I am cursed that I have a formal post-secondary degree in Economics, which makes the blessing of working in government, at times, a difficult paradox.
My short definition of economics is: The study of the allocation of scarce resources to their greatest and best use.
In my mind, the free market system (capitalism) has been proven to be the best method to achieve these desired results, but of course, there are horrific examples where this system often fails. These failures are usually related to greed, corruption (law breaking), or other nefarious behaviors, but more often than not, government is the cause that gets in the way of achieving the best use of resources. This disruption comes in the form of taxes, fees, regulations, statues, ordinances, laws, case law, etc.
What provides me some solace in this paradox is the economic concept of a “pure public good” (PPG). A PPG is a resource so essential to the welfare of an economy that it must be entrusted to be provided by government to ensure that it continues to be available.
The hallmark example of this thinking is a lighthouse. Imagine a small fishing village where the boats go out and return each day with their catch. This catch is then sold in the local fish market to the members of the community, and these transactions lead to other transactions by the fishermen, who buy supplies from the cobbler, baker, and candlestick maker, who in turn, purchase other needs from other vendors and so on. Thus, the fishing industry is the genesis for an even larger economy in the community (and beyond).
This system works, provided the boats are able to make it out and return every day. However, large storms have disrupted other similar communities, which prevented the boats from being able to safely return, and resulted in the devastation of these other communities’ economies.
However, in our model community, the leaders (government) recognized the frailty of their system and established a tax to generate revenues in order to build, operate and staff a lighthouse to ensure that the boats could always find their way back safely to the harbor, and prevent the devastation of the economy like their neighboring communities had experienced.
The lighthouse is the PPG -- so valuable that it had to be entrusted to government to ensure that it remains available.
The principle of PPG of course can be applied to other more modern examples, such as national defense, border security, air traffic control, inter and intrastate roadways, and on and on.
On the local level, I believe a fire station is another form of a lighthouse. Without it, a large catastrophic fire could result in economic ruin for a community.
This thinking can also be applied to our local schools, as they too are lighthouses that contribute to the welfare of our future economy. I once had a PhD principal tell me that teachers actually save more lives than firefighters and paramedics, so they too are heroes -- to which I had no argument because, of course, she is right.
Local governments also provide other lighthouses, such as police forces, sewage or waste collection systems, water delivery systems, libraries, public recreation facilities and parks, etc.
At times, some of these things are privatized, which for some, might represent a more efficient method to allocate them, but this also potentially makes these goods vulnerable to the enterprise that is managing them. Imagine if one or two of our local trash companies went out of business. We would then all be susceptible to the pricing whims of the companies that remained, or worse, we might not get any service, which would literally and figuratively stink.
So why all of this long discourse leading up to what our pressing needs are? Because I think that some of our hallmark lighthouses are currently struggling to find a way to stay lit. The current #Red for Ed/walkout is an excellent example of this problem.
If the local school district has the community’s support to develop a robust educational system that produces highly educated and motivated students, they have to establish a system to reward (pay) teachers who perform the best, and invest in the technology and infrastructure to provide the environment to support this goal. This is noble, except the state gets in the way by limiting how much revenue the district might receive
If the local community desires to reduce the response times of the fire department, and thus save more structures from fire or save more lives from heart attacks, then additional fire stations, apparatus and highly trained staffing need to be provided. This too is noble, except the state sets forth limits on how much the local district can levy, which slows or prevents these goals from being achieved.
If the local community desires to reduce the crime rate, then it is likely that additional patrol officers and vehicles are needed to provide more routine patrols and thus intimidate the “bad guys” from committing bad acts for fear of being caught. Again, however, the state puts limits on how shared revenues are doled out, so a local municipal government is forced to raise its sales tax rate to raise the revenue it needs to achieve its goals. This might work in an isolated community, but buyers are mobile and can travel to other areas to purchase what they want, and thus the local community might actually see a loss in revenue if it raises its sales tax too high.
The pressing problem is that the local community actually has very little control over some of their local government. The State of Arizona, by virtue of enacted statutes and regulations, at times, actually has a larger say in what local governments can accomplish because of the constraints the state imposes on the revenue the locals governments can receive.
In short, the pressing problem for us at Copper Canyon Fire and Medical Authority is how to contend with an ever-increasing call volume while still delivering prompt and efficient service, while we remain at the maximum tax rate imposed by the state.
The short term-answer has been to be creative:
• Share services - did that; still ongoing.
• Pursue overrides - did that at Montezuma-Rimrock Fire District.
• Explore relationships with other government entities - ongoing
• Utilize public-private resources for efficiency - ongoing
• Focus on core services and avoid chasing “trends” in the industry until they are proven to be best practice - ongoing
• Aggressively pursue grant opportunities - did this and ongoing
• Simply do more with less …
The long-term solution is to actually have a candid dialogue between state and the local leadership of each lighthouse in order to look at how the current funding system got to the state it is in (Proposition 117 played a big role in this for us), and explore how to revamp the system to ensure that local control has a greater say in how they want to continue to fund their local lighthouses.
Again, back to my economics curse, as the above dialogue implies that I am promoting higher taxes (which I typically would not), but if the local community supports these higher taxes to receive better services (more/brighter lighthouses), then I am all in.
But there is also a danger because I think that the larger the government, the greater the degree of waste, which is often hard to combat (federal, state, county). So the local citizenry can only impact their taxes by combating it locally, which is ironic, as these forms of government are often the ones that provide the services people use the most.
If people felt their money was not being wasted by the “big guys,” they might be more inclined to provide more local tax support.
Terry Keller is the fire chief for the Copper Canyon Fire and Medical Authority.