Although the 2009 budget drama has subsided, the 2010 budget is just around the corner. It promises to be no less dramatic. While legislators work to break the snowballing budget cycle, they should consider new innovations such as privatization of some California infrastructure and functions.
For proof of success, look no further than The Reason Foundation’s recent findings in its Annual Privatization Report, which presents alternatives to the age-old battle over whether to raise taxes or cut spending. Instead, governments have the opportunity to reduce liabilities while modernizing and streamlining procurement practices, creating more transparent and simplified processes, and encouraging a new level of competitiveness among local businesses.
While California has barely dipped its toe into privatizing waters, many other states have jumped in with both feet.
One good example is West Virginia, whose privatization of its workers’ compensation insurance program. The move was considered a success in terms of handling of claims, lowering rates, and reducing the state’s liabilities.