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Editorial

Privatizing state services: The House caves in

In a prudent move, particularly in fiscally tight times, the House Ways and Means Committee’s budget proposed giving state officials more power to pursue savings by hiring private companies to provide state services. That would have saved an estimated $10 million in public funds. But under the threat of a floor battle instigated by legislative allies of public-employee unions, the House leadership largely backed down. It was a clear case of lawmakers putting the unjustified demands of those who work for state government ahead of the interests of taxpayers.

Currently, the anti-privatization statute known as the Pacheco Law makes it difficult for agencies to seek savings; it requires that any proposed privatization contract for more than $500,000 first be reviewed for savings by the state auditor, under assumptions that tilt the outcome sharply in favor of the status quo. The law has basically shut down all privatization efforts in state government.

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