In 2005, Sandy Springs (population 94,000) collectively declared political independence from Fulton County and decided to privatize, well, just about everything except fire and police services. In 2012, the New York Times reported that things were going swimmingly: Sandy Springs had no long-term debt, no pension obligations, and was receiving high marks from residents on quality of life and government services.
A key mover in the Sandy Springs saga, Oliver W. Porter, recounted his experiences in a book entitled “Creating the New City of Sandy Springs.” In an essay on the topic, he posited, “Imagine starting a new city of over 90,000 with only two employees. We did it. Imagine improved employee attitude, less cost, more responsive government, decreased long-term liabilities and happier citizens. We did it.”
Now no one, certainly not the Compass, is suggesting that the Cayman Islands mirror the Sandy Springs model, but we are suggesting that our approach must be bold, not incremental, and certainly not politically sensitive to the status quo. A few key numbers explain why:
Since 2001, the number of Cayman’s public sector employees has grown from about 4,000 to 6,000. We don’t need the sharp-penciled accountants at Ernst & Young to tell us that’s an increase of 50 percent, far outpacing the growth of the country’s population.
A January 2011 report estimated the government’s unfunded public pension liabilities at $178 million over the next 20 years.
The government’s unfunded liabilities for public healthcare services is somewhere north of $654 million, a best guess dating from 2004. We don’t even have current numbers and, we suspect, government is too afraid to compile them.
Predictably, but unfortunately, the government’s response over the years to its own fiscal irresponsibility has consisted of more spending (particularly on extravagant capital projects), district-sensitive decision making (especially as it relates to subsidization of Cayman Brac), and an unwillingness to contemplate politically popular but financially distraught enterprises (such as the Turtle Farm).
Despite our fiscal conservatism and zeal for a smaller public sector, we are displeased with Premier Alden McLaughlin’s declaration (see Page One of today’s Compass) that civil servants will not have their on-again, off-again 3.2 percent wage increase restored in the 2014/15 budget.
As we’ve said before, it’s unfair — and unwise — for the government to break its promises to its employees. Additionally, the $5 million to $6 million required for the pay increase basically constitutes a rounding error in the government’s $650 million annual budget.
Further, rather than tinkering with head counts in its 80 core entities and 25 authorities and companies, government would be well advised to eliminate entire entities through privatization or the cessation of many activities.
Our potential candidates for privatization (we can imagine this becoming a popular parlor game in Cayman) might include: schools, hospitals, fire services, waste management, Government Information Services, Radio Cayman, airports and port management, ambulance services, road maintenance and construction, computer services, postal services, and (Premier McLaughlin’s protestations to the contrary), Cayman Airways.
That’s our short list.