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The current economic downturn has demonstrated that the tax model used by most government bodies (sales and property tax) cannot continue to provide services for constituents without significant cutbacks, layoffs or downsizing of government operations.

An alternative is the Transitional Benefits Corporation (TBC) model, which provides several conversion options for government bodies, all while continuing certain services at the current pace of operations. The model doesn't rely on tax revenue per se, to operate, but instead can use different streams of funding.

The TBC method is a vehicle used to promote the transfer of designated, generally underutilized government assets - such as real estate, equipment and intellectual property - to the private sector and to enable associated government employees to be similarly redeployed while allowing them to retain and accrue their public benefits. (Diagram below illustrates the TBC structure.)

The TBC model is predicated upon the willingness of government bodies to be motivated to change and then to do it, given a sound business case, and cost-benefit analysis. TBC is not a blatant outsourcing of government but a menu process that enables government bodies to decide for themselves what they can afford, according to their goals and objectives, and how to achieve it in the most cost-beneficial manner possible, all while serving their citizens.

Organizational and legal precedents, developed successfully in the recent past, support implementation of the innovative TBC method. Federal examples include the Naval Air Warfare Center in Indianapolis, the Navy Environmental Detachment in Charleston, S.C., and the United States Investigative Services (background investigators from the Office of Personnel Management). Some pertinent local government initiatives include the City of Milwaukee's wastewater management services and the County of San Diego's information technology (IT) capability.

The TBC method delineates a legal and business framework for transitioning within a non-profit umbrella structure. TBC provides a structured methodology to analyze selected government operations with a view toward enhancing efficiency by reducing costs, redistributing workload and maximizing asset utilization.

Pursuant to the TBC method, an umbrella organization is created to facilitate the smooth transition of public sector assets and personnel to the private sector by attracting financing; incubating new business units and creating spin-offs; and commercializing government-owned intellectual property.

The TBC method is implemented through the contractual interplay under the TBC for the continued performance of the installation's functions among any existing government installation transferring functions and related personnel, one or more public sector units, and one or more new business units ("NBUs"), and possibly one or more non-profit corporations organized under the auspices of state or local government, consistent with the corporations' laws of the particular state.

Under the TBC method, the TBC enters into contracts directly with the existing government installations and NBUs to achieve the benefits described below. Note that all of these units are necessary in every case to achieve the benefits set forth below.