Applying the "Yellow Pages" Test

June 14, 2011

The unprecedented fiscal challenges facing Pennsylvania call for new and innovative policy solutions.  By applying the "Yellow Pages" test, governments of all sizes have been able to do more with fewer resources.  The "Yellow Pages" test says that if a service can be found in the Yellow Pages of a phone book, government should consider buying it rather than using taxpayer dollars to hire and manage public employees, say the Reason Foundation and the Commonwealth Foundation.

The Yellow Pages test helps government concentrate on delivering "inherently governmental" services -- those that should be performed by public employees, like public safety and judicial systems -- while contracting with businesses and nonprofit organizations for other services.  Ending taxpayer-subsidized competition with private businesses also frees up resources for agencies to complete their mission and saves taxpayers money.

Consider:

  • Municipalities throughout Pennsylvania own a total of 49 golf courses.
  • Numerous local governments operate fitness centers.
  • The Dauphin County Authority owns the Hyatt Regency at the Pittsburgh airport.
  • The Department of Conservation and Natural Resources owns a luxury hotel at Bald Eagle State Park.
  • And about 30 counties in Pennsylvania operate nursing homes.

Getting government out of unnecessary services is not limited to auctioning off services and assets; privatization can also involve governments partnering with for-profit firms to deliver services or with nonprofit organizations or volunteers.  Given the fiscal challenges facing their state and local governments, Pennsylvania policymakers need to use the current crisis as an opportunity to transform public service delivery and apply the Yellow Pages test to drive down the cost of government.

Source: "Privatizing 'Yellow Pages' Government," Reason Foundation and Commonwealth Foundation, June 2011.

For text:

http://reason.org/files/pennsylvania_yellow_pages_privatization.pdf

 

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