Three ways cities and states can increase revenue

By Steve Ressler, Founder & President, GovLoop

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 one-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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Brian Connolly, MPA

Having worked in the public sector for 22 years I can attest to how easy it is to raise revenue. I pose that our government should cut expenses first. After all, government has a expenditure problem not a revenue problem.