State Government Privatization Reform: Examining the States

The Reason Foundation is a California based public policy think tank that, among other policy issues, conducts research on state government privatization and examines the public-private partnership models of various state governments.  Recently they have released their Annual Privatization Report 2010: State Government Privatization.   The report is a great resource for exploring state initiatives aimed at reforming state government and privatizing state government functions as a way to decrease government spending.  The following are examples of the content within the Reason Foundation’s annual report.

New Jersey’s Privatization Task Force

The Report highlights New Jersey’s efforts to reform government privatization policies by creating the New Jersey Privatization Task Force, which was established by Executive Order 17 under Governor Christie.  The Task Force reported to the Governor in 2010 outlining  various recommendations and identifying privatization opportunities available to New Jersey’s state government.  One recommendation is that the Governor should make it an administration priority to make private sector competition the standard for all state agencies and the creation of a centralized privatization entity.  Other recommendations and privatization opportunities identified by the task force include state parks management, state psychiatric hospitals, vehicle fleet maintenance and management, performance based highway maintenance, state parking facilities, water, printing services, workers compensation claim processing, toll collection, vehicle emissions inspections, higher education facility maintenance, correctional food services, hospital debt collection, golf corse management and housing and construction code enforcement.  The report also highlights that some of these recommendations have already been implemented by Governor Christie and the New Jersey State Legislature.

The Privatization Task Force report is available here

Louisiana’s Commission on Streamlining Government

Louisiana has implemented broad government reform efforts to increase public private partnerships by establishing the Commission on Streamlining Government (CSG).  The objective of the Commission is to recommend reform efforts that will reduce the cost of government through privatization, downsizing, and creating a more efficient government.  Recommendations include creating a state spending limit, shifting state retirement plans to 401K style and to reform state education financing to student based budgeting.  The full report includes over 200 recommendations for privatizing, streamlining, and downsizing state government.

The report is available here.

Puerto Rico’s Privatization Program

The Reason Foundation notes that in 2009 Puerto Rico enacted a law that allows state government agencies to enter into public-private partnerships with firms for the design, construction, finance, and maintenance of public facilities.  Furthermore, the law created the Public Private Partnership Authority (PPPA) which is a separate entity responsible for identifying and monitoring public private contracts as well as the enforcement of their terms.

Arizona and the Privatization of State Parks

In Arizona there is a proposal that would allow the state to privatize state parks by leasing them to Recreation Resource Management, which is one of the largest private park oversight companies in the United States.  By leasing the state parks through public-private partnership contracts the state would be able to reduce the cost of managing parks during a time when they are threatened by budget cuts.  Other states considering this model  include New Jersey, Utah, California, Georgia, and Kentucky.

The Arizona State Park Foundation has released a report “Arizona State Park privatization and Efficiency Plan” which lays out how such a privatization scheme would work and addresses the policy and financial details of the plan.

Reason’s Notable Privatization Highlights

The Reason report goes on to discuss the privatization of alcohol regulation, the Illinois program for the private management of the state lottery, California’s (and the United State’s) first privately financed courthouse, the privatization of worker compensation programs, and the privatization of Economic Development Agencies.

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