Incentive-based voluntary programs work
We have written previously about how refreshing it is to see successful public/private ventures come together and succeed. When this happens, all participants deserve commendation.
And now we commend the Montana Department of Revenue and, specifically, the Liquor Division and its administrator, Shauna Helfert. She and her staff have been working for eight months to develop a voluntary and incentive-based program to substantially step up responsible server training for purveyors of adult beverages.
But a few editorialists and others have surmised that an incentive-based campaign is wrong and won’t work. Instead, they suggest, more government mandates, more punishment and new taxes are the answer.
We are reminded of a similar situation that took place over more than the last decade.
Starting in 1995, some government officials and anti-gambling groups wanted to impose an expensive, complicated – and some believed, intrusive – electronic “dial-up” system to monitor all 17,000 gaming machines in the state.
Machine owners balked at the $10-$15 million price tag, pointing out there were few “material” discrepancies to correct, and “dial-up” proposals twice died in the Legislature. A later attempt to actually construct such a system went awry and was aborted.
Finally, in 2001, industry sat down with the regulatory community and went to work devising a solution centered on a voluntary, incentive based automated and electronic system for video gaming machine reporting and tax verification. A bill was passed and funding secured.
At the time, indignant editorialists and a few anti-gambling folks campaigned against any notion of a voluntary, incentive-based solution. It would never work, they said. Businesses would never voluntarily adopt a system of electronic reporting and verification; tax collections under a voluntary system could never be confirmed as accurate.
Instead, they said, machine owners ought to be forced into a dial-up system and be made to eat the cost, whatever it was, since costs are irrelevant. And instead of incentives, punitive sanctions would achieve the desired result.
Nevertheless, by 2003 the Gambling Control Division was committed to engineering this Internet based system.
By 2006 it was substantially ready and testing and enrollment began in earnest.
It would never work?
It has been an overwhelming success! Today, 98 percent of gaming machines are being reported electronically. And that last two percent will be along shortly.
Why? Because the system was designed to be a win/win/win for the public, the regulators and the business community, and it has been. Labor costs have been reduced for everyone and tax collections are accurate (believe it, Gambling Control has verified this).
Can it work again?
Sure it can.
In the case of server training, the objective is to substantially increase the number of servers being trained, increase the quickness with which new hires are trained (30 days), and to increase the frequency of the training (annually).
We believe with sufficient incentives, all of these objectives can be met and within a reasonably short interval. So the issue is, which methods will get us there: mandates and more severe punishment, or incentives?
One neat thing about the revenue department’s approach is this: the rules will be in effect for two years, during which time the Liquor Division will be evaluating the results. If the desired results are being achieved, we can applaud a real success. If not, we can make adjustments or try an entirely new approach.
We’ve seen before how licensed businesses will respond to incentive-based voluntary participation in a program. We’d like to see that again.