Arizona Privatization/Efficiency Board Bill Advances

Arizona policymakers took an important step today, passing Senate Bill 1466 out of the Senate Government Institutions Committee on an 6-2 vote. SB 1466 would establish a Florida-style Council on Efficient Government, a centralized, independent decision making body designed to manage privatization and efficiency initiatives and develop a transparent and performance-based decisionmaking process for doing so.

As I told the committee in testimony this morning, this concept–a state center of excellence in procurement policy–is fundamentally designed to address two key things. First, it’s about creating an entity within government who’s job is to help “right-size” government through competition and privatization. And second, it’s about creating an institutional tool to apply what former Indianapolis mayor and current Harvard professor Stephen Goldsmith has called the “Yellow Pages test,” meaning if a service can be found in the phone book, government ought to buy it rather than produce it in-house.

With a current budget shortfall topping $3 billion and more deficits projected for the next several years, this bill couldn’t have come at a better time. Florida’s Council has helped the state save hundreds of millions of taxpayer dollars the last several years, for example.

Simply put, doing more with less requires breaking the inertia that keeps spending on autopilot and taking a fresh look at what services the state is providing and whether or not the public sector is the best way to deliver them. Just because government is tasked with providing Service X doesn’t mean the public sector offers the cheapest means of delivering it–in fact, often it’s not. If taxpayers would get a better deal by contracting with a nonprofit firm or private company, it should behoove policymakers to use similar opportunities before resorting to tax hikes or service cuts. When budgets get tight, families shop around for the best deal in order for their family to survive. State government should do the same.

The text of SB 1466 is available here, and Reason offers more info on the idea here, here, here and here.

Reason’s Privatization Research and Commentary