On its face, this appears to shrink the government and save the taxpayers money.
In practice, however, it leads to nonsense like New Orleans' traffic camera fiasco.*
In this case, an external entity has convinced a government officials to purchase their services in an effort to raise revenue for the government budget under the guise of increasing safety. This is an incredibly unpopular program that would likely be voted down if offered up on a referendum, and has been the subject of many lawsuits. To legally administer the program while protecting the city from litigation raised by the program requires measures that have led to the suspensions of high level police officials who were part of the "clean up corruption" regime.
This happens because the program is ripe for corruption, and even the most above-board administration appears dirty when you've got this much money made from a low political risk program that delivers nearly unchallengeable verdicts regarding an almost indefensible crime. (Disclaimer: I've been caught by one of these cameras.)
My problem is that the city shouldn't be making money in this way, and shouldn't be depending on revenue generated. As Mark points out:
Even if you buy into the idea that the cameras are more about safety than revenues, it still doesn’t make sense for a city to rely on revenues from scofflaws. If the cameras DO actually change driving behavior, as proponents suggest, then these traffic camera revenues will decline over time anyway, as people drive more safely. That creates an incentive for the city to install ever more cameras to overcome the decline in ticket funds.
If the program's big proponents are defending it because the city will lose money if it is terminated, then you see the only reason we have this program. And it ain't public safety. It is about a snake-oil solution to a problem no one wants to face politically.
The better idea, it seems to me, is for this city to fix its incredible revenue problems as well as the city's unbelievable spending problems. Because, like most governments, this city has both problems in abundance.
* Which is not to be confused with the non-revenue generating New Orleans crime camera fiasco. That wasn't about public safety, either.