Setting a Good Example: How Private Partnerships are Saving CA Cities

Monday, July 19, 2010 2:01 PM by Renae Bartusch

Cities, squeezed by their lack of political will to cut spending when an influx of state and federal dollars is readily available, are starting to wearily eye their budgets that are increasingly in the red. As federal dollars vis-à-vis the “stimulus” start to run dry, some city officials are adopting proven methods to cut back on spending and put their fiscal houses in order. The Wall Street Journal has a great article today detailing the utilization of private contracting by municipal governments whose bloated, union-arbitrated public worker contracts are sinking their budgets.

With a $118 million budget deficit, the city of San Jose, Calif. realized it can no longer afford its janitorial contracts.  The city is now hiring outside contractors to do the work instead and has saved $4 million by doing so. The small town of Maywood, outside Los Angeles, is disbanding its entire staff and contracting all city services with private companies. The town, which already uses public-private partnerships, has called its actions “cutting edge” and looks forward to setting an example for other localities.

Every year, the Americans for Tax Reform Foundation and Center for Fiscal Accountability calculate the Cost of Government Day.  Part of the study looked at government employment and found that federal civilian employment would grow by 141,400 between 2009 and 2010.  At the state and local level, California employs an astounding 2,271,000 people. Despite the recession, government at all levels continues to expand the size of its workforce without regard for the strain this burden puts on taxpayers.

In the wake of the almost-trillion dollar spending boondoggle sold to the American people as the “stimulus” it is encouraging to see local governments adopt proven pro-growth policies to spur economic recovery. As we have argued before privatizing the ever-expanding government workforce provides tangible savings for taxpayers and governments who are serious about meeting their bottom lines. We hope the efforts in California inspire more municipalities to get serious about reining in the cost of their public sector as well.

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