Monday, September 9, 2013

A Libertarian Starting Point—One Municipal Council Member’s Modus by Hal Miller

Political Philosopher John Stuart Mill, Statesman Edmund Burke

            As my term of office began, I determined to approach policy issues of land use and budget—the two legislatively-mandated bailiwicks of the Municipal Council—in a deliberately libertarian stance.  The stance I sought was one I had learned from reading Edmund Burke and John Stuart Mill. Basically, it involved asking the following question when I initially approached any issue:  Does government (specifically, municipal government) have an arguable or defensible stake here?
            The stance rendered many issues irrelevant—at least from my perspective.  This does not mean that the Municipal Council left them unconsidered.  It is a representative body, and my stance is not necessarily that of my Council colleagues nor should it be.  Still, I have endeavored to maintain the stance, investing my efforts at policy analysis and adoption particularly in issues where I answered the telltale question affirmatively (and almost always for reasons of the general welfare).
            To convey a deeper sense of how the stance has played out, I cite a recent Municipal Council decision, namely, Provo City’s schedule of business-license fees.  A consulting study commissioned by the Municipal Council prior to my membership had proposed several recommendations after concluding that the fee schedule existing at the time was inequitable.  Because state law permits municipalities only to charge fees to recover the costs of administering the licensing process, the consultants had parsed the costs into three categories.  They were (a) clerical costs, (b) inspection (regulatory) costs, and (c) costs of emergency services (police, fire, and medical, that is, nonregulatory services) provided by the City to businesses.
            The recommendations focused on clerical and regulatory costs, and urged that the City’s cost recovery would be more equitable were it based on a much more extensive classification of businesses.  Ultimately the Municipal Council adopted a revision of the recommendations that adjusted some of the categories and the fees assigned to them.  At the time I expressed misgivings about the accuracy of the information on which the consulting study was based and my consequent suspicion about the claim of equity that accompanied the consultants’ recommendations.
            Less than a year later the Municipal Council revisited the issue of business-license fees, given the volume of complaints of inequity in the meantime.  With added opportunity to study the issue, I raised three questions.  First, rather than charging a fee for a license, that is, selling a license (which seems premised on the assumption that it is a privilege to do business in our fair city), why not provide the license free of charge (on the libertarian premise that doing business likely is good for the city)?  After all, automating the original-application procedure and the renewal procedure should reduce the clerical cost to a modest entry in the City’s expense budget.  Second, why not expect the business applicant to stand the regulatory costs, that is, the cost of the inspections required by the City’s code as part of the general welfare and the cost of doing business?  The third question repeated the second, this time for the nonregulatory costs.
            On the assumption that exceptions will need to be granted for both regulatory and non-regulatory costs (consider accidents requiring emergency services that occur at a business location but that are no fault of the business), I urged that an adjudicatory or appeals body be appointed by the Municipal Administration to consider such cases and determine whether they qualify for cost subsidy from the City budget.  For the present, the budget could continue to assign nonregulatory expenses as in the past, but these would be expected to fall as businesses assume a fair share of those costs.  One consequence might be the failure of businesses that are ineligible for subsidy and unable to afford the regulatory or nonregulatory costs.
            Instead, the Municipal Council’s decision was to return to an older version of the business-license fee schedule that predated last year’s decision, modifying its number of business categories and attendant fees slightly in hopes of improving equity.  The decision leaves the City budget still subsidizing regulatory costs and nonregulatory costs at an annual level of $1.2M.  By my libertarian reckoning, this sum may be a million dollars more than it reasonably should be.
Hal Miller
Member, Provo City Municipal Council

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