Another (Davis) Closed Shop

California Political Review ^ | 4/22/02 | M. David Stirling

[ElkGroveDan]

Private printers suffer as state agencies are used to reward political favorites.

Under a decree issued late last year by Governor Gray Davis, California requires state agencies to go through the Office of State Publishing (OSP) for their printing needs. No longer are state agencies free to go directly to the lowest responsible bidder to have pamphlets or stationary produced. OSP gets the right of first refusal on all state printing jobs.

This is bad news for the 5,900 privately-owned commercial print shops in California. “Mark,” a composite of those private printers, started his business by investing his modest savings, borrowing against his home, obligating himself on a building lease, signing a contract for printing equipment, purchasing a used delivery truck, and taking out bare-bones fire and auto liability insurance. Starting with one employee, in time increasing to six, Mark pays wages, vacation and medical insurance benefits, and workers’ compensation insurance. He pays income taxes, payroll taxes, sales taxes, and property taxes on his equipment. Through hard work and dedication to customer service, he’s purchased a new truck and upgraded his printing equipment (for both of which he makes monthly payments.) Like many businesses, he’s been sued, but chose to settle rather than risk the cost of going to trial. When Mark finally retires at night, the print shop, his employees, and customers are rarely out of mind. Yet, even with the ups and downs, Mark is thankful just to be in business. Not all entrepreneurs can say that.

But now, thanks to the governor, Mark must confront unfair competition from the Office of State Printing. This 152-year-old agency had plenty of work even before it was granted a near-monopoly on state printing; for decades it provided printing for the governor’s office, the Legislature, and state election ballots. But now it gets first choice of all other state printing jobs.

And not because it’s earned the business. On the contrary, even with its annual $60 million budget of tax-funded resources, state-of-the-art printing equipment, and nearly 500 unionized civil service employees, OSP could not — and still cannot — match “Mark’s” competitive prices, customer service, and responsive production schedules.

From the outset of his administration, Governor Davis made it clear he wanted to give OSP and its unionized employees a leg up on the private competitors who were winning state business by offering quality work at lower prices. A month after his inauguration, he ordered that “All documents printed ... by the Office of State Publishing, or vended out, have the Union label displayed.” With 95 percent of commercial printers being non-union shops, this would bring OSP more state business. But when it became clear that the mandate violated bidding and contracting laws, it was quietly shelved.

Then came last fall’s gubernatorial order. Under the purported concern that some of OSP’s expensive printing equipment and union-waged employees were sitting idle for portions of the year, the governor’s office mandated that department managers could use commercial printers only if “the contract does not cause the displacement of civil service employees.” This proved an effective means of shutting off the $15 million of state printing business that for years had been performed by commercial printers.

There will be hearings in committees of both legislative chambers this week and next that will consider how this order is hurting private businesses.

Competition is fierce and profit margins thin among the state’s commercial printers. Like all people engaged in mostly small businesses, each day they hustle, work long hours, and assume the risks of failure. When they produce the goods and services that enhance our lives, generate the jobs that put food on the tables, and pay the taxes that enable government to provide essential services, they are entitled to the fruits of their efforts. When they fail, there is no taxpayer safety-net to keep them afloat. Meanwhile, over at the OSP, no one loses any sleep worrying about their next paycheck, or their medical and retirement benefits, or paying the bills. And that is why government should not attempt to compete with private entrepreneurs.

[let freedom sing]

Have you had it enough to quit buying gas? Someone suggested that everyone should quit buying Exxon and Mobil, exclusively-- that would force a drop in gas prices. Most people don't care enough about MTBE enough to quit.

[green team 1999]

Rats!