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State and Local Government / Budget and Spending

New Jersey Looks to Privatization as a Means to Trim Budget

By Vince Smith on Jul 16, 2010

New Jersey’s governor is pushing for the privatization of numerous public services as a means to trim the state’s budget. These services include car inspections, state parks, psychiatric hospitals, and turnpike toll booths. Furthermore, preschools would no longer be constructed on the public dime, public employees would be required to pay for their own parking, and the cafeteria, education, and health care programs in prisons would be handled by private vendors.

Some estimates project that the proposal will save New Jersey $210 million annually in taxpayer funds. From the article:

“The question has to be, ‘Why do you continue to operate in a manner that’s more costly and less effective?’ rather than, ‘Why change?’?” said Richard Zimmer, the former Republican congressman who chaired the task force.

By and large, privatization lowers costs and raises quality. Unlike the government, which can continually operate in the red, a private firm must turn a profit to stay in business, a fact that makes private service providers much more accountable to consumers. The unresponsiveness of public service providers is especially evident when spending hours in line at the DMV or post office. A private firm with a similar service record would either have to take steps to become profitable, by increasing service and lowering costs, or face going out of business.

Missourians would benefit if state officials followed New Jersey’s lead by finding ways to privatize services and save taxpayer money. The efficiency gains that privatization bring would provide a means to cut costs without cutting services. Missouri could do well for itself by entrusting responsible private businesses to help carry some of the state’s fiscal load.

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Vince Smith

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