Privatization and PPPs
The local and federal governments across America have moved to privatize the provision of services. Privatization is preferred because it enables better service provision for people as well as enables governments to save on expenses. According to Minger (n.d), privatization has evolved over time from a radical concept into an approach that has been proven and is well established in management. Privatization across the U.S has led to better service delivery by providing greater variety, effectiveness, and efficiency.
Apart from privatization, governments also form partnerships with the private sector to facilitate service provision by forming public-private partnerships (PPPs). PPPs entail cooperation between the public and private sectors in different areas such as designing, developing, constructing, operating, owning, or sponsoring infrastructure assets or in the delivery of services. However, the private sector is expected to play a major role in the partnership while the public sector provides the needed support (Minger, n.d). The City of San Diego is dubbed as the best model for PPPs. It is the second most populated City in America, followed by Los Angeles. Therefore, the City has a huge population to serve.
San Diego was among the places chosen to conduct a pilot PPP project in the 1980s through the passage of Assembly Bill 680 (Minger (n.d). The first PPP involved the construction of the Route 125 toll road in the County Minger (n.d). However, the first PPP was not successful as expected. Minger (n.d) states that the project ended up costing close to $500 million more than the forecasted cost of $360 million. In addition, the project did not attract many users either, as expected. Therefore, the private consortium that had signed up for the project could not collect enough money from the project. It ended up filing for liquidation, becoming the first PPP to fail to pay the federal administration’s loan. In the end, the San Diego Administration Government (SANDAG) took control of the project and has been able to operate it successfully as a component of the open road system in the County.
Nonetheless, the City continued to embrace the concept of PPPs. The PPPs are coordinated through the Corporate Partnerships and Development Program (CPDP). The entity is tasked with the exploration and formulation of innovative channels that are expected to benefit the people of San Diego. The CPDP has enabled the City to generate additional revenue from its past and current PPPs. In 2001 the City’s administration formed a partnership with the Cardiac Science Organization, which is a leading developer of cardiology merchandise and amenities Minger (n.d).
The CPDP partnership has been able to generate a lot of revenue for the City that has helped in the operation and sustenance of the Public Access Defibrillation (PAD) Program (Jaccard, 2020). The program has been helpful in improving the survival rates of sudden cardiac arrest victims by making AEDs available such as fire extinguishers in City and county environments, schools, hospitals, and dispensaries, as well as businesses and tourist attractions. To further integrate the PPP framework as an administration tool, the City has continued to seek new partnerships. In 2018, San Diego commenced the process of evaluating the need to form PPPs to develop a multipurpose project (Minger, n.d). The project entailed providing commercial spaces, residential units, and a bus Stopover in the Columbia-Civic/Core district of Downtown San Diego.
Tax Policy
In general, the state of California charges very high taxes on businesses. The state also charges double taxation since it imposes a tax on small and medium enterprises (SMEs) and personal income. According to Jaccard (2020), individual business owners pay tax on business income and pay tax on personal income derived from the business. In the City of San Diego, the City Treasurer is mandated to conduct tax administration under the Law. There are different types of taxes charged within the City, as listed below:
- Property Tax
- Sales and Use Tax
- Leases
- Highway Users (Gas) Tax
- Fines, Forfeitures, Penalties
- TransNet
- Rents and Concessions
- Motor Vehicle License Fees
- Transient Occupancy Tax (TOT)
- Rental Unit Tax
- Franchises
The latest change in tax policy involves the introduction of Propositions (Prop) 19 and 15. The propositions are expected to significantly affect the current laws on property taxes. They are mainly intended to adjust the restrictions on tax reviews on real estate as currently stated under Prop 13 and successive similar propositions. Prop 13 restricts any increase in property tax to 2 percent per year (Jaccard, 2020). Therefore, homeowners in California have usually been paying property taxes on a lesser tax base than the real value of their houses. Prop 15 and prop 19 are expected to introduce more punitive tax policies. According to (Minger, n.d), Prop 15 is aimed at taking away the safeguards on the commercial and industrial property as currently stipulated under Prop 13. Prop 19 is expected to have a bigger effect on family homes (Jaccard, 2020). Even though the proposed Law creates a fire safety fund, it establishes numerous alterations to traditional procedures on property tax calculations.
In general, San Diego has been at the forefront in the development and implementation of PPPs, which have proven effective in the provision of services for the people. The City has also developed a framework for the implementation of PPPs to ensure there is effective coordination between the public and private sectors. In addition, the City seeks to adjust the tax regime to improve the collection of taxes that are instrumental in financing various activities in the City.
References
Jaccard, C. (2020). How will Prop 19 affect my taxes if it passes? Web.
Minger, S. (n.d). Why do we need public-private partnerships? Web.