2/13/08

Labor-state unions promote new ways to tax

Here is how you make a profit on providing a public service: You take a public facility and sell it. Not in the sense of turning over the deed. Jim Zilli, who heads his family's catering company, says you sell the county's banquet facilities at O'Donnell Park by giving 20 to 30 tours a week, an hour or more each, to potential customers. You have not only kitchen staff and serving staff, you have training staff so diners leave happy. You have a live chat button on the Web site to answer questions.

"Privatization" is like a vulgarity to an unusual number of officials in Milwaukee (WI) County. It's the "elimination of family-supporting jobs," claimed one County Board member. Another suggested that it would be "pimping off the parks system." "Who the hell is going to pay the taxes?" demanded one county employee at the thought of seeing whether some company could do some county task more efficiently.

Here's who would pay the taxes: Some of the 160 or so people who work for Zilli's company, Ellen Zilli's Catering. The jobs may be privatized, but they are, imagine, supporting families.

And it's a family-owned company, in the Zillis' case, one that made its name with the now-closed Grandview Inn in Waukesha. The family also runs Coast restaurant at O'Donnell Park, taking the place of two previous unsuccessful tenants.

"We have to keep reinventing ourselves," Jim Zilli says.

So catering is a growing part of its operation, including at O'Donnell Park. The county gets paid for this.

The deal has worked for all sides, he says. "Sue Black gets it," he says of the county parks chief. The county didn't have the time or expertise to properly market the banquet venue. His company did, and so by privatizing the banquet operation, the county's property doesn't sit underused, Zilli turns a profit and the staff makes a living.

This balance goes to the heart of most complaints about privatization. County Executive Scott Walker has talked about seeing whether the county can provide services while saving some money. Critics say it's all about the jobs.

It is? I thought public services were about service rather than keeping as many people in clover as possible.

Critics like to cite the Milwaukee Public Museum as a sign privatization doesn't work, though that story was more about a missing-in-action board of directors. Locally, governments have successfully contracted out or simply shed all sorts of tasks. As in the case of the sewerage district, it's made it easy to change vendors when it suits the public purpose.

This can lower costs. Critics dispute this, but the effect is real, says James Peoples, an economist at the University of Wisconsin-Milwaukee who has written on privatization. Public sector labor costs go down, he says, if privatization is an option - even for jobs that aren't privatized.

Usually, where private contractors save governments money is that they have non-union work forces. In Wisconsin, that's big, since benefits in public-sector union contracts are far above average.

But even the possibility of privatization lowers costs, says Peoples, because when competition's a possibility, unions have less leverage in bargaining. Tellingly, Milwaukee County finally won concessions on the benefits it was paying courthouse employees only after it threatened to contract out security and maintenance.

This is glum news if you feel the point of the county is to offer top-notch pay. But that would be an odd position for those truly convinced that most public services are indispensable. If the county must do all that it is now doing, and if its supply of money is finite, wouldn't we want to get as much out of that finite supply of tax revenue as possible?

Why, yes, unless your interest were mainly in that sliver of the county's population that is on its payroll as well as its tax roll. Or if you thought the supply of revenue weren't finite at all. That's why unions are promoting new ways to tax still more people harder - anything to keep the taxpayers from noticing just what price they're paying for the help.

- Patrick McIlheran is a Journal Sentinel editorial columnist.

(jsonline.com)

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