Article 60. When is Privatization Good for a State?
I have taken the position in two past articles that Privatization costs more in tax dollars than government reform. See Article 13. “How Efficient Government Reform Can Save More Tax Dollars Than Privatization”
and Reader Question 16. “Why Do You Dismiss Privatization in Government Reform?”. If the agency is so mismanaged that a private company can do the job and still make a profit then reform of the agency is obligated. But there is another case where nonprofit companies are hired to do government services. Here the state is only interested in the quality of the work being done. I assume here that the contract is let in open bidding. The state must be free to contract out any services it needs too as long as the contractor is a nonprofit organization. The state has the right and the obligation to determine the most effective way to deliver services to the taxpayers. The following case clearly demonstrates where Connecticut State employee unions have tried to put restrictions on the state’s ability to use nonprofit contractors.
From the Hartford Courant.
Governor “Rell Vetoes Contract-Reform Bill November 17, 2005
By Christopher Keating, And Mark Paziokas”
“For the second time in four months, Gov. M. Jodi Rell on Wednesday vetoed a bill to reform the way the state hands out contracts, saying it included a back-door attempt to make it harder to hire private contractors.”
“The issue has pitted the nonprofit agencies against the state-employees’ unions, which have pushed for the restriction provision on privatization that Rell opposes. State employees have complained that their jobs were put at risk by a series of privatization efforts by Gov. John G. Rowland, including sending inmates to a prison in Virginia and attempting to allow a private contractor to operate the state’s computer system.”
It is clear that Connecticut’s state employee union is seeking to control how the state does business through the Contractor-Reform bill. This is not a true reform bill but rather another attempt at political maneuvering. When unions have this much power in a private business it can decrease the profits of the company enough that over a period of time it will put the company out of business. But in state government higher and higher taxes can mask the resulting inefficiency. A state cannot afford to let its employee unions to gain control of how it does business. For the full story see The Hartford Courant at “courant.com” .
