Opportunity Cost


One of the things they teach you in Economics 101 is the concept of opportunity cost. Simply put, opportunity cost is what you pay for something in terms of what you give up to get it.

For example, you could decide to spend $40 on a new shirt instead of using that money to pay for an oil change for your car. The opportunity of buying a new addition to your wardrobe should be weighed against the cost of your car’s engine burning out because you didn’t change the oil promptly.

The concept of opportunity cost can also be a useful way of evaluating the last three years in Georgia’s political cycle.

When Sonny Perdue was elected as the first Republican governor in 130 years, he had a golden opportunity to confront a wide array of problems facing the state without the baggage that has traditionally saddled Democratic governors. Because he was elected without having to kowtow to the state’s traditional interest groups, Perdue had the freedom to take some truly different approaches to issues like taxes and transportation.

Georgia’s tax system is better suited for the agriculture-based economy of bygone years than for the information age economy of the emerging century.

Over the past few decades, lawmakers and governors have approved a crazy-quilt series of tax breaks and exemptions for whatever interest group happened to catch their attention, making the tax system more lopsided and unfair every year.

Perdue had the opportunity to push for an innovative restructuring that would make the tax system fairer to everyone and more reflective of modern economic realities. He chose instead to tinker with the existing system, signing an increase in the tobacco excise tax, an income tax exemption for senior citizens, and more of the special-interest tax breaks for folks like Bernard Marcus.

Another big issue begging for an innovative solution is transportation and the related problems of traffic congestion. Perdue had the opportunity to bust up the entrenched bureaucracies and consolidate the many agencies dealing with transportation ? DOT, SRTA, GRTA, MARTA, ARC ? into a single authority that could figure out the right mix of highways, buses and rail lines to get Georgians moving.

Rather than blending these elements into a cohesive whole, Perdue added to the bureaucracy by appointing yet another transportation group, a ?congestion mitigation task force? that did essentially the same kind of planning that the Atlanta Regional Commission has been doing for 30 years.

Perdue’s priority as governor was to institute business procedures and job title changes that would make state government look more like a corporation. He is especially proud of a new program that manages the state’s fleet of motor vehicles. For the first time ever, Perdue points out, the governor can tell you exactly how many cars and trucks are owned by state agencies.

It’s good that we know how many vehicles the state owns, and it’s certainly commendable if state agencies are operating more efficiently. But the governor may be so busy counting the vehicles in state parking lots that he doesn’t see the cars that are piling up in traffic jams all over our highways and interstates. If you’re stalled behind a long line of SUVs on the downtown connector, you aren’t really going to care very much that the state has 19,172 vehicles listed on a computer printout.

In fairness to Perdue, he was dealing for the first two years with a House of Representatives controlled by the opposing party. He would argue that any drastic proposals for handling those major issues would have been stalled by the House Democrats, and that’s a reasonable argument.

But what if he had made the effort anyway? What if he had started agitating for real solutions to real problems? He at least could have laid the groundwork for the day when his own party gained control of the legislative branch, as it now has.

For every decision that people make on how they will spend their time or resources, there is an opportunity cost. Perdue decided to devote his energies to changing the boxes on state government’s organizational chart. He lost three years that could have been spent attacking major issues that affect every Georgian. How would you sum up that opportunity cost?

Tom Crawford, editor of the Capitolimpact.com news service, covers politics for Georgia Trend.

Categories: Political Notes