3 Ways Cities and States Can Increase Revenue

2010 has been a tough year for state and local governments. From furloughs to layoffs to cutting services, the budget situation is dire.

It’s pretty simple when you have a budget shortfall. You have two options – cut costs, increase revenue.

Most of the focus has been on cutting costs but I think there should be a discussion on increasing revenue.

Here’s 3 ideas on how state and local governments can increase revenue:

1) Open up to advertising – There is a fine line of how much advertising government agencies should allow. But for years, there has been advertising allowed whether it is advertisements in public transportation to advertising in airport bins during screening.

There’s a lot of opportunities for increased revenue hear whether it is advertisements in property tax statements (like my Delta check-in boarding pass ads), advertising on TVs at the DMV (in Florida we got free televisions that have DMV info and have a few ads). Yes, there is a line – I’m not sure I want the American Express City of Cincinnati City Hall – but there’s also an opportunity here. And also, this does help innovative small businesses grow.

2) Increase Sales – The government sells a lot of stuff – whether that is hunting licenses, unclaimed property, park passes, public transportation tickets. But the government does not do a good job marketing their services as well as optimizing the sales process.

For example, my local newspapers works really hard to get me to renew my subscription – they send me tons of reminders (paper and email) and also give me option to automatically renew with credit card on file. My state fishing license just expires and I get no reminders, no push to get me to renew. The state could have easily got me to spend more money if they gave me option to renew automatically or reminded me through various channels.

3) Optimize Collections – Ever complained about how hard it was to pay a parking ticket? I just got one the other day and they either wanted me to visit the office during weird hours or mail in a statement. Guess what? That payment still hasn’t sent it. Then, the other day in another city, I saw that you could actually text in payment for a parking ticket. How awesome is that? By lowering the barrier to payment, I’m sure they are increasing revenue.

Amazon learned this a long time ago with 1-click payment. It has to be super easy for people to buy or they will forget or move on. Government agencies could increase revenue by spending time optimizing the collection process thinking like a business on how to make it easy to make people pay their fees There are a lot of unpaid parking tickets, library fees, business/property taxes, and other fees that can ramp up quickly if governments optimized the collection process.

What are other ways governments can increase revenue?

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Stephen Peteritas

Got go with number 1… use the private to prop up the public but still keeping it capitalism. I mean as long as advertisers aren’t in on actual decisions how can it hurt? But there is a fine line there cause you can never become dependent on that money because it could be pulled at any moment.

Joshua R. DeBeary

All three are great ideas. I wish Philly would implement some of them. Especially with our technology infrastructure expanding. I don’t see why we couldn’t implement all three. I will have to check on that.

David Bruce Jr

Here’s one way to increase revenue:

A local government’s website is a high page rank incoming link for a local business. Business success in any municipality begins and ends with ranking in Google local. Reportedly up to 80% of all Google searches are for local people seeking local products or services.

Are you trying to solicit “adopt a road” in your municipality?

Well reward those sponsors with a mention on a government website and/ or government blog. In order for that local company to get value for having donated you’ll have to add that companies website link to the online mention. This amounts to an incoming link from what Google considers an authoritative local website.

David Bruce Jr

Here’s a way to cut costs and increase warm fuzzies with your constituents:

Everybody knows a 311 phone line to constituents to call in to report a non functioning street light, pot hole, dead animal in the road that needs to be cleaned up etc is a good idea: one that costs money to implement.

Do the same thing for free by adding one or more themed Facebook Pages for your constituents to reach out to you. The purpose of Social Media is for them to talk to you, not for you to talk with them.

Facebook pages are free and come in many varieties, the only cost is to have someone who knows how to handle/ admin a social media site. A Facebook Page is not a Facebook Profile and is different from a Facebook Group.

Tom Bullington

The only caution I would have on accepting advertising is the potential of conflict of interest. Let’s say a business that is a major contributor to the city’s coffers comes before the council asking for a variance, or special tax incentives? Would the council be able to make this decision without being influenced by the business’ contributions to the city? Likewise, if a company that financially supports a state government through advertising considers leaving the state, would the state legislature and governor be swayed when making decisions?

Dr Peter W. Beven

Over here in Australia we have tried – with some measure of success – the commercialization of intellectual property developed in procurement contracts and in-house development. Mainly this is under the banner of “ICT” – new systems, content, training products, even processes and methodologies. Sale of licences of this IP has been to firms (who want to turn it into a product for the wider market) and also to other government agencies (at all levels and even by overseas governments). For such government organisations who purchase the license this can also represent a significant cost reduction to them while at the same time earning revenue for the developing and owning organisation.


David – fascinating thought on Google SEO juice

Peter – I’ve seen a lot of that in US universities. Less so in government yet

John McKown

We’ve advocated cities using the business directory application in our municipal CMS as a way to generate revenue. In the past, I think that many cities were afraid to step on the toes of their local chamber of commerce, or main street organization. That is one reason why they didn’t want to monetize their site. Another is that cities need to be fair to all tax-paying businesses in their municipality. Then you also have the situation where there are companies and orgs that aren’t based in the city, but they are licensed to do business there. These fears seem to finally be going away, and I think that is a good thing for economic development.

What we found that works best is to create a comprehensive business directory for all licensed businesses, with a basic listing. Then, if the business wants the SEO link juice that a high pagerank site offers, they can pay for a premier listing, which puts them at the top of their business category, with a heading tag, URL, and title tag for SEO. David is right, muni sites have a great PR value, and that definitely is a plus for businesses. A good CMS (pardon the plug) should be able to offer all this functionality at low or no cost to the municipality.

John McKown – Delaware.Net