IMAGINE THIS scenario, which is based, with one change, on something that is actually happening in our state:
The University of South Carolina embarks on a $6.3 billion building project. To pay for it, the Legislature raises our taxes by 1.5 percent. And then by another 2.3 percent the following year. And another 2.4 percent. And the following year, the Legislature raises our taxes by 2.3 percent. It happens the next year, and taxes go up 2.87 percent, then 2.82 percent the following year, and 2.8 percent the year after that.
Over the course of seven years, the Legislature raises our taxes by a cumulative total of 17 percent to pay for the project — and it’s almost certain to raise them several more times.
Did I mention that the university is projecting cost overruns of a half billion dollars? And that the project that was supposed to have been completed next year won’t be ready until 2019?
Would you find that outrageous? Would you consider it yet more evidence that government is gouging us, squandering money, inherently wasteful and inefficient and incompetent — and our colleges and universities especially so? Would you raise the volume on your demand that government be run like a business?’
Well, hold that thought, because that project with a hefty price tag over which we have no say and bad price projections isn’t a USC endeavor. It isn’t even a government project. The project that is already expected to cost $514 million more than originally projected is SCE&G’s new nuclear reactors at the V.C. Summer Nuclear Station in Fairfield County. And that 17 percent cumulative tax increase is the total of the rate increases that have been approved since 2009. (The latest, 2.8 percent, hasn’t been approved yet.)
Utility officials say the cost overrun hasn’t contributed significantly to the rate hikes, which seems bizarre, but let’s presume it’s so. That’s still a projected cost overrun of 7 percent, with several years left for more.
Now, it’s true that SCE&G is not a normal business. It’s a regulated monopoly. That means it doesn’t have to compete with other businesses, which some argue means it doesn’t have to be as efficient as regular businesses. But it also means it has to get permission from state regulators to build new facilities and to raise its rates, and state regulators often reduce or reject the proposed rate increases.
Beyond that, cost overruns are routine in business, and in the non-profit sector. Heck, they’re routine in our personal lives: How many people have ever done a home renovation or built a house without cost overruns? In those rare instances where projects come under budget (much less on time), people make a huge point of bragging about that, because it’s so rare.
I do not mean to suggest that government agencies can’t be inefficient and wasteful in the way they operate — or that legislative bodies can’t be wasteful in the way they appropriate money. Of course they are. And we have a right to get annoyed, and to demand better.
What we don’t have a right to do is pretend that the problem is somehow endemic to government. Inefficiency and waste and cost overruns and bad decision-making are not, by and large, government problems. They are problems of any organization that is run by … human beings.
Human beings, who are inefficient. And irrational. And self-serving. And willing to look the other way when it involves friends. Human beings who from time to time feel like they’ve been doing way more work than they’re getting paid for, and by golly, they deserve to have a nice meal on the boss. Human beings who can get persnickety when they haven’t had a raise in several years, and let their performance drop off.
Certainly there are some businesses — and non-profits and, yes, even government agencies — that are extremely efficient. Most are not. And even with the best, if you call in an efficiency expert, she’ll find ways to do things more quickly and cheaply in nearly any business, or nonprofit, or government. Or in your personal life if you let her.
But that’s not the way we tend to think. When government projects run over budget, we take as a given that government squandered the money, or at least didn’t hold the contractor’s feet to the fire.
Do we assume the same about SCE&G? Do we assume the same about the regular, free-market businesses that go over budget? Do we assume the same about our churches?
Do we assume the same about ourselves? When I added a bathroom and library to my house, did the project run over budget because I was wasteful or didn’t insist that the builder stick to his estimate? Or did some things just come up that neither of us had foreseen? When the work actually started, did I realize that some things that made sense on paper made no sense in practice, and decide it was smarter to fix those problems than to stick with the original, flawed plan?
To put that 17 percent cumulative SCE&G rate increase in perspective, if the Legislature had passed the most aggressive road-funding plan it considered this year — the one to raise taxes by $700 million and not cut them at all — that would amount to an increase in total state taxes of about 8 percent. Less actually, if you subtract the third of the gas taxes that would be paid by out-of-state drivers. It would be the second net tax increase — the only other one was the cigarette tax hike in 2010 — in almost 30 years. Over that same period, the Legislature has cut taxes more than 50 times; the cumulative annual total for those tax cuts, last time I checked, was $2.3 billion.
That suggests that, even if state government is so inefficient and wasteful that you would at times think it’s being run like a business, at least it isn’t gouging taxpayers.
Ms. Scoppe writes editorials and columns for The State. Reach her at email@example.com or (803) 771-8571 or follow her on Twitter @CindiScoppe.