Sunday, September 12, 2010

The High Cost of Citizen Badwill

Cities which have been jacking up parking tickets and other fees may not realise the future cost of the badwill they are creating.

In accounting, there is a wondrous category for that ephemeral quality known as "goodwill." That represents the market value of customer/client goodwill and the "blue sky" asset of being a trusted provider of a valued good or service.

There should be a special accounting category for the "badwill" being generated in stupendous quantities by cities, municipal agencies and other local governments.

Parking tickets that were $20 a decade ago are now over $80. Traffic violations can easily exceed $300, and that's before penalties.

My wife was in line recently to pay our city garbage collection fee, which incidentally has doubled in a few years, far outstripping inflation (supposedly negligible). She reported that the room was crowded with irate citizens who were there to pay their $80+ parking tickets.

Many were voicing anger about the poorly marked signs which declared a once-safe parking area was now a "no parking" zone. It might be ironic to some that in this famously liberal university town, the angry murmurings of the citizenry and the calls for protests are rising not in response to international issues but to the exploitation of the citizenry via outrageous parking tickets.

The badwill being generated may well haunt the city for a long time to come. Rather than forthrightly laying out the city's budget and breaking out its costs, and then asking for a tax increase from all residents, the city masks its costs for city employees' pensions and raises revenues by jacking up parking and other fees.

The extra money raised is rather modest compared to the mountain of badwill the city is generating.

When the city is finally forced to come hat in hand to voters for more direct taxes, it may find it has destroyed the goodwill of its residents with rip-off rates and fee increases. The city may find that stripmining its citizens for a couple million dollars has wiped out tens of millions of dollars in goodwill it once possessed.

The badwill it has generated will not dissipate easily. City officials better wise up to the goodwill they are squandering in their self-serving "revenue enhancement" policies and the gargantuan badwill they are collecting with every outrageous ticket and jacked-up fee.

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Posts may be sporadic until 9/15/10.

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