Enterprise Funds: If we want public employees to become “revenue conscious” we need incentives that encourage them to make money as well as spend it. Guaranteed incomes create all the wrong incentives. A manager with a hefty budget supplied entirely by the legislature will act much like a teenager with a hefty allowance. Neither will beat the bushes for new ways to earn or save money.
Profit Centers: In reality, there are several good reasons why government should sometimes compete with the private sector. Some services are natural monopolies.
Identifying the True Cost of Services: Most governments have no idea how much it costs to deliver the services they offer. Public managers cannot think like investors or pursue profits if they don’t know their true costs. Governments all over America are unintentionally subsidizing softball teams, golfers, developers, and corporations—because they can’t tell if their charges cover their costs.