Nowthen, Minnesota. Population 4,400, November. The city council met to figure out if they wanted to continue getting police protection from the county sheriff. It would cost them $105,000 for a year. And lots of people showed up to say that they thought it was a waste of money in a rural area like theirs. One woman got mad at the sheriff for suggesting that they needed all the police patrols and all the 911 calls they had been making. You list 1,300 calls per year. And you say things like, a cat in a tree. Oh, my god, I saw a coyote. I've got to call the police. Oh my god, I saw a dog I don't know. I've got to call the police. What portion of those 1,300 calls were actually crime related? It feels like you're trying to scare us-- Not at all. --into thinking we're in the new crime capital of the North. I showed you all the numbers we have. I showed you the burglaries, I showed you the assaults, I showed you the thefts. I understand that. But that adds up to less than 300. So, 1,300, 300. If it'll make you feel better, we have 300 crimes. I'm not sure where you're going. I'm not trying to scare you. No, I'm not, I'm not. I'm just presenting the facts. I'm just saying that-- Springfield Illinois, 2009. Illinois state police do away with their new motorcycle division, thanks to budget cuts. As a result, more residents die on the road. Annual highway fatalities in the state climb from the low 900s to the high 900s. Well, it's extremely disheartening. That's Jonathon Monken, who ran the state police when the cuts happened. He says that in his first three years, the motorcycle division had been a huge success, drove the number of highway deaths down to what they were in 1922. I mean, a lot of people worked extremely hard to drive those numbers down. And that's just frustrating when you see increases of 20, 30, 40. And obviously, when you're dealing with fatalities, increasing by one is a bad thing. I mean it's something that you don't want to see happen. You would think that the very last thing that a city would cut would be police protection. That's one of the most basic things we want a government for. But of course, in this recession, police are on the chopping block in a way that they have not been in decades. And beyond police, over 600,000 state and local government jobs have been slashed since 2008. And at some point last year, after the showdown on whether the United States was going to raise the debt ceiling to make room for more spending, which of course, if you remember, came after one of the many regular showdowns on repealing the Bush tax cuts. And it came before the December showdown on payroll taxes and unemployment benefits. Around that time it occurred to me that as a country we just keep having the same fight over and over again. There's one group of people who believe that the size of government is a real problem, and who think that we should have a smaller government that delivers fewer services and costs us less in taxes. And then there's another group that doesn't think that. Maybe they're not exactly happy with everything government does, but they are not looking for real downsizing. And these two sides just go at it, over and over, fight after fight, political cycle after political cycle. And usually we don't really talk about the underlying question behind all those fights, which is, what kind of country do we want? Do we want a bigger, taxier United States of America, or do we want a smaller, cheaper United States of America? Well, today on our radio show, we bring you three stories where people not only try to answer that question, they put their answers into action in their own cities with dramatic results. From WBEZ Chicago, it's This American Life, distributed by Public Radio International. I'm Ira Glass. Stay with us. Act One, The Sound of Sirens. So let's start in one of these battlegrounds, in a state that is enacting sweeping austerity measures. Where the governor has not only held the line on taxes, he hopes to cut them further. This is New Jersey. As a result of these budget cuts, the city of Trenton laid off 103 officers from its police force in September-- that's a third of their force-- with serious consequences. Sarah Koenig visited them. One great thing, maybe the only great thing, about the budget cuts in Trenton, is that you can park anywhere and not get a ticket. I parked in illegal spots. I ignored meters, even parked directly in front of City Hall three different times. And I was fine. Thieves, drug dealers, carjackers. Apparently they've sensed the same thing. That maybe no one's minding the store. 17 robberies for this week. Out of control. This is Sergeant Mark Kieffer of the Trenton PD. He's been a cop for 16 years. His father was a cop. He clicked through some recent crime stats on his computer. We're having anywhere from 15 to 20 robberies a week. We used to have five robberies a week. We used to have eight detectives in the robbery unit. Now all we have is two there. It seems that if you get rid of one third of your police force, crime tends to go up. Most alarming to Kieffer, the shootings. In 30-- what's it today, the seventh? So in 38 days, we had 32 people shot. We just had two people shot yesterday. I'm talking 32 people hit. That doesn't happen like that. Usually, what's it usually? Maybe once a week you get a shooting. Yeah. Once a week. Not every day. From January, 2011 to January 2012, gun assaults are up 76% in Trenton. Robberies with a firearm are up 55%. Car thefts more than doubled. Break-ins more than tripled. The Trenton Police Department no longer investigates thefts, including motor vehicle thefts. They also got rid of their domestic violence unit. Back before the cuts, the Trenton Police were holding crime at bay. It still wasn't great. For a city of 80,000 people, Trenton had a pretty high rate of violent crime. But other crimes were decreasing. Now the cops are losing ground. And average people are feeling it, and not just in a "I read it in the newspaper" kind of way either. Almost everyone I talked to in Trenton had a crime story about someone they knew or about themselves. The other day-- did you hear about the shooting last week? Well, I was there. You know what happened to me, don't you? That's a guy named Richard who didn't want to give his last name. What happened? What happened? We had to dive out in the street over here when he went by. I hit my head on the curb. Wait. What happened? Drive by. Richard's lived on this block for 50 years, and nothing like that had ever happened to him before. One guy told me a bullet went through his office window, right where he sits. Another told me about a woman he was chatting with at the bank, who told him she'd just been mugged, at 10:00 in the morning. Another told me about a fatal shooting on Route 29. And then he told me the guy who was killed was his brother. I heard this stuff in the so-so neighborhoods, and I heard it in the good neighborhoods. Didn't matter. There's been muggings, and there's been shootings. Right here? There's been break-ins. Yes. That's Marge Caldwell-Wilson, a Trenton city councilwoman. We had a rash of burglaries. During the day while people were home they were stealing copper downspouts and running down the street as the neighbors were yelling at them. So that's how brazen things are happening. In this neighborhood that was happening? Yes. Yes. I keep asking if she's talking about her neighborhood, because her neighborhood is beautiful. Historic Victorian townhouses, lovely clean streets. I saw a Volvo station wagon parked across from Marge's house, two car seats in back, a New Yorker magazine in the passenger seat. And this isn't just happening in Trenton, which was the last city in New Jersey to lay off police, by the way. Camden lost 168 cops. Atlantic City, 60. Patterson, 125. Newark, 167. According to New Jersey governor Chris Christie, all these cuts are due to a clear culprit. Runaway salary costs. Three out of every four dollars that are spent now in any municipality or county is spent on labor costs. We can't afford it anymore. Since he took office in 2010, Christie has wrestled New Jersey's finances into submission, largely by facing down the state's public sector unions. Cushy contracts for teachers and cops, millions paid out in unused sick days, Cadillac health plans, birthdays off with pay. Outrageous, he said. This is Christie at a VFW in Middletown, New Jersey last year, when a cop in the audience complained about having to pay more for his health care. My answer to you is, it stinks. But it's reality. And no one can be shielded from this reality anymore. Not police officers, not firefighters, not teachers. We have to reorient our expectations here. This is not 10 years ago. This is not a booming economy with 5% and 6% and 7% growth. We cannot afford this stuff anymore. We can't. Hence the police layoffs. Thousands of them. As Christie calls it, the new reality. Trenton's new reality is that before Christie took office, the city received $36 million in what was called special aid to struggling municipalities. This year, Trenton's getting $22 million. And that aid has been re-branded. It's now called transitional aid. The idea being that cities eventually will wean themselves off it. Next year Trenton stands to get less. But a few days in Trenton makes you wonder if this new reality is tenable. Can the city even function like this? Listening audience, I think smaller government is a myth. This is a guy named Michael Walker. He's not an elected official or think tank guy. He's not a businessman. He's a regular working-stiff taxpayer in the city of Trenton who's going out of his mind with frustration. And I think anyone who gets up there and tells you we're going to shrink the size of government, I think they're crazy. They're crazy. We have a hobbled police department that cannot keep up with the level of crime that is going on in our streets. We have a Department of Inspections that cannot keep up with the level of requests for plan reviews and for permits. We have a Public Works Department that cannot keep up with the filth that piles up in our city. He's become one of the most eloquent and loudest voices criticizing the state of affairs in Trenton, especially the police cuts. In the past few months he started a blog, published an editorial in the local paper, where he's also quoted pretty regularly. I first saw him on YouTube back in September. That's when the city announced the police layoffs. And when Michael did something he's never done before. In a baggy black t-shirt, he went to City Hall for a council meeting, and delivered a speech that had people laughing and clapping. And he said something that's practically heresy in New Jersey, or really, anywhere else. And to be honest with you, I'd be willing to pay more taxes. And I know that this is not sustainable. I'm willing to pay more, because-- I'd be willing to pay more taxes. In Trenton, to hire back 100 cops would cost about $5 million. So if your house is valued at, say, $100,000, it would cost you another $340 on your tax bill. Happy to pay it. That's Michael again. We talked in his car while we were driving to his house. Keep in mind, he's not a rich guy with money to spare. He made $34,000 last year. Really? Happy to pay. $340 is nothing. Do you know what we're paying for basic cable? It's crazy. I mean, I'm not kidding you. Do you know what I'm paying for my cell phone bill every month? And do I really need to be getting minute by minute alerts through Facebook? This is a small price to pay to get more cops on. Yes, taxes are too high. But taxes are too high for a variety of reasons. Because the money is not being used properly. But if the mayor said, look, this tax increase is designed to bring back all of the cops that we laid off, I'm all for it. In a heartbeat. Matter of fact, I'll send him a check for $350 now. Well, but nobody's suggesting this. Right? No one. No one has the balls to suggest an additional tax increase to bring back the cops. Is raising taxes an option to try to pay for those extra cops, to try to raise that $5 million? Absolutely not. Absolutely not. This is Marge Caldwell-Wilson again, the city council member. The tax base in this city is so small that the burden on the taxpayers is huge. And we cannot, we cannot increase property taxes any more. Not only will we drive people out of the city and shrink the tax base even more, but it would drive businesses out of the city. And we are at the point right now where we're bleeding, and we can't afford to run anybody else out of town. Trenton Mayor Tony Mack said much the same thing when I asked him. No. No. I mean, I think people are taxed out. When I go out and I speak to residents, and a lot of them are on fixed incomes or senior citizens, and they're just plain and simple saying, "Mayor, I cannot afford another tax increase. I cannot afford to pay higher taxes." And I understand. The city of Trenton, like all cities and towns in New Jersey, has only one tax it can levy, only one way to raise big money. Property taxes. There are no local sales or income taxes in New Jersey, just property taxes. The highest in the nation. The average New Jersey household spends nearly triple the national average on property taxes, which are regressive, by the way. They hit middle class and poor people hardest. In Trenton since 2005, the average tax bill has gone up by 42%. Obviously no one in Trenton wants to pay higher taxes. On the other hand, it's hard to imagine anything getting better with this amount of crime. Who's going to move here, invest here, open a business here? So I asked a couple dozen people, would they be willing to pay the extra, say, $340 in property taxes if it meant hiring 100 more cops? Their answers were all over the map. There were the absolute yeses. It's worth it. It's worth $300 and more. I mean, when you can live and just go to sleep at night, and be safe and comfortable. And yeses with conditions. I would be willing to pay higher taxes for police officers who were willing to live in Trenton. Stop whining about the dangerous job they do. They knew it when they took the job. Yeah. Then I might consider higher taxes. Then there were the absolute nos. Would you be willing? I wouldn't. No. No. Too high now. And I think these police officers, I think they're rude. They're ignorant. They're not friendly. Do you know what I mean? There were nos that went one step further. No. I feel that they should burn the city down and start over again. That's the way I feel. And there were the good natured nos, who were legitimately baffled. No. Because what are they doing with the taxes we pay now? That's John Mastoras, who owns a popular 24-hour diner in Trenton. The day after I left town, a guy with a gun tried to mug one of his bus boys right outside the front door. Back when he bought the business five years ago, his property taxes were around $5,700. And Trenton could afford the cops back then. Now he pays nearly $11,000, and suddenly Trenton can't afford them. I mean, like I said, before, five years ago, used to pay almost half the amount of the tax we pay now, and they have those cops. Now we pay double and they don't have those cops. So what did they do with the money? That's really a good question. Which leads me to the most common answer I heard. Yes, I would pay more taxes, if I knew it would actually improve the city and make it safer. But I don't know that. If I could pay to-- Yeah. I would pay higher taxes if I could have more police and I could have a better school system. But if I can't have either one of those things, then why should I continue to live here? And I have thought about moving. And that's my plan for 2013 is to sell my house. This is Talaya Stevens. She's a social worker for the state. Young, professional, a parent, a homeowner. The very taxpayer Trenton officials are worried they'll scare off. They're right to worry. If I paid another $1,000, I could live in Lawrenceville, I could live in Ewing, because their taxes are just as high. And I could get a better school district. These are towns right outside Trenton? Right outside of Trenton. Now, people always complain about their government. Right? They always say they don't trust them to spend their hard earned tax money. That there's too much waste, too much incompetence. But in this case, they're justified. One state official characterized Trenton as the most mismanaged municipality in the entire state. And not by a little. By a lot. The dysfunction in Trenton, a mountain of blame for it, is laid on Mayor Tony Mack. Everyone I talked to said the mayor was either not up to the job, or making things worse. That he fired good people and hired terrible ones. His deputy mayor and chief of staff was arrested trying to buy heroin after just seven weeks on the job. Mack's half brother, who worked at the water plant, was caught stealing city materials. He's about to go to jail. His housing director quit after it came out that he had a theft conviction. The list goes on. The list really does go on. This is the worst I've seen the city, ever. Ever. Ever. The worst. This is Tracey Syphax, effects of a successful real estate developer. And he'd happily pay more property taxes to hire more cops. But not while this mayor's in charge. I hear all the time people saying, 'Well, the governor should give this mayor the money he needs." Who would do that, when you have a mayor that has had four police directors in two years? Eight business administrators in two years. Two law directors in two years. I mean, who would give money to that? That's like me giving money to my five-year-old granddaughter, and expecting her to do the right thing with it. So that's it. Trenton isn't going to get more money from taxpayers. It's not going to get more money from the state. Crime is rising, and now there's talk of closing fire stations. And people in Trenton have no confidence their government can stop this downward spiral. And you can understand why. So they lock their doors, pull the shades, maybe turn on cable. Which, for say, $159 a month, would pay for about 600 more cops in Trenton. Sarah Koenig is one of the producers of our show. Act Two, Dream Come True. So we now live in a world where the idea of raising taxes simply will not be considered in most American communities, even in places where taxes are much lower than they are in New Jersey. And the one person who arguably did the most to get us here, who created the political reality that you and I and President Obama are all living in today, is Grover Norquist. Each Wednesday, he holds a meeting where dozens of conservative political groups come together and share their plans. He created his own group, Americans for Tax Reform, in 1985. A year later came his biggest and most successful invention. He started asking every Republican running for national and statewide office to sign a pledge never to increase taxes. At this point it's just what you do as a Republican candidate. Such a given that even a fake candidate like Stephen Colbert, four years ago, when he decided to run for president, he started by having Norquist on his show and signing the pledge. We would love to have your support. Here we go. "I, Stephen Colbert, pledge to the taxpayers of the United States of America that I will, one, oppose any and all efforts to increase the marginal income tax rates for individuals and or businesses, and two, oppose any net reduction or elimination of deductions and credits unless matched dollar for dollar by further reducing tax rates." I have no problem signing that, sir, because I don't know what any of that means. Thank you so much, Grover Norquist. Holding the line on taxes, preventing lawmakers from approving new taxes, Grover Norquist told me, is a way to advance his bigger goal, to reduce the size of government. As long as tax increases are even part of the national conversation or state conversation or city conversation, you never have a conversation about reforming government. It's when you say taxes will not be raised that you then look around and go, do we have to do everything we've been doing? Do we have to do it the way we've been doing it? This, of course, is exactly what lawmakers at the federal, state and local level have been doing for most of this past year. They are living out the scenario that Grover Norquist envisioned years ago, to squeeze the size of government. The most famous thing Norquist ever said was that he wanted the federal government so small that you could drown it in a bathtub. But at some point in the 1990s, he named a more achievable goal-- half. He wanted the federal government to be half the size it was. And over the course of the Clinton administration, he says, with Republicans in the house, we seemed to be on our way. The federal government shrank significantly. You've said in the past that your goal is to cut the federal government by half. Is that still your goal? Sure. Let's make a list of things that the government's doing today that make the world a worse off place, and stop those, for starters. And then what would that be? Like, what would you do away with? Like would you get rid of all entitlements? What would you do? What does it mean? I'm in favor of reforming government to become smaller rather than some sort of procrustean bed where you chop off people's toes to make people fit in the bed. And frankly, I think if you talk about reforming government, Utah just passed a law. And the law says, all new hires, state and local government in Utah, will have a defined contribution pension, a 401(k). Here's your pay, here's 10% of your pay to go into a 401(k). 12% if you're a policeman or fireman and are expected to retire earlier. Are you following this? In other words, instead of a state-run pension plan, the state puts 10% to 12% of your salary into a personal retirement account for you. An account that's yours. That you control. A 401(k) like lots of people have already. And there's no Ponzi scheme. Almost all of the state and local pensions are out of whack. The money's not there to pay people as it was promised. If you moved all government-run pensions to defined contribution, you would dramatically reduce the unfunded liabilities of state and local government, which are eating up more and more of state and local budgets. OK, I don't know if you noticed what he just did there. When I asked him what he would get rid of to shrink the government to half of its size, he launched into describing this very sensible sounding reform that's going on in Utah. He did this over and over. I asked him four times. Spent 17 minutes of our 45 minute interview trying to get him to give me a list of cuts which he never gave me. Can I ask you, do you feel hesitant to get into sketching out a picture of, like, here's what the government looks like when it's radically smaller? Because it alarms people, like, when you sketch that out. And it's better to talk about, here are some concrete things we can do that everyone would agree on. Well, I think you want to talk about things one at a time so that it's clear. We're not talking about doing some sort of mad experiment. We're talking about taking a look at things that have worked in other states and giving people options. Later I talked to another small government guy, Len Gilroy, the head of government reform at the Reason Foundation. And he said to me that this isn't evasiveness. He said that, as a practical matter, voters do not want to take a big axe to social security or Medicare or other popular programs. So why even speculate about a world where that could happen? He said guys like him and Norquist don't have a secret list of government budget cuts in their back pocket. What they have is a list of reforms, like this law in Utah that would make government cheaper. Some of that stuff, like the Utah law, seems market tested to sound reasonable to most people. Other stuff, like breaking the backs of public sector unions, which Grover Norquist can go on and on about, is as divisive as it gets. The best way to reform the cost of government is what Scott Walker did in Wisconsin, which was to undo tenure. Here's something that might surprise you. Our nation's current mania for cutting the size of government, keeping taxes low, is coming at a moment when our tax rates are, in fact, at one of the lowest levels in the last 70 years. The top personal income tax bracket paid over 80% of its income in the 1950s and '60s to the government, 70% when Ronald Reagan took office, 39% at the end of the Clinton years. Now it is 35%, with lower tax brackets paying less, of course. Our taxes make up a smaller portion of the gross domestic product than taxes in most industrialized countries. When you look at it this way, it can seem very strange that this is a time when politicians are so unwilling to raise taxes, with all kinds of unintended consequences to that everywhere. Can I ask you to talk about just the messiness of what's happening around the country as people are cutting budgets. So for example, in New Jersey, we have these cities, Camden, Trenton, Newark, where in order to make their budgets work now without raising taxes, they're cutting huge percentages of the police forces. And crime is going up. When you see that, when you hear about that, do you just feel like, OK, well, this is just the clumsy first steps of something? What is your take on that? When you try and cut the size of government without reforming it, you have serious challenges. In New Jersey, the examples you used, organized labor in the public sector is very strong. And so you can't come in and say, could we work different hours or different days? Or how about that we lay off the 10% incompetent guys on the police force? No, you lay off the most recently hired guys who may be the most competent. In fact, this is exactly what happened in Trenton. They fired all the younger cops and filled their slots by demoting 2/3 of their supervisors. It was pretty ham-fisted. Here's just how ambitious Norquist is. Back in the 1990s, with Bill Clinton in the White House and Republicans in the House of Representatives, the goal that Norquist and his allies set for themselves could not have been bigger. To completely realign the politics of the United States. To use their skills with talking points and issues and candidates to push the entire country towards a solid majority that would vote for smaller government and lower taxes. A great article about Norquist in The New Yorker in 2005 ends with Norquist running into somebody who he knows on the street, who asks him, "How's it going?" Norquist replies-- and this does not seem like a brag but just a statement of fact the way he says it-- "We're winning." When I interviewed him at his office two weeks ago, he said this past year, he has definitely been feeling that same way. His side is winning. After all, he said, 2011 was a year where you would normally see a tax increase. The government needs money because in a recession it is bringing in way less revenue than usual. There's a massive shortfall. And for two years, to help the States cope with the shortfall, President Obama's stimulus package sent billions to all the states. But that just ended. So you're supposed to have 50 states going we must raise taxes to replace the stimulus spending. And at the federal level, hey, let's raise taxes. And both at the national level and at the state level, 45 states said no to tax increases and only five raised taxes. So if it was just Washington, you'd go, OK, the guys in Washington DC traumatized by Obama's spending. But when 50 states are having the same fight and in 45 of them you don't raise taxes and you do cut spending, that's very positive. But it's not just about taxes. For Norquist and his allies who want to see a radically smaller government, these past three years have been especially promising. He says he is seeing a shift in the Republican Party that goes beyond taxes. Up until the Tea Party movement, there was too much of a willingness of Republicans to allow spending to drift upwards. That was the Bush story. Bush got the message, don't raise taxes. He didn't get the message about spending less and reducing total government spending from where it was. So the Bush years were lost years for limited government. It took the shock of Obama's massive spending increase to scare voters enough to create the Tea Party movement, who then entered the modern Republican Party and revigorate it. And saying to the modern Republican Party, stop spending so much. Big, big change in the modern Republican Party. That's one of the things that gives me real hope. From Christie's New Jersey to Scott's Florida to Kasich's Ohio, to Boehner and Mitch McConnell in Washington. There's nothing you can't do in the United States over a 25-year period. With enough time-- that's Archimedes' lever, is time-- you can do a lot of stuff over time. A generation, Norquist says. That's his time frame. Give him 25 years to radically reduce the size of government. After all, he's already on his way. He's winning. Coming up, a city employee rises from the ashes like a phoenix. That's in a minute, from subscriber Public Radio and Public Radio International, when our program continues. It's This American Life. I'm Ira Glass. Today on our program, what kind of country do we want? At this moment when so much of our politics seems to be obsessed with how to cut back on government, we have stories of people choosing whether they want more government or less, more taxes or fewer, we have arrived at Act Three of our show. Act Three, Do You Want a Wake Up Call? In Colorado Springs, Colorado, when they had budget troubles a couple years ago, the city did something that made them momentarily famous around the country. They turned off a third of their street lights to save electricity costs. Since then, other cities have followed their lead. But when this first happened in Colorado Springs, people like Jamie Lindsay didn't know what was going on. We were just outside playing basketball, and then, all of a sudden, we were like, hey, why isn't the street light on? And the girls were like, what's going on with the street light? Colorado Springs didn't stop at cutting streetlights. Public restrooms were locked, bus service slashed. Those nice little flower beds in the median strips of the streets downtown, wilted, dead. The amazing thing about Colorado Springs, though, was what it decided to do about this mess. They did something different from any other city. They decided to live the conservative dream, keep a smaller government, give the free market a chance to handle some of these city services in some very unusual ways. Robert Smith travelled to Colorado Springs and reports on the results of the experiment. The residents of Colorado Springs should've seen it coming. When the recession hit, the city gave everyone fair warning. Here are the things we have to cut-- police, fire, those beautiful parks all over Colorado Springs. All of this could be gone, the city said, if you don't vote to raise your taxes. I don't think I took it very seriously. This is Bo Sharifi. He and his wife Sara and their two kids live up in the foothills of Colorado Springs. As soon as I hear government, oh, we need more money, I don't know. I guess I kind of automatically assume, yeah, there's probably some other things you could probably cut before firemen, policemen, city lights, and that sort of thing. So when his street light went dark, he didn't put two and two together. Being the Good Samaritan, I called the city. And I was like, "Hey, you need to come out and fix this light." They're like, "Oh, yeah. You remember that tax increase you didn't vote for?" I was like, "Uh, maybe." The guy on the phone explained to Bo how life was going to be in Colorado Springs from now on. If you want your street light, he said, you have to pay for it. For $125, the city would send someone to Bo's street and turn back on the electricity. $125. You could pay by credit card. For Bo and his wife Sarah, it was hard to believe at first. It seemed like some kind of scam, some kind of payback from the city. Because it felt like, in a way, by shoveling out $100 to turn on a street light that we kind of felt was supposed to be on anyway, that it was giving them what they wanted. Giving who what they wanted? The city. I think people were just kind of ticked. The Sharifis and their neighbors said fine. We will pay for lights ourselves. And hundreds of other people around the city did the exact same thing. Colorado Springs became an unusual place, a city where the people who could afford streetlights paid for them, a la carte. Others lived in the dark. It was like the capital of some very snowy, unusually affluent third world country. You could see it driving around. Colorado Springs was stepping away from one of the things that we take for granted in most American cities, that we're all in it together. At least when it comes to basic services. And it wasn't just streetlights. Alison Foster lives next door to a park. No more trash cans, no more watering. Alison asked her neighbors for donations. And if you thought $125 for streetlights was expensive, get this. Adopting a city park, $2,500. They put the trash cans back after we sent in our money. To some people, that's going to sound like an extortion racket. Yeah, I know, I know. It did after I just said that. The money, by the way, was for trash cans and sprinklers. But the neighbors had to collect and haul the garbage themselves. In the end, I think a lot of us felt like, OK, how long are we going to have to do this? And when is the city going to pick this up again? It's no accident that Colorado Springs is the place where all this happened. Colorado Springs is not just conservative, it is famous for being conservative. It's the home of Focus on the Family, evangelical churches like the New Life Church, four military bases, Air Force Academy. It is in the most right-leaning congressional district in all of Colorado. Add to the mix outdoorsy types, mountain bikers, ex-hippies, and you get this kind of pioneer leave me alone vibe around here. The citizens of Colorado Springs didn't just believe in limited government, they made it law. 20 years ago they passed the Taxpayer Bill of Rights. TABOR, everyone calls it. And TABOR-- you may have heard of this because other states have put it on the ballot. But it started right here in Colorado Springs. Under TABOR, if you want to raise or impose any tax at all, you have to get the voters to approve it first. Our voters very rarely will support a tax increase. This is Colorado Springs City Councilwoman Jan Martin, one of the people who deals with TABOR day in and day out. TABOR is like a set of handcuffs for city government. It limits how much you can grow your budget, makes it hard to shift money from one thing to another. The city survives mostly on sales tax, which is great when the town is filled with tourists, right? All those hikers and mountain bikers buying energy bars. But when a recession comes along, living off sales tax is a disaster. What we experienced when the downturn occurred is, immediately, people stopped buying, which meant our dollars dropped faster than most communities. And we crashed and burned almost simultaneously with the economic downturn. In 2009, tens of millions of dollars the city was counting on didn't materialize. Jan believed TABOR only gave her one choice. She had to ask voters for the tax increase you heard about. And this wasn't easy for Jan. She's a Republican. She owns her own business. She has an MBA in finance. But she thought, I just need to be straight with voters about the situation we're in. She said, look., the city needs to raise $28 million. That means the average homeowner would have to kick in about $200 a year. To go before the voters in the middle of an economic downturn, I will admit, it was pretty gutsy. But I really felt as an elected official I owed it to the general public to give them an option before the cuts were made. It wasn't even close. The voters in Colorado Springs said no way. Nearly 2/3 of them voted against the tax. The next morning when I got up, my email box was filled with the most vile email messages I personally have ever received after five years on city council. Accusing me of destroying our city, and how dare I bring this forward at a time like this. And how crazy I was and how stupid I was. That is the part that stunned me. And that's how the Colorado Springs experiment began. With government and its citizens bickering back and forth, mean, resentful. And wondering if someone could come up with a better way. Now everything might have stayed like this if not for one man, up on a hillside above Colorado Springs watching this whole drama. He's a private guy, usually keeps to himself and his own business. But he was about to write a manifesto. A blueprint for how the city could solve all of its problems. I'm Steve Bartolin, and I'm the president and CEO of the Broadmoor Hotel in Colorado Springs, Colorado. Now when I first heard about Steve Bartolin, I thought, why would the city council, or anyone really, listen to a guy who runs a hotel? Well, the answer is, this isn't just any hotel. Welcome to the Broadmoor. The place that you may have thought existed only in your grandest dreams and fondest imagination. That's the promotional video. But my producer Brian Reed and I had to see this place for ourselves. Welcome to the Broadmoor, Mr. Smith and Mr. Reed. One of the bellmen, Dan Saluski, walked us around the grounds. Though, really, it's more like a small city. You can do about anything you want here. 3,000 acre property, three championship golf courses. 13 restaurants, 24 stores, a transit system. Our shuttles will take you anywhere on the property including the zoo. Plus the whole place has this fragrance that hangs in the air. They pump it in. It's like lemon sage something. And when I asked the front desk about it, I was told the perfume has a name. The smell of the Broadmoor, and I'm not making this up, is called Optimism. I've had a lady, when I opened up the door, she cried. It just was absolutely everything that she thought it was going to be, staying at the Broadmoor. So, yeah. I finally understood. When the CEO of Shangri-La writes a manifesto, people pay attention. Back in the city's dark days, as the parks were turning brown, the Broadmoor remained green and lush. And Steve Bartolin was up here watching what the Colorado Springs city council was doing. And he was not happy. The Broadmoor is one of the city's biggest taxpayers. And Bartolin needs Colorado Springs to be appealing, to look good, if he's going to attract tourists. What they had done was say we need a tax increase. The citizens voted it down. So it's one of these things where we'll show you. Now you're not going to have streetlights. And we're not going to water our parks. It seemed ridiculous to me, we can't water our own parks. And that generated a lot of negative publicity on the national level, that we were just rolling up the doormat and closing for business. And Bartolin thinks to himself, this is certainly not the way you would run a hotel. And then he has this kind of crazy idea, this thought experiment. What if Colorado Springs did run more like the Broadmoor Hotel? Think about it, Bartolin muses. They're both in the same business, providing customer service. I look at our business. I mean, we have about the same number of employees as the city. And I look at us as a service delivery organization, that's what we do. How do you deliver the highest quality of service in the most efficient, cost-effective manner? There's an art to doing that. And that was kind of where I was coming from. Maybe there's another way to approach this. Now Bartolin knows there are big differences between a city and a hotel. But he starts looking at the city budget, and looking at the Broadmoor. Back and forth. And writing down actual specific comparisons. Why does the city let employees rack up sick days year after year, he wonders. You'd never do that at the hotel. And why does it take 81 people to run the computer department at the city? There are only nine computer guys at the Broadmoor. But the biggest difference Bartolin notices between Colorado Springs and the Broadmoor Hotel, the thing that just jumps out at him, is how much Colorado Springs spends on its employees, particularly on health benefits and pensions. They're running a 70% labor cost, and we'll run a 35% labor cost. Meaning that their employees are twice as much of their budget as they are for you? Correct. Not saying it should be on an equal basis, but that seemed like quite an extreme. I was shocked. I said, it's over. I mean, you don't have a chance. What do you mean, you don't have a chance? You can't run an organization with a 70% payroll. Any business person could look at that and say, Jesus, we're going to be out of business in 2014 at this pace. He writes down all these cost comparisons in an email. A private email, Bartolin stresses, meant only for the people who run the city. He put "City Budget" in the subject line, and he gets specific. The city needs to lower its starting wages. The city should require employees to pay a bigger share of their health insurance costs. And on top of all of this, Bartolin tells the council the city should hire private companies to do the things that it used to do. Contract out everything that is practical, he writes, with sharply negotiated pricing. Now, none of these ideas are new. Privatization is going on all the time in places run by Republicans and by Democrats. But the way Bartolin framed it, it was compelling. And besides, who wouldn't want to live in a world like the Broadmoor? The email reeked of optimism. I looked at it and I did some editing once I had it drafted. And then I thought, should I send this or not? Why did you not want to send it? Well, who wants to ruffle feathers? But then again, I thought, hey, it's just going to the council members and the mayor. Maybe this is a perspective they need to hear. Maybe it'll help. And, ah, what the hell, I'd send it. I was sitting in my office, and I think I had just gotten my coffee, and an email came across. And I read it, and it was, wow. This is it. This is not the mayor, this is not a city council member, this is in fact Chuck Fowler, a Colorado Springs businessman who barely knew Steve Bartolin. He was one of the thousands of people who read Bartolin's private email after it was forwarded all over the city. And I just said, holy cow, I wonder who else has gotten this. And I started making some telephone calls. And had other people gotten it that you know? Yeah. Yeah. In fact, I was late to get it, which I'm not too happy about. Before long, the Colorado Springs Gazette printed the email in full. For the people here fed up with city government, this was the answer. People wrote letters to the editor preaching from the Bartolin text. They demanded the city council act on the advice. Why isn't the city listening to this man, they asked. Why isn't the city being run like a five star hotel? All of our citizens can't live at the Broadmoor. And all of our citizens, as much as they would like to, it's just not an option to have that quality of life in a community like Colorado Springs. City councilwoman Jan Martin says she tried to explain. The city has to hire people with a little more training and experience than at a hotel-- city engineers and managers, police officers. Remember, Martin's a fiscal conservative. But weirdly, she found herself defending the size of local government. She says there's reasons the city payroll looks so high. The pay has to be competitive with the other city governments. Otherwise, no one would come to work for Colorado Springs. And the city doesn't control its own pension costs. Those are mandated by the state. But no matter how much Jan Martin argued, the Bartolin revolution had begun. Chuck Fowler, the guy who was so impressed with the email, started to mobilize his fellow business people. A group began meeting privately in an oak paneled room in a house once owned by the man who built the Broadmoor. They called themselves the city committee. And the committee spent hundreds of hours going through the city's books. Fowler says they built a database and ran a computer analysis of the budget. They invited city officials in to talk frankly behind closed doors. We've had a parade of people coming in here including the entire senior staff of the city sitting around this table discussing this. When you describe this, I can't help but think that this was almost a shadow city council. We consider ourselves to be unpaid consultants to the city and to the elected leaders. Their message to the city was clear. Colorado Springs has to do something about the cost of all these city workers. If it doesn't, they said, the city will run out of money in the next decade. One person who heard this message was a commercial real estate agent named Steve Bach. Bach ran for mayor, touting many of the city committee suggestions. Steve Bartolin even threw him a fundraiser at the Broadmoor. And Bach won. Voters also approved a whole makeover of city government that gave the mayor new powers to hire and fire and veto spending, just like a CEO. Bach's been mayor about nine months now. I want our city government to be fiscally sustainable for the long term. I want to improve customer service, and I want to retain great employees. This is sounding a lot like the Broadmoor. Well, they do a good job of that there. Bach's trying several things straight out of Bartolin's email. He's making city employees pay more for their health benefits. He's called for a pay freeze. Bach's talking a lot about outsourcing basic city services, too. If something can be done better by a business or a nonprofit, then good riddance. He started to look at how he might contract out the bus system for cheaper, maybe even pay cab drivers to haul around people who don't have cars. The city hospital is up for lease or sale. The first place you can see this new privatizing agenda in action is the city parks. Last spring they contracted with landscaping firms to mow, edge and trim. So, did it work? What happens when you privatize this guy? My name is Roland Hawkins. I live here in Colorado Springs. I'm married, got a 16-year-old boy, got three dogs. And I got a jeep I want to sell. You guys interested? We visited Roland at his house in a nice old section of Colorado Springs. He leads us through his garage, past the jeep, and into his basement rec room. The walls are lined with thousands of records. And he takes the one easy chair right in the middle. Roland lays out his whole story. He began as a seasonal worker in the parks, back in the good times, sitting on a mower all day for $7 an hour. Then he got his big break. Full time city employment. My pay doubled almost immediately from seasonal to permanent. OK? And then I must have got five raises, which just blew me away. I just couldn't get over it. There'd be one, and then a couple of months later I got another one. I've never worked in a place like that before. It was great. I loved it. Why were they giving you raises? I was good. Roland could have been great for all we know. But that didn't matter, because the pay raises he was getting were automatic. I know it seems extreme, but we checked this all with the city. Roland got 10 raises in five years. He went from making $29,000 a year to more than $42,000 a year. 42K. It's not like he's a union member or anything. It's just the way the city worked. I knew there was going to be raises, but not in the way they came all of a sudden, man. It was like a landslide. You know? I kept wondering how can you do this? How could this go on? I mean if they're doing it to me, they got to be doing it to the next guy. How long they can do that? I guess you thought out the answer. Yeah. And that's why you're here talking to me, right? His 10th raise was his last. At its height, Colorado Springs' parks budget was more than $19 million. After voters rejected the property tax increase, it was slashed to just $3 million. A month after the vote, Christmas 2009, Roland and dozens of his colleagues were fired. By last summer, the workers had all been replaced. The city came up with some more money to spend on parks, but it went straight to private landscaping companies who could hire their own guys. Guys who weren't going to get all those sweet pay bumps and benefits. So who was the unlucky bastard who took Roland's job for less money? My name is Roland Hawkins, and I got a jeep I want to sell. You guys interested? That's right. Private Roland replaced public Roland. The same thing I was doing for the city. Exactly the same thing. Equipment operator. I was mowing. How weird is that? You're back doing the same job. You know what is really weird-- I thought so too, that it was kind of odd. But what was really weird is, I ended up in the district where my old supervisor was. That's the weird part. You were working kind of for the same guy, way up above. Yeah. Except in a private firm. Yeah. It was kind of awkward at first. We had Roland walk us through the differences between his old job and his new job. We talked to his employers, too. The landscaping firm definitely got Roland to do the same job for a smaller paycheck. They paid him around $17 an hour, rather than the $20 or so he was making at the city. That's $36,000 a year private versus $42,000 a year public. The private firm was also saving money on benefits. The city, as you might expect, has a great insurance and pension plan. There are lots of variables, but if you spend your career with the city, you can get 70% or even 80% of your salary when you retire. That's pretty sweet. Roland chose not to take benefits from the private landscaping firm, but they do offer them. Medical and retirement after people work there a while. But it's pretty standard stuff. We did a simple calculation with all these numbers. Compared the salaries and added in the typical benefit packages for each job. Roughly here, private Roland is about $12,000 cheaper a year to employ than public Roland was. The city spent $57,000 on him. For the same stuff, all things being equal, the landscaping firm would be out about $45,000. That's a savings of roughly 21% for the same job, remember. And Roland? He was OK with working for the private sector. He'd rather be making more money, but he thought, these guys were doing a good job. Before I got laid off, I always thought, well, a private company's gonna do shortcuts. I was wrong about that. Civilian life is more, let's get out there, let's do it, let's do it. We got stuff to do. And you want to make it look good. You make it look good, you make the company look good. The civilian guy can fire your butt. The city, man, has to go through a long process to fire your butt, and it's hard for them to do that. So you're doing extra. You're doing more. You've got to do more in a civilian. Roland was doing more work for less money. That's the dream of privatization, right? But the bigger picture here is more complicated. Remember, Roland isn't the only cost involved. The private landscaping firms add a healthy profit on the top, that's normal. And they had to purchase a lot of the things that the city already had, like equipment. So did the city really save any money here by outsourcing, by privatizing Roland's job? We asked the city of Colorado Springs this question over and over again. And they hemmed and they delayed. They couldn't find a number. Then they said it's tough to calculate. In the end, all we could get from the city was this. Outsourcing Roland Hawkins and all those other workers might save money in the future. Because medical costs will rise. Pension costs could also rise. Better to get Roland off the books now, privatize him now. But as for last summer, the first year of the parks experiment, the city couldn't say if they saved a dime. Overall, the city's budget for parks is about $12 million now, a lot smaller than it was at its height. But that's mostly because the parks department is doing less. They've closed swimming pools and laid off community center employees. They're replacing fewer playgrounds and fences and bridges. And Roland, for his part? He's not going back to the parks this summer. He hurt his back. What I learned, though, from talking to the people in Colorado Springs is that for a lot of them these calculations don't really matter. They don't care if privatizing actually saves the government money, so long as the government is doing less. City councilwoman Jan Martin says she hears this all the time. That it's become a matter of faith in the city that private is better. And she tells us a story. In the dark days, after the tax measure was defeated, city council was having another meeting about slashing government. And a gentleman came up to me and actually thanked me for the adopt a street light program. He had just written a check to the city for $300 to turn all the street lights back on in his neighborhood. And I did remind him that for $200 if he had supported the tax initiative, we could have had not only streetlights, but parks and firemen and swimming pools and community centers. That by combining our resources, we as a community can actually accomplish more than we as individuals. And he said? He said he would never support a tax increase. So for him it wasn't the money. He was willing to pay more to turn on the street lights than to pay for all city services. That's right. And it's because of a total lack in trust of local government to spend those services, which was part of Steve Bartolin's letter. That prevailing sense that government won't take care of our money, that brings somebody to the conclusion that, I'll take care of mine. You go figure out how to take care of yours, because we don't trust government to do it for us. Two years after Colorado Springs went dark, this is where they are. The city looks better. The lights are back on, the parks are green again. But it wasn't because of privatization or the new mayor. Remember how Martin mentioned that sales tax revenue plummets in a recession? It also recovers fast. Tax revenue is bumping back up nicely. The Colorado Springs experiment in not trusting government is continuing full steam ahead. They're trying to build a city where government does less, costs less, and leaves $200 in your pocket, not the government's. Robert Smith is a member of our Planet Money team. Planet Money is a co-production of our program and NPR News. Their blog and podcast, npr.org/money. This American Life is distributed by Public Radio International, WBEZ management oversight for our program by our boss, Mr. Torey Malatia. I was just talking to him. He bought this aquarium and some fish as pets. But he is not into them. I think they're rude, they're ignorant. They're not friendly. Do you know what I mean? I'm Ira Glass. Back next week with more stories of This American Life. PRI. Public Radio International.