“By examining some examples of privatization by federal, state, and local governments, we seek to identify strategies to ensure transparency, accountability, and protection of the common good,” Lucy Heller, President, League of Women Voters of Bergen County said.
League members Patty Infantino (Ridgewood), Audrey Mayor (Park Ridge), Patty Libutti (Teaneck), Ellen Busteed (River Edge) and Anne Wolfe (Mahwah) led the roundtable discussion of county, federal, state, education and correctional facilities privatization efforts.
"I don't think for the most part people on the local or county level intend to screw with residents when trying to privatize," Wolfe said. "The original intent is not to eliminate services but to be efficient with taxpayers dollars and produce the best quality of services possible."
One example she gave is how Bergen Pines hospital was transferred to the private sector in the late 1990's and became Bergen Regional Medical Center. While Bergen County continues to own the property and facility, the center itself is run by a private operator.
"In 1995, then County Executive [Pat] Schuber commissioned a blue ribbon panel to study the future of Bergen Pines Hospital due to concerns about the elimination of possible funding sources," Wolfe said. "In July 1997, the Hunter Report was released and included the recommendation to hire a private manager to handle the hospital. In this case, the privatization improved the quality of services to patients and residents."
While privatization of the Bergen Regional may have been a success, Audrey Mayor had doubts about the usefulness of privatization within the federal Department of Defense and Homeland Security.
"Under the pretext of saving money, the Department of Defense is transferring public jobs to the private sector but there is a huge scarcity of oversight," Mayor said. "One reason cited is that it will reduce the size of big government, but many contractors are retired federal employees who already collecting a federal pension."
One example is private security contractor Blackwater Worldwide (now Accademi) which was founded by former Navy Seals Erik Prince and Al Clark. During Hurricane Katrina, Blackwater forces were making $650 per day as compared to members of the New Jersey National Guard with an annual salary of $40,000. There have also been several allegations of misconduct by Blackwater employees in Iraq and Afganistan from 2003 to 2007.
"This system has encouraged and enabled the growth of companies who stand to gain more from an escalation of war," Mayor concluded. "If contractors are in it for profit, there is no incentive to withdrawal."
The main problem for privatization in government services, according to Infantino is that unless federal law dictates specific outlines, each state is left to their own devices.
Massachussetts passed the Pacheco Law (officially the Taxpayer Protection Act) in 1993 which requires a strict review process on any contracts that exceed $200,000. Tennessee enacted the Private Prison Contracting Act in 1986, the Corrections Corporation of America now oversees all aspects of the state prison systems except for any and all procedures related to inmate release or parole eligibility.
"In the modern prison industry, 35 states have laws for prison labor," Busteed added. "There are also questions of safety not only to inmates but the public at large. According to a study by Cornell University, there is an increased rate of violence behind bars and and increased number of escaped inmates and substance abuse in private prisons."
But when it comes to education, the pros and cons are split on privatization with the main arguments focused on Charter Schools. Other examples of privatization in the education system are school vouchers, school choice and tuition credit.
"In New Jersey there are 2,500 public school and 80 charter schools," Libutti said. "The New Jersey Charter School Act was enacted in 1995 and by the following year seven school were opened. There are 1.3 million school students in the state with 25,000 attending charter schools."
According to the New Jersey Department of Education, a charter school is a public school that operates independently of a local school district’s board of education under a charter granted by the Commissioner. Once a charter is approved and established, the school is managed by a board of trustees with status as a public agent authorized by the State Board of Education to supervise and control the school. A charter school is a corporate entity with all the powers needed to carry out its charter program.
"New Jersey is ranked a C by the Center for Education Reform for its charter schools because both New York and Pennsylvania have a greater robustness of its programs. Washington DC has some of the most successful charter schools in the country."
Privatization of government services on the local level is still in its infancy with municipalities focusing on privatizing garbage or recycling pick-up or public schools privatizing its custodial employees.
Correction: The number of charter school students in New Jersey was incorrectly quoted. It is 25,000, not 2,600 as previously reported.