Destroying Incentives to Provide Services

What happens when a business owner, who requires the state’s permission to increase his prices, petitions to the state to increase his prices and is denied? He retires:

David Bryson, president of Champion’s Auto Ferry, blamed the MPSC’s refusal to grant a requested fare increase for his decision to retire and close the ferry service at a yet to be determined date.


“Our tariff was rejected even though we submitted detailed evidence that the traffic volumes were down 8% and that it has been almost 4 years since the last price adjustment,” Bryson wrote.

He said the commission refused to allow the ferry company to include pensions, leases, employee bonuses and legal costs in its operating expenses.


In his letter, Bryson also blasted the agency for publishing “Champion’s sensitive and detailed financial information on the internet, even though it was shared with you on a confidential basis.

“As a result of the Commission’s practice of applying ever more burdensome utility rules and standards to Champion, we find that we are essentially being regulated out of business and there is no longer any incentive to continue to provide this non-subsidized transportation service.”

Imagine that, when an individual is no longer able to make a profit on his work he no longer has an incentive to do that work. I’m sure Bryson’s announced retirement came as a shock to the regulators. In fact I wouldn’t be surprised if the regulators make a statement blasting Bryson for his “greed” and condemning him for taking away a “right” from the people he served. As much as I don’t like Ayn Rand’s philosophy she really did call it when it came to regulators destroying businesses.

One thought on “Destroying Incentives to Provide Services”

  1. I love how the State ignores the largest categories of operating expenses as operating expenses. No wonder they have such a problem with running a balanced budget.

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