by Brendan Fischer
June 28, 2013
The decades-long effort to privatize public services and assets is hitting some bumps, with state and local governments reconsidering whether for-profit companies should be allowed to indiscriminately profit off of taxpayer dollars with limited accountability.
In New Jersey, legislation to ensure that public services won’t be privatized unless it will result in actual savings for taxpayers has passed both chambers of the legislature. In Texas, a bipartisan coalition is fighting against a private prison in Montgomery County, and Kentucky is rejecting private prisons altogether. And in Fresno, California, voters rejected a proposal backed by the city’s popular mayor to privatize trash collection services.
“The fact is, when taxpayers see what they lose by handing over control of their roads, prisons and other services, they don’t want anything to do with outsourcing,” says Donald Cohen, chair of In The Public Interest, a resource center on privatization. “We hope that what we’re seeing in places like New Jersey, Texas, Kentucky and Fresno is part of a trend to restore control of services to American taxpayers.”
New Jersey Could Curb Privatization Abuses
The New Jersey bill, if signed by Governor Chris Christie, might be the first of its kind in the nation. The legislation would prohibit privatization contracts that achieve “cost savings” by cutting services or raising rates, and also require that the company provide its workers comparable wages and benefits. This would thwart efforts by corporate interests to provide the veneer of cost savings by replacing middle-class public employees with low-wage workers.
The bill would also require for-profit corporations to actually stand by their promises: their performance would be subject to audit, which could lead to penalties or the loss of a contract if they fail to produce the promised cost savings.
Not surprisingly, the bill is opposed by groups like the Chamber of Commerce, who will likely urge Christie to veto it. And Gov. Christie is no stranger to privatization: at the same time the bill was moving through the legislature, Gov. Christie entered a contract to privatize the state’s lottery system. Whether he will sign this latest bill to guarantee accountability for privatizers remains to be seen.