The state government in Idaho probably had no idea what it was in store for when the Department of Lands decided to get into the self storage business by buying Affordable Self Storage in Boise for $2.7 million. The ensuing controversy has stirred up a lot of feeling about economic policies and the role that the government should/ should not be allowed to take in regards to private business.
Opponents of the move have been very vocal in their opposition likening the move to something that one would expect from nations like Cuba, Vietnam, and communist China. The government responds with that it is just trying to use whatever means necessary to fund things like the education system without hiking up taxes.
The fine line in the issue is whether you are okay with the state doing whatever it can to raise funds for public programs even if that means that the government will be in direct competition with private entities.
Affordable Self Storage is not the first time that a government entity has gotten involved in business. The most famous would be the Tennessee Valley Authority. Formed during the Great Depression the TVA was created as one of President Franklin Delano Roosevelt’s New Deal programs. Back then people thought that private electricity companies were charging too much and actually heralded the government getting involved.
However, there was a lot of opposition to the TVA. Some people believed that the government getting involved in private industry to the scale that it did was wrong. They though that it was too much involvement by the government in the economy.
A similar argument has been put up in regards to the state of Idaho buying Affordable Self Storage. Like the TVA, the government is saying that they have a loftier purpose in mind than competiton (school funding). Regardless of their intentions and desires, opponents say the state does have a competitive edge since they do not have to pay taxes like privately owned businesses.
John Palatiello, president of the nonprofit Business Coalition for Fair Competition, states the argument of the opposition well:
“We are seeing an unprecedented level of government expansion into numerous activities that should be left to the private sector. In our free enterprise system, government should be the umpire, not the opposing team.”
Affordable Self Storage is not the only entity which the Idaho Department of Lands has gotten into. Recently it has also bought several office buildings and parking lots. These moves come as a surprise considering how Governor “Butch” Otter campaigned against big government and claimed to be a proponent of small government when he was campaigning for office. The following came from his campaign website:
“…Governor Otter is fighting the culture of entitlement that leads to runaway growth and “mission creep” in government by insisting that agencies stick to those jobs required of them by law or the Idaho Constitution. He knows most Idahoans—independent by nature—recognize and appreciate that government cannot and must not seek to be all things to all people, and that promising more than state government can or should even try to deliver is bad public policy.”
Sources used:
“A Loaded Potato.” Self Storage Association Globe News; December 2010.
“State Owned Self Storage Business Helping Fund Schools.” Self Storage Industry News; 03 November 2010.
“Idaho Saga Involving State Owned Self Storage Continues.” Self Storage Industry News; 23 November 2010.
“Should State Governments Get Into the Storage Business? Public Reaction to Idaho’s New Self Storage Venture is Mixed.” Self Storage Industry News; 21 October 2010.