Not Privatization, Profitization
By Senate Majority Leader Barbara Buono (D-Middlesex)
The sub-prime mortgage crisis. The Wall Street meltdown. The bank bailout.
None of these events, which precipitated the current recession, were spurred by benevolent desires on the part of the private sector.
Yet, Governor Christie would have us believe that turning over the government keys to private industries is in the public’s best interest.
Corporations are in business to make a profit, and understandably so.
This is not an attack on the private sector. Corporations play a major role in driving our economy and creating jobs. Without the ability to make a profit, our economy would come to a standstill. This is about certain services that should not be sacrificed in the name of the almighty profit.
The major distinction between public and private sector services is simple. When you purchase a service or product from the private sector, it is usually wholly of your choosing in a market with abundant competition. However, public sector services – safe roadways, competent mental health treatment, security, motor vehicle inspections – are typically a monopoly where no other options exist.
Governor Christie’s plan to hand over traditional government functions to private interests undermines the core mission of government, which is to work on behalf of the public good. This is a recipe for disaster, especially when it comes to handling some of our most vulnerable populations – mental health patients – and some of our most sensitive matters – law enforcement functions.
The overriding difference between the public and private sectors is that those in charge of running the public sector are ultimately held accountable by voters. Conversely, those who run the private sector are accountable to their Board of Directors and their shareholders…and no one else.
This lack of accountability, coupled with the overarching motive to make a profit, in many cases only fosters an environment where the public good just isn’t a priority.
The Governor’s continued push to privatize public sector services is not about saving taxpayers money or improving upon these services. Rather, these proposals are simply about profitization - using our tax dollars to enrich and subsidize those that are wholly unaccountable to taxpayers.
Time and time again, studies have shown that there is very little gain through privatization and, more often than not, the public suffers substantial losses. If anything, the track record of past privatization efforts shows faulty budgeting, costs overruns, and unnecessary spending.
In Chicago, for example, parking privatization has cost the city between $670 and $850 million. Right here at home, we saw the consequences of profitization when then-Governor Christie Whitman attempted to privatize car inspection services. Costs spiraled out of control – some $200 million more than projected due to change orders, over-charges, exorbitant expenses for non-operational items and an assortment of other costs uncovered by the State Commission of Investigation in 2002.
Let us not forget the E-Z Pass boondoggle which cost the state untold millions of dollars due to mismanagement and inefficiencies on the part of the private company brought in to manage its implementation. More recently, a private contract for lighting repairs along the Turnpike resulted in shoddy workmanship that, after protracted delays, eventually needed to be repaired and completed by the Turnpike union’s electricians.
The savings from privatization heralded by the Governor’s office simply aren’t there and the administration has failed to produce any evidence otherwise. Yet they appear intent on running roughshod over the backs of public workers, many of whom are already among our lower wage earners. The ensuing result would be a new class of even lower wage earners so that these private interests can squeeze a profit out of services that are, in many cases, already run on a shoe-string budget.
The Governor has left little doubt about his concern for the plight of the working-class men and women of this state. Since taking office, he has shifted every major burden squarely on their shoulders while bestowing a tax break on the wealthiest in our state.
Now facing another major deficit, Governor Christie is looking for a quick fix, a band-aid if you will, to plug a budget whole, without asking the richest one percent of our residents to share in the pain. Who will ultimately benefit from these private contracts? More than likely, these same fortunate folks.
Turning over traditional government functions to profit-driven, private entities simply has not saved us money. We need to continue to work towards creating efficiencies in our budget, but outsourcing our problems is not the solution. If anything, we run the risk of making our budget issues worse.
We can all agree that tightening our belts and cutting spending is absolutely necessary as we craft our next budget and I look forward to working with the Governor towards that goal. Nonetheless, privatization – or more accurately, profitization – is not the silver bullet solution to our property tax woes.