The holiday season is filled with traditions. Religious, family, sports, music and entertainment events are carefully restaged each year, each in its own way strengthening our links to the past and building our confidence in the future.
At this time of year, though, we often neglect the rich traditions that are being created in the public sector.
The Seattle Monorail Project recently held its own holiday event and provided an example of this tradition. Because of timing issues, the now-defunct project had collected tax money that was no longer needed. So the money was just sitting there.
What to do?
The board members decided against giving its unspent money back to the taxpayers and in so doing they gave a holiday boost to a growing public works tradition best summed up by this philosophy: “Once you’ve got the money, never, ever, let it go.”
By their very nature, traditions are predictable. So when the board members of the now-defunct monorail project voted to divert the taxpayers’ money, no one was surprised. It was not big news because it was expected. Instead of refunding the money, the receipts from the car-tab tax will be given to the city and used to refurbish the Seattle Center Monorail.
It occurred to a few of the board members that there was something not right about this, but they were out-argued and, eventually, out-voted. The arguments given were very interesting in that they illustrated the cultural shift that has taken place in responsibility-dodging.
For years, standard practice in both public and private organizations involved blaming the computer – not only for mistakes but also for errors in judgment. The computer remains useful in this regard, and occasionally we still do hear things such as “Our computers were down all morning, so I couldn’t process the check for you.”
But for this generation, especially in the public sector, lawyers are the new computers. The mantra “If we do this we’ll get sued” has replaced the computer excuse in the pantheon of tools used to avoid responsibility for doing the wrong thing.
And there is no doubt that the monorail project board did the wrong thing. It is never the right thing to collect tax money for one purpose and divert the cash to another use.
The idea, posed to the board, that the Seattle Monorail Project can’t return the money because it wasn’t specifically authorized to do this is legal sophistry at its most poisonous. When individuals and organizations have to be specifically authorized to do the right thing, we cease being a nation of people and become a hive of androids.
From an economics perspective, the important issue raised by the board’s action is the avoidance of accountability. Publicly funded projects such as the monorail are directly dependent on the willingness of taxpayers to pay the bills – and that, in turn, depends on the belief that funds will be spent wisely, and in good faith, for the originally intended purpose.
Our economy and our society depend on this belief, and it should not be treated carelessly or with contempt. Recent public transportation projects in our state have rattled this belief. And we should be concerned about spillover effects on such things as funding for public education.
There are similar accountability avoidance actions under way in the private sector as well. The emergence of the private equity market is clearly a reaction to the increased accountability requirements imposed on public corporations by stock exchanges and federal authorities. Many corporations have chosen less-regulated European, rather than U.S., stock markets for their initial public offerings for much the same reason.
These actions in the private sector are different, though, in that they involve simple choices among different financial options. If the private equity market dried up, they would make different choices.
Public finance has only one choice and it is based on a relationship with the taxpayers. If we screw that up, our remaining options are few to none.
The Seattle Monorail Project’s decision to give the money to the city is not the crime of the century. It is even, possibly, a choice that the public might have supported, given a chance to do so.
But it wasn’t right. The decision represents instead the kind of uncaring arrogance that first erodes and eventually destroys relationships of any kind. That is the type of tradition that we celebrate, like Scrooge’s life, only after it changes.
James McCusker is a Bothell economist, educator and consultant. He also writes “Business 101” monthly for the Snohomish County Business Journal.
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