Issue Position: IDENTIFY Opportunities for Privatization

Issue Position

Too often government attempts to take over functions which are better performed by the private sector. There are increasing opportunities to embrace privatization as a strategy to not only lower the costs of government but to achieve higher performance and better outcomes for tax dollars spent. As State Auditor, I will champion identifying opportunities to outsource and privatize government functions, providing the taxpayer with the best value for their tax dollars.

I support the efforts of the Utah State Privatization Policy Board which was established by the Utah State Legislature to be a focal point to study and to make recommendations about opportunities for privatization of government services. I believe that the State Auditor's office would be able to contribute to and support the efforts of this Board by identifying, during the performance audit process, specific functions and activities that lend themselves to private providers or public-private partnerships, providing policymakers with additional information. According to the Board, privatization is desirable when:

It is likely to reduce cost to the taxpayers.

Services are readily available from several competing private for profit companies or other organizations.

It is likely to improve the efficiency or quality of the service being provided.

Sufficient controls are in place to protect the public from incompetence misuse of funds, and to ensure the integrity of the contracting and procurement process to provide for fair competition in securing government contract.

It eliminates or reduces unfair competition with the private sector.

Privatization efforts throughout the United States that involve the shifting of some aspects of government service delivery to private sector, have been demonstrated to be successful in lowering the cost of government and achieving higher performance and better outcomes for every tax dollar spent. These actual efforts nationwide have resulted in some of the following results:

Cost Savings: A review by reason.org of over 100 studies of privatization showed that cost savings ranged between 5 and 50 percent depending upon the scope and type of service and in general resulted in a savings of 5 to 20%;

Improved Risk Management: Both cost containment and risk mitigation can be transferred from the government and taxpayer to the private sector, which may be better equipped to reduce these risks through management techniques;

Quality Improvements: Competition between vendors who value the contract frequently results in quality improvements as vendors seek to provide the highest available quality at an effective price in order to retain the contract;

Timeliness and Meeting Fluctuating Needs: Private sector providers may have more staffing flexibility than government agencies, thus allowing increase of staff on short notice, when needed;

Access to Outside Expertise: A government agency may not need certain, expensive, expertise on a full time basis. Instead, a contract with an outside vendor may allow access to expertise when needed, at a lower overall cost;

As a decade-long champion of lowering Utah's tax burden, improving Utah's economic competitiveness, and balancing our State budget, I believe privatization can be an effective tool to reduce the expense of State and local government while maintaining quality of services to our citizens. If elected as State Auditor, I'll keep focused on this key opportunity for Utah!

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