Here’s a simple rule. When a politicians says a new program will cost X, hide your wallet because it actually will cost three or four times as much. Or even more.
Obamacare is a particularly painful example from recent history.
Simply stated, politicians and bureaucrats routinely under-estimate costs because they figure once a project or program is underway, voters can be tricked into throwing good money after bad.
It happens all the time in Washington. And it happens in other nations as well.
And even though I’m a fan of decentralization, that doesn’t mean I’m oblivious to the fact that state and local governments are very capable of similar behavior.
Consider, for example, the streetcar project in our Washington, DC. The main problem is that taxpayers are getting reamed. The current price tag, according to a report in the Washington Times, is about $3 billion.
And what are taxpayers getting for that “investment”?
So far, based on a story in one of the city’s other newspapers, the Washington Post, they’re getting long delays.
In the early 2000s, an ambitious band of city officials set out to cut through the bureaucratic mire and launch a vast streetcar network that would be a model for the nation, eventually running 20 to 40 miles or more. The first leg was supposed to open in 2006. But as 2015 comes to a close, officials are scrambling toward their latest goal of opening a diminished, 2.2-mile streetcar line.
But major delays are just the tip of the iceberg.
The Post‘s report highlights how one small part of the project – a maintenance facility for the streetcars – has become symbolic of grotesque cost overruns and waste.
The District is spending three or four times what other cities have to build a maintenance facility for its fledging streetcar system… The “Car Barn” project was originally designed as a simple garage and rail yard for light repairs and storage, with some offices for staff. But it has ballooned in ambition and nearly tripled in cost — to $48.8 million. It will now include a number of pricey and unusual features, including grass tracks for parking the fleet of six streetcars and a cistern for washing them with rainwater. …The District says it…is projected to open in 2017 after long delays. Tucson spent $13 million. Cincinnati’s was $11.5 million. Seattle’s came in at $11.1 million.
I’m sure local taxpayers (plus taxpayers around the nation that also subsidized this farce) will be happy to know they paid for a solar roof and other useless quirks.
Here are some of the details on why costs exploded.
…the building has…become a teaching tool for how public projects can be saddled with immense new costs. The historic designation “prompted an immediate six-month stop-work order,” DDOT said, and required, along with the green building rules, numerous upgrades. Those included using stone and brick materials; adding a saw-toothed roof with skylights; and hiding a streetcar power supply under photovoltaic cells and behind “green screen walls.” …Among the other major additions was an intricate system of turf tracks and paving stones that allow rainwater to drip into an underground vault for storage and filtering before flowing toward the city’s storm-water pipes.
Though taxpayers may think the “drip” is the sound of their money being flushed down a toilet.
In 2011, under Mayor Vincent C. Gray (D), the District estimated it would spend $6.2 million on a maintenance yard and a temporary shelter — basically, a big tent. Then, with the temporary tuneup location in place, the permanent building, additional track and other work in the yard would be finished for an additional $10.7 million. …The yard-and-tent total grew to $10.4 million, DDOT said, including environmental work and hundreds of thousands of dollars to keep some Dean-Facchina workers on the job 12 hours a day, six days a week to speed things up. By last year, estimates for the second phase, including the permanent Car Barn, had risen to $24 million. In July, the city agreed to spend $38.4 million on this phase, bringing the total to $48.8 million. Among the unforeseen costs listed by DDOT are $1 million in storm drainage and $824,000 in “indirects.”
So what’s the bottom line?
Well, the late former Mayor of DC, Marion Barry, is not normally a credible source. And I’m not sure I trust any numbers that came out of his mouth.
But I suspect he ventured very close to the truth when he was quoted in aWashington Times story from 2014.
…the late former Mayor Marion Barry said D.C. taxpayers would be spending $2,000 to subsidize each ride, calling it “a streetcar to nowhere.”
In other words, it would have been cheaper to hire chauffeured limousines for the handful of people who will use the streetcar. Assuming, of course, it ever gets opened.
By the way, there must be something in the local water, because there’s a similar example of grotesque waste on the other side of the Potomac River.
But let’s not just pick on profligate local governments.
Never forget that the federal government is the real expert at waste.
National Review has a very depressing list of ways that Uncle Sam has been squandering our tax dollars.
Federal spending gets more ridiculous every year, and a new congressional report details 100 of the most egregious examples. Following in the footsteps of chronic-waste chronicler Tom Coburn, Oklahoma senator James Lankford published “Federal Fumbles” late on Monday afternoon. …Here are NR’s top-ten favorite — which is to say, most scoff-worthy and absurd — examples of how the government wastes your time, energy, and hard-earned cash.
Here are some of the highlights, though lowlights might be a better term.
…the Department of Defense…approved a $283,500 grant to monitor the day-to-day life of baby gnatchatchers. …the U.S. National Institutes of Health…announced it would grant some hapless grad student $48,500 to pen the definitive history of smoking in Russia over the past 130 years. …the National Science Foundation…gave Massachusetts Institute of Technology more than $400k to ponder the burning question: “Does media choice cause polarization, or does polarization cause media choice?” …five federal agencies alone spent $3.1 billion on workers placed on administrative leave in a two-year timespan. A lot of that cash — $775 million, to be exact — went to public employees banned from their desks for more than a month. …The National Park Service forked over $5,000 to Mars Hill University so it could make a documentary film about a local musician. …$65,473 to figure out what bugs do near a lightbulb…$35,000 for solar-powered beer.
To be sure, these items are just a drop in the bucket compared to entitlement spending.
And these examples of pork-barrel waste also are minor compared to all the supposedly non-controversial outlays that are part of the discretionary budget that funds various agencies and departments.
That being said, keep the above list in mind the next time some politicians says that we need more taxes to finance ever-bigger government.
And never forget that the real waste is when governments spend money on things that should in the private sector or civil society.
In other words, the real waste is about 80 percent-90 percent of what happens in Washington.
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Image credit: TaxRebate.org.uk | CC BY 2.0.
