NJ Gov. Chris Christie Creates Privatization Commission

New Jersey Gov. Chris Christie deserves major kudos for signing an executive order today creating the New Jersey Privatization Task Force, which will “develop recommendations for a comprehensive approach to converting certain areas of government operations to privately-run operations in an effort to cut the size and cost of state government.”

According to Gov. Christie:

“Delivering programs and services to our citizens is government’s primary job, but I have asked the Task Force to look for places where we can do this in a more efficient, cost-effective way by having the private sector do it […] This full review will allow the Lt. Governor and me to make carefully informed decisions on where and how to do this as we continue to responsibly manage state government. It will also make recommendations for how privatization could improve operations and reduce costs for municipalities, school districts and counties.”

In signing the executive order (not yet available on the Governor’s website), Christie echoes similar moves by peers like VA Gov. Bob McDonnell (Commission on Government Reform and Restructuring), AZ Gov. Jan Brewer (Commission on Privatization and Efficiency) and, of course, LA Gov. Bobby Jindal who started this train last year in creating the Commission on Streamlining Government. Louisiana’s Streamlining Commission came up with dozens of privatization proposals in its first report last year, and they’re planning to continue their work this year. I feel confident that once they start looking, the similar commissions in New Jersey and elsewhere will find numerous, smart privatization opportunities in their jurisdictions as well.

More on Gov. Christie’s executive order from Business Week:

New Jersey Governor Chris Christie said he may privatize some state jobs in 2011, as he struggles to close an $11 billion budget deficit amid rising costs for employee salaries and benefits.

All levels of government have to be looked at when considering whether public jobs or agencies should be operated by the private sector, Christie said after signing an executive order creating a panel to study the issue.

“I would be doing this even if we weren’t in a fiscal emergency,” Christie told reporters today in Trenton. “This is a task force that I believe is incredibly important because of our current budget conditions.”

Christie, a Republican who took office Jan. 19, will present his first budget on March 16. The governor said this week that he’s unable to lay off or furlough unionized state workers to help close the budget gap for the fiscal year that begins July 1, because of an agreement negotiated with unions by his predecessor, Democrat Jon Corzine.

The deal that allowed Corzine to freeze employee wages last year and balance the current budget prevents the state from firing or furloughing workers until January 2011, or it faces penalties of $330 million in the form of pay raises, Christie said. Some employees will see increases of as much as 11 percent in the coming fiscal year, the governor said. […].

New Jersey, like many states, is in a massive fiscal crisis. As I said on CNBC earlier today with regard to local governments in New Jersey, privatization can save 5-20% on average in costs (possibly even more), plus allow the state to tap private sector expertise, experience and best business practices, along with many other benefits. Saving money through privatization of public services is a win-win-win. It’s good for taxpayers (an alternative to tax hikes and more debt), it’s good for government (saving money, improving services and re-focusing public employees back to core government services), and it’s good for the private sector (jobs and opportunity, a real “stimulus” if you will).

Gov. Christie is absolutely spot-on in seeking out every sensible opportunity to put the private sector to work in the business of serving the public interest.

Reason Foundation’s Annual Privatization Report 2009
Reason Foundation’s Privatization Research and Commentary