Privatization

Truth-Out Makes Case for Garden State Privatization

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Ellen Dannin doesn't need facts. She's got a big book.

In a very late hit on Gov. Chris Christie's New Jersey Privatization Task Force, Truth-Out's Ellen Dannin questions the $210 million in savings the task force's 10-month-old report [pdf] estimates the state would realize by selling off some government services: 

On page 14 the report says it did no analysis "due not only to the fact that the actual cost of a privatized alternative will often not be known until the end of a full fledged competitive bidding process, but also because New Jersey state government agencies have difficulty calculating with precision the full cost of functions currently performed at the state level." So, the sunny claims of big savings for the people of New Jersey are a guestimate, at best. And "To Be Decided" is the most accurate statement in the report.

With this cleverly selected caveat, Dannin makes the stealth case for privatization. The quoted matter states the central reason a public bidding process is preferable to the status quo: that it would allow competition for the state's very scarce dollars. 

Even more deftly understated is Dannin's reference to the real scandal here: New Jersey's government employees are already having "difficulty calculating with precision the full costs" of functions they are currently being paid to perform. Every New Jerseyan should be outraged by this cavalier approach to spending the people's money, and Truth-Out should be commended for providing supporting evidence for Christie's reform effort.

Cleverest of all is the article's red-herring lead. In fact the privatization task force did crunch the numbers for 100 percent of its claimed savings. The itemization leaves all the TBDs out of its total. Counting just the substantiated numbers, we get to $210.14 million, which the task force modestly describes as "$210 million+." Any savings from the TBDs would be on top of this. Thanks to Truth-Out for highlighting the fact that Christie's privatization team, unlike New Jersey's government employees, is scrupulous about substantiating its claims. 

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  1. So, the sunny claims of big savings for the people of New Jersey are a guestimate, at best.

    And the good people of New Jerksey are accustomed to government providing these services. Letting some non-government person (a Christie crony perhaps?!?) do them moves citizens out of their comfort zone.

    Also, you know what else is a guestimate? The name of which contributor wrote this post.

    1. It’s not angry enough to be TC, MW, or NG. Not enough literary or pop culture references for BD. So maybe the excellent STEPHEN J SMITH.

      1. Ha. And now it’s just been signed. TC must have just eaten a bacon wrapped hotdog to be so gentle with this topic.

    2. Radley Balko linked a story on his web page that says “Minnesota legislators are apparently considering a law that would make it criminal for people on public assistance to carry cash.” That is false and there is nothing in the bill that says that. If you guys are going to be taken seriosly you need to be more careful. Balko plays to the anarchy crowd that account for about 60% of his comments. Not going to make it too far with reasonable folks.

      1. Here, come join me at the adults table! Open wide!

      2. Go back to your basement – mommy’s calling you

      3. Yes that link that Balko prefaces with “not sure about the source here” in his Sunday links totally destroys the credibility not just of his work but also Cato and Reason.

        1. If you know the source is shit, (I do because I live in MPLS) then why repeat it? You repeat it because you have an agenda and the truth no longer matters.
          Agenda:
          Pot good
          haircuts bad
          white men bad
          illegal aliens good
          Rush Limbaugh bad
          open mouth homosexual kissing(men) good
          Obama good
          etc

      4. Not going to make it too far with reasonable folks.
        drink!

  2. New Jersey state government agencies have difficulty calculating with precision the full cost of functions currently performed at the state level.

    No kidding.

    These functions are so desperately vital, however, that no price is too high.

    Meanwhile, one of the Detroit papers (and no, I ain’t got no linky) ran a long and impassioned editorial which says turning a group of completely failed and worthless public schools into charter schools is a terrible idea, because the public school system deserves another chance. And more money.

    YOU’RE JUST NOT HITTING IT HARD ENOUGH!

    1. The article provides more evidence – if any is needed – that Michigan and Detroy-it are models for the rest of the country on how to balance a budget and implement effective government.

      So much fail in one place – it’s almost like they were doin it wrong or something….

  3. Here’s a list of NJ agencies I just pulled off their state website:

    Administrative Law, Office of
    Alcoholism and Drug Abuse, Governor’s Council on
    Board of Public Utilities
    Brain Injury Research, New Jersey Commission on
    Building Authority
    Cancer Research, New Jersey Commission on
    Capital City Redevelopment Corporation
    Casino Control Commission
    Casino Revenue Fund Advisory Commission
    Child Advocate, Office of the
    Civil Service Commission
    Clean Air Council
    Comptroller, Office of the
    Corrections Ombudsman
    Criminal History Review – Fingerprinting, ePayments
    Delaware River Basin Commission
    Developmental Disabilities, New Jersey Council on
    Economic Development Authority
    Educational Facilities Authority (NJEFA)
    Election Law Enforcement (Campaign and Lobbying Disclosure)
    Emergency Management
    Energy Master Plan
    Environmental Infrastructure Trust
    Fort Monmouth Economic Revitalization Planning Authority (FMERPA)
    Garden State Preservation Trust
    Global Warming
    Government Records Council
    Governor, Office of the
    Health Care Facilities Financing Authority (NJHCFFA)
    Higher Education, Commission on
    Higher Education Student Assistance Authority
    Highlands Council
    Historic Trust (NJHT)
    Homeland Security
    Housing and Mortgage Finance Agency
    Housing Resource Center (NJHRC)
    Information Technology
    Institutionalized Elderly, Office of the Ombudsman for the
    Interstate Environmental Commission
    Investigation, State Commission of
    Lottery
    Local Mandates, Council on
    Local Unit Alignment, Reorganization and Consolidation Commission (LUARCC)
    Medicaid Inspector General, Office of the
    Mental Health Stigma, Governor’s Council on
    Motor Vehicle Commission
    Meadowlands Commission
    Mediation (NJSBM), New Jersey State Board of
    New Jersey Network (NJN)
    Ombudsman for the Institutionalized Elderly, Office of the
    Pinelands Commission
    Pinelands Development Credit Bank
    Police Standards, Advisory Committee on
    Professional Boards and Advisory Committees
    Public Defender, Office of the
    Public Employment Relations Commission
    Rate Counsel, Division of
    Real Estate Commission
    Redevelopment Authority (NJRA)
    Schools Development Authority
    Science and Technology, Commission on
    Spinal Cord Research, New Jersey Commission on
    State Casino Reinvestment Development Authority
    State Employment and Training Commission
    State Ethics Commission
    State Parole Board
    State Police, New Jersey
    Transit, New Jersey
    Transportation Trust Fund Authority (TTFA)
    Turnpike Authority
    Victims of Crime Compensation Agency
    Waterfront Commission of New York Harbor

    I can pick about a dozen that ought not to exist at all, much less be privatized.

    1. I can pick about a dozen that ought not to exist at all, much less be privatized.

      I’ll start with: Criminal History Review – Fingerprinting, ePayments; Global Warming; Mental Health Stigma, Governor’s Council on; and Rate Counsel, Division of.

      1. Don’t start with this Council. You know how we get.

      2. How about:

        Brain Injury Research, New Jersey Commission on

        See it’s not just the government agencies that sit around and do useless things or do nothing at all, it’s also the ones that might theoretically do important things but are completely superfluous due to private activity.

        There is _big_ money being made in the treatment of brain injuries and research into further treatments and means of prevention. My mother, sister and aunt all had brain surgeries by the same doctor (the same guy who did Ryan Westmoreland of the Red Sox) and this dude flosses his teeth with gold chains. He also takes patients from the state run insurance program for low income folks.

        What exactly does the New Jersey Commission on Brain Injury Research bring to the table other than an opportunity for graft?

      3. Oh, and the Highlands Council. That’s obviously racist.

    2. Please don’t lose the Council on Local Mandates! What a cool name! Plus, they probably have renewed vitality now that the President is not enforcing the DOMA.

    3. THOSE ARE ALL VITAL SERVICES FOR TEH PEEOPLEZ OF NEW JOISEY! TO END ANY OF THEM WILL ONLY LEAD TO ANARCHYCHAOSSOMALIAOLDPEOPLEINTHESTREETSFIRESTSUNAMIDANGERWILLROBINSON!!!!11ONE!!!

  4. New Jersey’s government employees are already having “difficulty calculating with precision the full costs” of functions they are currently being paid to perform.

    Resolved: The full cost of a function is the salaries, benefits, pensions, and overhead of all employees tasked to perform a component of that function summed over the duration of the function. Was that so hard?

    1. We figured out that low estimate, schmuck! Now come up with a precision calculation, including second- and third-order effects. Show your work.

      1. You can leave out the EXTERNALITIES though, because government doesn’t create those.

        1. What are these “EXTERNALITIES” to which you refer?

  5. I’m surprised you didn’t dig into the real meat of the article, the incredibly weak arguments against privatization itself:

    If there were no public schools to ensure that all children are provided an education, we all would be the poorer for it. And when children attend private schools, public schools have less money to meet their obligations to educate all children.

    Typical statist ROADZ!!!11 fallacy. If we didn’t have government schools, no one would educate these dumb kids! Supply and demand, how the fuck does it work?

    1. For example, we need know: Will the work cost less because it is done more efficiently, or because wages are lowered and benefits are eliminated? Paying workers less does not provide better quality. It just impoverishes workers. And having workers unable to get health care for themselves and their families means coming to work too sick to do a good job and being worried sick about medical care for their families. It also means pushing costs off on hospitals, doctors, charities, and, ultimately, on the government and taxpayers.

      Yes, because that’s what happens when you work in the private sector. Workers get paid so little that they don’t do their jobs! Oh, and if we taxpayers don’t pay for all the bloated public sector workers’ salaries, they might have to pay for part of the cost of the private sector workers that replace them! We must pay it all otherwise we pay less!

      1. Although accountability ensures that work is done properly, some have claimed that private sector competition provides all the accountability that is needed. However, most services came to be provided by the government because there was no competition. Lack of accountability led to overcharging, poor or no service, and corruption in the past, and there is no reason to think that we will not have the same problems again.

        Examples of government services that were taken over because of private sector failures? Nope, guess not. Just going to assert a historical claim with no historical evidence.

        1. Lack of accountability led to overcharging, poor or no service, and corruption in the past

          EXACTLY – this kind of government ineptitude is why they need to privatize.

          Oh, wait, they meant….

    2. Sounds like he’s making an argument for vouchers.

  6. Fucking accounting and budget forecasting – how does it work?

  7. Shit like this almost makes me an antitrust fan:

    AT&T Inc. said Sunday it will buy T-Mobile USA from Deutsche Telekom AG in a cash-and-stock deal valued at $39 billion that would make it the largest cellphone company in the U.S.

    […]

    T-Mobile has relatively cheap service plans compared with AT&T, particularly when comparing the kind that don’t come with a two-year contract. AT&T CEO Randall Stephenson said one of the goals of the acquisition would be to move T-Mobile customers to smart phones, which have higher monthly fees. AT&T “will look hard” at keeping T-Mobile’s no-contract plans, he said.

    I’m sure they’ll look about as hard as Obama does at entitlement cuts.

    1. AT&T was just pissed off about the commercials. Buying T-mobile was the only way they could get them off the air.

      1. We need to pool our resources to buy Old Navy then.

  8. Even more deftly understated is Dannin’s reference to the real scandal here: New Jersey’s government employees are already having “difficulty calculating with precision the full costs” of functions they are currently being paid to perform.

    Well, no. They have people in the legislature appropriating money who (or at least whose staff) know to the dollar how much they are appropriating. A more accurate statement is likely that those government employees are understandably reluctant to publicize how much what they do costs, so they are stonewalling by feigning ignorance.

  9. Interesting News! I just now printed Coupons of my Favorite Brands and saved!! search for “printapons” online and save instantly, it is free

  10. Hey sevo imagine that a state wanting to sell off some of it’s assets to try and balance it’s budget. Capital assets , like roads, at that.

  11. due not only to the fact that the actual cost of a privatized alternative will often not be known until the end of a full fledged competitive bidding process, but also because New Jersey state government agencies have difficulty calculating with precision the full cost of functions currently performed at the state level.

    Ummmm….WHAT?

    1. One way out of this quandary is to incrementally decrease the funding of these functions, and when their performance stops you have bracketed the cost.

      1. Stop Making Sense

  12. “The real scandal here: New Jersey’s government employees are already having “difficulty calculating with precision the full costs” of functions they are currently being paid to perform.”

    Tim, this is Bureaucracy 101! A good bureaucrat never is able to calculate the actual cost of what he or she does, because this would allow for the very type of cost-benefit analysis on which privatization is based. One cannot determine potential savings if one cannot determine the present cost, now can one?

  13. The quoted matter states the central reason a public bidding process is preferable to the status quo: that it would allow competition for the state’s very scarce dollars.

    The counter-argument is that the state is selling off its services to the lowest bidder, which somehow means the lowest quality or something. To me, it sounds more like the fewest cronies.

    1. Right, but bidding processes are very specific about scope of work and deliverables, so again you have a more open and honest process for determining the cost. For reasons of her own, Dannin seems to think it’s a scandal that a bidding process doesn’t produce a final price until a bid has been accepted.

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