Privatization of services in Waukesha County
Privatization refers to the transfer of a business, service, or industry from the public control and ownership to the private sector. Privatization has been an important aspect of the economies of Asia, Latin America, and Western Europe. Privatization has been introduced to the United States economy recently because state ownership of businesses has been minimal (Zahra et al., 2010). Since the 1990s, privatization yielded 2.7% to 27% of counties’ GDPs. Certainly, the privatization of public enterprises also points out how governments should own and control corporations. According to Zahra et al., 2010, the government often resorts to privatize some of its operations when government regulations and processes are inefficient to activities involved. Also, in circumstances of a rapidly changing economic environment, the government privatizes its enterprises to tap resources from the private sector and share risks since the private sector can adequately respond to market demands and opportunities. Privatization has also been attributed to social justice, as in the case of Malaysia. Zahra et al., (2010) cites that privatization of public corporations ensures redistribution of wealth and moving marginal communities closer to the middle of the economic mainstream.
Waukesha County has the most noticeable example of private sector collaboration, with approximately sixty privatized institutions (Zhara et al., 2010). These privatized public services include jail services, recycling and waste collection services, and housekeeping services. For instance, waste and recycling services are done by Advanced Disposal Services, a private company that works in sixteen states in the U.S. in providing effective and sustainable services to protect the environment. The company is the fourth largest solid waste company in the United States that provides incorporated non-hazardous solid waste collection, recycling, and discarding. The county’s government has also privatized jail services, including mental health and meal services, which has resulted in a substantial decline in expenditure in jail services from $179 000 to $135 in the past three years. Privatization of these sectors earns Waukesha’s government enough revenue, and also taxes imposed on residents decline. Thus, making Waukesha one of the ten counties which does not impose the 0.5 percent sales tax on its residents, which is allowed by the state laws. The popular efforts that have been used by Waukesha’s government to realize privatization are discussed as follows:
Vouchers are used by the government of Waukesha to ensure equity among its residents. A voucher refers to a subsidy that enables one to purchase an item from a restricted set of goods and amenities (Natriello, 2018). An example of a voucher used in an effort to privatize is the school voucher. This allows students from poor economic backgrounds to school in private schools by using the voucher to pay their tuition fees. Second, outsourcing for private services to provide public goods has enhanced privatization, for instance, the jail, housekeeping, and waste collection services. Third, is the use of third party financing to finance government projects, instead of the federal government financing the projects. Examples of projects that have been financed by third parties include government office buildings, electric power supply, and housing the military. In 2018, a private sector renovated Waukesha’s county hospitals, warehouses, and the county’s commercial buildings under Property Assessed Clean Energy program. Lastly, divestiture, also referred to as load-shedding is an effort used by the government to privatize its institutions. Divestiture refers to a process when the government sells its agency, service, or corporation to the private sector. For example, recently, Waukesha’s government sold part of its real estate to a private sector to generate revenue for use.
The government should outsource prison services since success is evident when the private sector manages jail services. Apart from saving the government money, individuals in jail set-ups, which have been privatized, have demonstrated better mental health and general wellbeing.
Financial policy trends towards alternative taxes
Waukesha’s government relies heavily on taxes from property tax, corporate tax, and personal income tax to collect revenue for financing government operations. Personal income tax is approximately 7.2 percent in Waukesha, while property tax and corporate taxes are significantly high. Due to high taxes imposed on services and income, a negative impact on economic growth has been evident (Friedman et al., 2018). Therefore, the local government should look for ways to mitigate the problem by outsourcing other sources of revenue. For instance, the county government does not impose taxes on sales, which is allowed by the state government. A policy aimed at imposing a five percent sales tax has been formulated, and it seeks to moderately broaden the sales tax to 5.75 percent while repealing personal exemption on the tax. If this tax is imposed, it will help in reducing taxes imposed on income and corporate institutions. Also, the government could impose taxes on liquor, cigarettes, and gambling without causing economic burden to its residents.
State and federal tax policies that could affect revenue streams
A significant policy that affects revenue streams in Waukesha is the federal tax reform, which was passed by Congress. For instance, corporate tax was reduced by about 20 percent, and this would mean the county’s revenue decreased. Also, marginal income tax rates were reduced, while income tax was increased, while personal exemptions were scraped off, and local governments’ tax deductions were capped at $10 000. So, streams of income increase.
References
Friedman, J., Betor, T., & Do, S. (2018). The Votes Are in: State Responses to Federal Tax Reform. Tax Executive, 70, 31.
Natriello, G. (2018). Vouchers, privatization, and the poor. In Privatizing Education (pp. 263-278). Routledge.
Zahra, S. A., Ireland, R. D., Gutierrez, I., & Hitt, M. A. (2010). Introduction to Special Topic Forum Privatization and Entrepreneurial Transformation: Emerging Issues and a Future Research Agenda. Academy of Management Review, 25(3), 509-524.