John Locke Foundation’s Mitch Kokai was featured in an article by the Heartland Institute about Salisbury, North Carolina getting out of the internet business ten years after building a taxpayer-funded broadband service that caused the city to issue $33.56 million in public debt.
Mitch Kokai, a senior political analyst for the John Locke Foundation, says governments don’t have the right incentives or expertise to run businesses successfully.
“Government competition with the private sector creates multiple problems,” Kokai said. “First and foremost, government does not operate with the same profit-and-loss incentives as private businesses. Government officials have a harder time determining whether an investment makes economic sense. They can’t judge as well whether an operation is sustainable for the long term.”
On May 8, 81% of voters voted to turn over the operation and maintenance of Salisbury’s municipal broadband network to Hotwire Communications, headquartered in Florida.
Kokai says Salisbury’s voters made a fiscally sound decision.
“The major benefit for taxpayers in this instance is that they will no longer be forced to bail out a money-losing operation,” Kokai said. “It never made economic sense for Salisbury to get in this business.
“Now, taxpayer funds that have been devoted to this ill-conceived project can be diverted to core city government functions or even returned to taxpayers to spend, save, or invest as they see fit,” Kokai said.
Read the rest of the article here.