When a municipal agency threatens to cut services if benefits are reduced or pay raises aren't forthcoming, cities and citizens should do what too many consider unthinkable: call the agency's bluff. According to Independent Institute Senior Fellow Bruce L. Benson, they may find a better, cheaper alternative from the private sector.

Consider Oakland, Calif., which is grappling with a $30 million budget deficit. When the city asked that police officers help by contributing to their own pensions, as is done in San Francisco and Los Angeles, the police union said no--not without a guarantee of no layoffs for three years. The city council responded to that rejection by taking steps to replace some police officers with private security workers to patrol high-crime areas.

"Four private patrolmen will cost the city about $200,000 a year--a fifth of what four city policy officers would cost," writes Benson. It's a small, but important step forward." Using the same personnel to make arrests and to respond to auto accidents is a costly waste of manpower and is uncommon in the private sector, Benson argues.