Divide Trail Alliance does this. Since 2009, REI has contributed more than $15,000, while Home Depot, Salomon, Coleman, and Smartwool have each contributed more than $1,000.  Trailhead maps and direction signs along the trail could identify sponsors: “This trail is maintained by a generous donation by …” and include the sponsor’s logo — tastefully sized of course.

A version of this article was printed in the Boulder Daily Camera on Saturday, June 18, 2011.

Boulder & Denver bike-share: boon or boondoggle?

B-cycle is Boulder’s new bike share program. Denver’s B-cycle program is a year old. Does “B” stand for boon or boondoggle?  The Boulder program’s start-up costs included half a million dollars taken from taxpayers: half collected by the City of Boulder, half from federal “stimulus” funds.  Denver B-cycle received $210,000 from the “stimulus.”  Yes, B-cycle’s bikes and technologies do sound impressive. But if it’s a true boon, then it should have been able to raise sufficient start-up funds from investors, sponsors, and donors.

Some might argue that private funding could not have built B-cycle. But as economist Henry Hazlitt would say, B-Cycle “has in fact been built by private capital – the capital that was expropriated in taxes.”  We won’t see the goods, services, and non-profit ventures that never materialize because governments took money by force from people who would have spent it differently.

Potentially expensive bike maintenance may deter private investors from investing in bike-share ventures. As law professor Steve Clowney describes: “No individual bears a significant portion of the costs if they damage a bicycle … users have little incentive to take care of the bikes.”  The New York Times reports that sustaining Paris’s bike-share requires the repairing “some 1,500 bicycles a day,” or seven percent of its fleet.

Or maybe Montreal’s experience deterred investors. Because of high start-up costs, “the non-profit agency that runs the city’s bike-rental program … is running a $31.7 million deficit,” reported the CBC.

Voluntary donations, sponsorships, and investments should fund B-cycle. It should be a revenue source for Boulder and Denver, not an expenditure of taxpayers’ money. For example, they could charge B-cycle for placing “B-stations” on city-owned land.

A version of this article was published in the Boulder Daily Camera on May 21, 2011.

Thanks to Marc Scribner at the Competitive Enterprise Institute for his post on Washington DC’s bike-share program.

The Henry Hazlitt quote is from his excellent book, Economics in One Lesson, which the Foundation for Economics Education has put on-line.

Repeal the federal gas tax, regardless of oil prices

The sharp increase in oil prices does not bode well for our finances. It’s not just higher gasoline prices. Spikes in oil prices are correlated with recessions. “All but one of the 11 postwar recessions were associated with an increase in the price of oil,” writes economist James Hamilton.

One way to decrease gasoline prices is to suspend, decrease, or eliminate the federal gasoline tax of 18 cents per gallon.  Enacted in 1932 as a temporary deficit reduction measure, it validates Milton Friedman’s maxim: “Nothing is so permanent as a temporary government program.”

A gas tax is proper to the degree that it acts a user fee. The gas tax you pay should go toward maintaining the roads you use, or are likely to use. Boulder drivers shouldn’t be taxed to finance roads in Flagstaff.  But we are. We’re “gas tax losers,” says the Environmental Working Group. Send a gas tax dollar to DC, and the Denver-metro area gets only 86 cents back. But Flagstaff, to pick a “winner” city, gets $2.30 back.

To make matters worse, many gas tax dollars don’t support roads – anywhere. As Transportation Secretary, Mary Peters told PBS that “only about 60 percent of the gas tax money … actually goes into highway and bridge construction.”  A Heritage Foundation study concurs, concluding that “as much as 40 percent of fuel tax revenues” fund costly, inefficient, and underutilized “mass-transit” boondoggles.

Eliminate the federal gas tax so drivers pay to maintain roads they actually use.

This article was printed in the Boulder Daily Camera on March 12, 2011.

http://www.cato.org/multimedia/embed/2898

Thanks to Tad DeHaven for some of my talking points, which I got from his appearance on CNBC’s Streeet Signs. Not only does he make good points, but he handles the snarky comments by Jim Pethokoukis. Pethokoukis has a bit of a fit at the end at the suggestion that government planning inevitably fails.

See also:

Street Smart: Competition, Entrepreneurship, and the Future of Roads

Sell the Streets, by Benjamin Powell

Boulder Valley Comprehensive Plan: buy open space yourself, don’t tax others

If you want open space, buy it. Don’t tax others.

Billboards tarnish the Flatirons while houses climb the foothills to meet them. This is what “city planners believe the Flatirons could look like today if the city had not enacted restrictive land-use policies,” reported the Daily Camera. Boulder’s Department of Community Planning and Sustainability spent your tax dollars on such images to convince residents that only its authoritarian land-use restrictions can prevent such a dystopian scene.

Not so. For over a hundred years private land trusts have preserved open space — not with government force — but through voluntary cooperation and donations.  The Land Trust Alliance lists 34 local Colorado land trusts.  “Land trusts have protected over 1.57 million acres in Colorado, more than 80% of all conserved land,” reports the Colorado Coalition of Land Trusts. This is four times the acreage that local Colorado governments restrict through forced open space policies.

Leonard May of PLAN-Boulder County refers to those with a “philosophical objection to (government and) restrictions” to whom he “can’t explain” the benefits of open space. He ignores the difference between preserving open space through land trusts versus doing so through legal restrictions.

Land trusts depend on voluntary cooperation, taking responsibility for promoting one’s own values, and respecting the rights of others to pursue theirs. Compare this with government-enforced open space, which forces everyone, willing or not, to fund it. It’s elitist legislation that effectively excludes poor residents from town by propping up homeowners’ property values.

The Boulder Daily Camera printed this article on December 4, 2010.

For more on open spacing and planning, see the work of Randal O’Toole and R.J. Smith.

Photo credit: The Daily Camera article on the Boulder Valley Comprehensive Plan.

Quoted in Boulder Weekly on open space tax

I’m quoted in a Boulder Weekly article on a proposed tax for open space:

Not everyone is as supportive of the county open space program. Brian Schwartz of the Independence Institute, a conservative free-market think tank in Golden, says private funding should be used for land preservation, not public funds.

“Why not find sponsors?” asks Schwartz. “There should be ways to finance these purchases without tax money.”

Schwartz also suggests using volunteers to maintain the trails and other public amenities offered by open space.

I wrote about this in the Daily Camera in 2009:

Regardless of user fees, how about soliciting donations for trail creation, management, and maintenance? The Continental Divide Trail Alliance does this. Its website lists both individual and corporate donors.  Outdoor gear companies REI and Coleman each donated more than $15,000 in 2007.  Saloman and W.L. Gore also donated thousands of dollars. Like the “Adopt-a-Highway” program, signs at trailheads could recognize those whose donations support the trail’s maintenance.

Read the whole article: Open space trails: user fees & sponsorship, not taxes.

City of Boulder should consider outsourcing, privatizing services

Background from the Daily Camera:

Boulder City Manager Jane Brautigam has been working this year to move to a “priority-based” budget, in which the things most important to the community are first in line for funding.

My response, published in the Camera:

The Boulder City Council should consider saving money the way private organizations often do: by outsourcing some of its operations to private firms. For-profit and non-profit firms that compete for government contracts have incentive to provide low-cost quality services. A firm won’t get a contract if its bid is too high, and its contract won’t be renewed if it does a lousy job. Typical savings from privatization are between five and twenty percent, reports the Reason Foundation.

The towns of Roswell and Sandy Springs, Georgia each have around 90,000 residents. But Sandy Springs’ annual budget is around $300 less per person. Why? Sandy Springs has outsourced many of its services to private-sector firms. Unlike surrounding cities with budget deficits, Sandy Springs has a surplus.

Outsourcing some Public Works services could be worthwhile. Consider Centennial, CO. In 2008 Centennial signed a five-year agreement with a private firm to “manage all public works functions for the city.” This includes “traffic engineering and operations, permit processing, inspections, administrative services, and street and roadside maintenance, including snow removal.”

Also examine Parks and Recreation. Consider outsourcing their operation to private firms.  Such privatization efforts have yielded 20% cost-savings. Or better yet, could the City raise money by leasing its facilities – rec centers, fields, pools, and golf course – to private organizations to manage them?

Or how about increasing user fees for Parks and Recreation programs? Don’t some programs compete with private firms, and make taxpayers subsidize other people’s leisure activities? This is both costly and unfair.

This was originally printed in the Daily Camera on July 31.

A couple of Daily Camera articles about this:

• Boulder’s low priorities for 2011 budget include SWAT team, EMT training
• Boulder city manager defends ranking public services

And the Priority Based Budget Memo dated July 27 by the City Manager and others. This includes one method by which they would prioritize city services.

Governments are poor stewards of forests

From New Scientist:

In the first study of its kind, Chhatre and Arun Agrawal of the University of Michigan in Ann Arbor compared forest ownership with data on carbon sequestration, which is estimated from the size and number of trees in a forest. Hectare-for-hectare, they found that tropical forest under local management stored more carbon than government-owned forests. There are exceptions, says Chhatre, “but our findings show that we can increase carbon sequestration simply by transferring ownership of forests from governments to communities”.

The New Scientist article is gated, and I got the above quote from Tyler Cowen at Marginal Revolution. For more, see his post: The economics of local forest management (or another lesson in Elinor Ostrom).

In Reason magazine, Ronald Bailey writes:

Authors Ashwini Chhatre, a geographer at the University of Illinois at Urbana-Champaign, and Arun Agrawal, a political scientist specializing in environmental policy at the University of Michigan, offer evidence that governments have a habit of licensing destructive logging and that they often fail to prevent resource rustling. In contrast, Chhatre and Agrawal found, forests owned by local communities are managed for the long term and store lots of carbon dioxide.

As Chhatre told New Scientist, “Our findings show that we can increase carbon sequestration simply by transferring ownership of forests from governments to communities.” Chhatre and Agrawal further suggest that locals are better at managing common pastures, coastal fisheries, and water supplies.

Read the whole article: Who owns the forests?.

Questioning your “compassionate” politics

My <a href="http://www.huffingtonpost.com/brian-t-schwartz/questioning-your-compassi_b_574030.html”>first article/post for the Huffington Post appeared today. It begins:

“You oppose Medicaid and government-run schools? You’re heartless and lack compassion.”  If you have ever made this accusation, even tacitly, I invite you to reconsider the government policies you support.

Why does being compassionate mean supporting government-run schools and health plans? This makes little sense if you view these programs as government-run charities. Would you agree to perpetually donate a portion of your monthly income to the same charity -  regardless of its effectiveness?  If the charity is doing a lousy job, wouldn’t you want the freedom to find a better one?

Read the whole article: <a id="title_permalink" title="Permalink" href="http://www.huffingtonpost.com/brian-t-schwartz/questioning-your-compassi_b_574030.html”>Questioning Your “Compassionate” Politics. (Update, the Denver Daily News also published the article.)

Thanks to Ari Armstrong, Paul Hsieh, Dave Kopel, and my wife for their comments. Thanks to Jessica Corry for putting me in touch with HuffPo.  I acknowledge many others in links within the article.  One person I did not link was Michael Cloud, whose book Secrets of Libertarian Persuasion was quite helpful, especially for this sentence, which is basically his:

If you support mandatory charity, what do you authorize government to do to those who peacefully refuse to cooperate?

I also recommend Cloud’s CDs on this topic. Great material, and not much overlap with the book.

Peter Saint Andre also inspired some of my ideas for this article. Many years ago I read his essay, On the Road to Voluntary Government Financing.

RTD’s “FasTracks” on the wrong track

The Daily Camera (Boulder) asked its Editorial Advisory Board members their views of different sales tax schemes for funding RTD’s “FasTracks.” My reply was published on Saturday, February 13:

Adaptable commuter transit routes, reducing traffic congestion with demand-sensitive road pricing, and minimizing both free-riders and forced funding. These goals should guide transportation policy. Taxing everyone to fund static commuter rail puts FasTracks on the wrong track.

RTD’s low-ball cost estimate is not surprising. In “16 Ways RTD Deceived Voters About FasTracks” economist Randal O’Toole notes that Southwest and Southeast light-rail lines costs 28% and 59% more than original estimates, respectively.

The controversy should not stop here, however. O’Toole shows how RTD has sold FasTracks with false advertising.

If FasTracks reduces traffic congestion, it would be negligible and short-lived given increasing vehicle traffic. It won’t reduce pollution, either. Denver’s light-rail trains emit more carbon dioxide per passenger mile than SUVs. “FasTracks adds almost six times as much nitrogen oxides into the air as all the cars it takes off the road,” O’Toole concludes.

The proposed Northwest rail corridor between Longmont, Boulder and Denver compares poorly to bus rapid transit. O’Toole summarizes RTD’s investment study: “Bus rapid transit was ten times more cost-effective at relieving congestion than commuter rail: it cost less than 60 percent as much to build, cost half as much to operate, and provided almost six times as much congestion relief.”

Bus rapid transit is just one alternative O’Toole discusses in his on-line “Mobility Plan for Denver” and new book Gridlock. Adding express toll lanes, coordinating traffic signals, and lifting restrictions on private transit services can also reduce traffic congestion and increase our mobility.