Andrew and Pete have both provided some very provocative thoughts about my earlier post about a county in Maryland selling excess capacity in its public schools to anyone interested in attending, and doing so by charging a lower tuition. Their comments on how resources are and should be allocated deserve much more discussion.

But I want to focus on the implications for government finance for a moment. Isn't Montgomery County doing something rather unusual for the public sector: figuring out how to use a resource that would otherwise remain fallow? Shouldn't the county get big credit for increasing revenues and, therefore, improving its bottom line? Shouldn't it also get credit for improving it's finances without raising taxes? And if it's schools are better because of the increased revenues from tuition, or because it sees the value in having better schools so that they attract more cash customers, isn't that a sign of a financially savvy school system and county government.

The amount of cash involved is probably relatively small, burt at some point won't Wall Street start to take notice and reward this practice as it determines the county's bond rating and the interest rates it should pay?