A n n u a l P r i v a t i z a t i o n R e p o r t 2 0 0 6

Transforming Government
Through Privatization
Introduction................................................................................................ 1
Privatization in Perspective ........................................................................3
Reflections from Privatization Pioneers ...................................................... 6
1. Rebuilding an Enterprise Society through Privatisation............................ 7
by Margaret Thatcher
2. Reforming Government Through Competition ........................................ 10
by Governor Mitchell E. Daniels
3. Advancing Limited Government, Freedom, and Markets . ........................14
by Governor Mark Sanford
4. Privatizing to Improve Government....................................................... 16
by Stephen Goldsmith
5. Reflections on 30 Years of Promoting Privatization................................. 21
by Robert W. Poole, Jr.
6. Privatization: Past, Present, Future ....................................................... 24
by E.S. Savas
7. Privatization: Are We Finally Turning the Corner?.................................... 29
by Ronald Utt
8. “Q” Privatised? James Bond More Efficient?........................................... 32
by John Blundell
9. The New Public-Private Landscape......................................................... 35
by William D. Eggers
10. The New Privatization: Applying Old Lessons to New Problems............. 39
by Roger D. Feldman
11. Privatization: Looking Backward, Looking Forward................................ 42
by Lawrence L. Martin, Ph.D.
12. Cutting the Government in Half: Three Reforms.................................... 45
by Grover Norquist
Federal Update...........................................47
A. Competitive Sourcing Continues to
Expand..................................................... 47
B. Rating Program Performance..................48
C. Senate Budget Committee Approves Major
Budget Reform Bill..................................... 49
D. Defense Business Board—Military Mail... 50
E. Capping Federal Spending.......................51
Local and State Update...............................55
A. Local Privatization Update...................... 55
B. State Privatization Update..................... 60
C. State Bureaucracy Update...................... 64
D. State Revenue Boom Paves Way for Tax
Cuts..........................................................68
E. Surveying the Battleground on Tax and
Expenditure Limits (TELs)........................... 70
F. TABOR at the Ballot Box.......................... 85
G. Trends in Government Offshoring...........86
Surface Transportation.............................. 89
A. Why Mobility Matters............................. 89
B. Reason’s Mobility Project....................... 90
C. Surface Transportation Update............... 92
D. The Many Benefits of Telecommuting.....105
E. Coming to America? A Cautionary View on
Importing London-Style Congestion Pricing........110
F. Virtual Exclusive Busways: Houston
Leads the Way.......................................... 112
Air Transportation..................................... 119
A. U.S. Airport Security............................. 119
B. U.S. Airport Privatization...................... 120
C. Global Airport Privatization................... 121
D. U.S. Air Traffic Control...........................123
E. Air Traffic Control Commercialization
Policy: Has It Been Effective?.....................124
Education and Child Welfare..................... 131
A. Charter Schools Lead Grassroots Efforts
for Choice................................................ 131
B. School Choice Update...........................133
C. The Case Against Universal Preschool....136
D. Driving More Money into the Classroom:
The Benefits of Shared Services................139
E. Child Welfare Update........................... 142
Emerging Issues....................................... 147
A. Rebuilding After a Disaster: Policy
Strategies to Speed Recovery....................147
B. Foreign Management of U.S.
Infrastructure...........................................154
C. The Government Pension Crisis............ 160
D. The Truth About Occupational Licensing
and Free-Market Alternatives................... 166
Environmental Services and Issues........... 174
A. Water Privatization Update.................... 174
B. Supreme Court Issues Murky Decision in
Wetlands Case .........................................178
Telecommunications ................................182
A. Why Governments Should Stay Out of
the Telecom Business ............................. 182
B. The Rise and Fall and Rise of Municipal
Broadband...............................................183
C. Network Neutrality Update................... 190
D. Video Franchise Reform Update.............193
Growth and Land Use................................199
A. Eminent Domain Update.......................199
B. Protecting Landowners From Regulatory
Takings................................................... 202
C. Do School Impact Fees Make Sense?..... 207
D. Denver Launches Permit Reform Effort.. 210
E. Privatizing the Inner City? ..................... 211
Public Health and Safety........................... 215
A. Privatizing Public Hospitals: A Win-Win
for Taxpayers and the Poor........................215
B. New Prison Cost Comparison Study in
Arizona Flawed........................................ 223
C. Federal Privatization Study Demonstrates
Privatization Success............................... 225
D. Texas Axes Criminal Justice Policy Council,
Comparison Continues............................. 227
E. Book Review: Merchandising Prisoners—Who
Really Pays for Prison Privatization?............. 228