Measure would protect private sector interests

This is an archived article that was published on sltrib.com in 2007, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

Correction: A proposed State Government Competition and Privatization Commission would be made up of seven members. An Oct. 26 story had an incorrect number.

Lawmakers who say government-run golf courses and municipal buildings smack of socialism by unfairly competing with private reception centers want to ban governments from doing jobs the private sector can do.

Sen. Howard Stephenson, R-Draper, is backing legislation that would vest tremendous power in a 15-member board appointed by the governor which would have broad authority to decide what services towns, cities, counties and the state can provide and what unfairly competes with businesses.

"It seems to me the state government should exercise its authority in whatever way it can to ensure the rights and liberties of people," said Stephenson, the head of the Utah Taxpayers Association, which supports the bill.

He believes the state's proper role includes making sure "local governments aren't getting into the business of business and putting private concerns that have invested their capital out of business," said Stephenson.

Stephenson, who chairs the Government Competition and Privatization Subcommittee, said lawmakers keep hearing from business owners who say their survival is being threatened by competition from government-owned entities, and said that is the path the former Soviet Union took and it paid a price. He also noted that government has a built-in advantage because it is exempt from taxes that businesses must pay.

Under the proposed bill, labeled as a "working draft," any business owner that felt he or she was being hurt by unfair competition could go to the Government Competition and Privatization Commission, which would decide if the activity was a "core government function."

If not, it could order the government to stop and, if the municipality refuses, go to court to seek fines and penalties.

The commission would replace the state Privatization Policy Board, which now hears complaints and can make recommendations on activities that could be handled by the private sector, but lacks enforcement authority.

The scope of the proposed commission, as it's now written, is vast. Legislators gave examples of private reception centers competing with government buildings for rent and municipal golf courses.

But the privatization board has, in recent years, also looked at turning some prisons over to private contractors and heard a recommendation from Convergys that it privatize the state's human resources functions.

And, as it is written now, there are no limits to the scope of competition matters that could be brought to the commission - anything from municipal golf courses to the leasing of city buildings to garbage disposal.

The Utah League of Cities and Towns and Utah Association of Counties both opposed the legislation, arguing the state shouldn't be dictating to elected local councils what they can and can't do.

"What may be a core government activity and perfectly acceptable in one community may be unacceptable in another," said Roger Tew, lobbyist for the Utah League of Cities and Towns. "We rely on the political process, people saying what we want our communities to do or not. That's why they run for office, to make those decisions."

But M. Royce Van Tassell, vice president of the Utah Taxpayers Association, said the state Legislature is the government body that should be making those calls.

Sen. Brent Goodfellow, who is chairman of the existing privatization board, compared the effort to Congress' mandates in the No Child Left Behind education bill that Utah has chafed under.

"I would ask the question: 'Are we sitting here today developing a No Child Left Behind to push the cities and counties to mandate to them things we ought to leave alone?' '' asked the West Valley City Democrat.

Van Tassell said that, despite the unpopularity of Congress' education reform, "sometimes the higher entity needs to step in because the lower entity has refused to meet the expectations that have been set by the constituents."

During Thursday's meeting, legislative attorneys noted the draft bill may violate Utah's Constitution, which prohibits the Legislature from giving special commissions the "power to make, supervise or interfere" with any municipal functions.

The committee plans to discuss the draft bill further, with the hope of having it considered when the Legislature meets in January.

Giving edge to private firms

* The proposed Government Competition and Privatization Commission would hear complaints from businesses that say government is unfairly competing with them. Examples legislators used to illustrate the problem are on Page A9.

* Catering and reception halls. Operators have said the low prices to rent public buildings, like Red Butte Arboretum or the Salt Lake Library for receptions undercuts private reception centers.

* Municipal golf courses. They can charge lower rates than private courses.

* Recreation centers. They compete with private gyms.

* Trash collection. Cities disposing of their own trash cut into opportunities for private firms.

* Ambulance services. Some cities are offering municipal ambulance services, competing with private entities.