Legislation Assembly Democrats Valerie Vainieri Huttle, Paul D. Moriarty, Gabriela Mosquera and Daniel R. Benson sponsored to make cost savings a prerequisite for the privatization of public services received approval on Monday from the General Assembly.
The bill (A-2873) requires a bidding process and subsequent cost analysis proving definitively that privatization would be less expensive, allow for the same or better quantity and quality of services and cause no increased burden on taxpayers.
“Providing public services through private contractors should be considered only if it promotes the public interest,” said Vainieri Huttle (D-Bergen). “It makes fiscal sense to require a thorough review and analysis of potential cost impacts prior to entering into any privatization contract. Determining that cost savings will be substantial and significant before entering into such an agreement is necessary to protect the public from incurring greater costs from using private contractors in the long term.”
“Regardless of whether privatization ultimately turns out to be the best option, the fact of the matter is that this bill puts New Jersey’s taxpayers first,” said Moriarty (D-Camden/Gloucester).
“As many residents of our state continue to struggle financially, a bill like this – one that emphasizes the commonsense idea of fiscal responsibility – is so important,” said Mosquera (D-Camden/Gloucester).
“This all comes down to choosing the most cost-effective services for taxpayers and acting in the public interest, which we’ve all taken an oath to do,” said Benson (D-Mercer/Middlesex).
The provisions of the bill would apply to privatization contracts with a total value of $250,000 or more. Should the bill become law, its provisions would apply only to contracts first entered into after the law takes effect.
If a state agency ultimately determines that pursuing a private contractor would be the most cost-effective option, the agency would be required to issue a comprehensive written analysis demonstrating cost savings to the Office of the State Comptroller. In addition, the State Auditor would conduct a post-audit of the contract, with the agency or contractor subject to penalties for noncompliance.
The measure passed today in the Assembly by a vote of 48-30. The Senate last week approved the bill 24-14.