professional~services~savings~report

professional~services~savings~report - Privatization...

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Privatization without Competition equals Huge Losses: How the New York State Government Wastes Hundreds of Millions of Dollars without Increasing Service Quality Frank J. Mauro Fiscal Policy Institute June 2005
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Acknowledgements The completion of this report would not have been possible without the assistance of the New York State Public Employees Federation’s Research Department. We particularly wish to thank Research Director Thomas Cetrino and Research Assistant Michael J. Marinello for completing a number of salary level calculations for us from the PEF Master File and the New York State Department of Civil Service’s composite report on filled state positions by title and salary grade level. We also wish to thank two state government agencies, the New York State Office of General Services and the Office of the State Comptroller, for the information that they make available to the public. Fiscal Policy Institute The Fiscal Policy Institute (FPI) is a nonpartisan research and education organization that focuses on the broad range of state tax, budget, economic and related public policy issues that affect the quality of life and the economic well-being of New York State residents. Founded in 1991, FPI’s work is intended to further the development and implementation of public policies that create a strong, sustainable economy in which prosperity is broadly shared by all New Yorkers. FPI has offices in Latham and New York City.
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Fiscal Policy Institute ~ Page 1 Privatization without Competition equals Huge Losses: How the New York State Government Wastes Hundreds of Millions of Dollars without Increasing Service Quality New York State could save up to $500 million a year by stopping sweetheart deals with high-priced consultants who are being overpaid to do jobs that state workers can do as well, if not better. It is indeed ironic that New York State is wasting hundreds of millions of dollars a year through the “contracting out” of professional services work when the very term “privatization” implies that it is a way to reap the benefits of a key element of private sector operations - competition. But in the way that outsourcing works in New York, there is virtually no competition. The result is that in most cases in which New York State contracts out for the performance of professional services, state taxpayers do not get the benefit of reduced costs nor does the state get higher quality work. There are situations in which the state contracts out for professional services that are so specialized that they can not be provided by state employees. But that only accounts for a portion of the state's contracting out for professional services. In the areas reviewed for this study, on the other hand, state employees can do much of the work involved and the state government could save hundreds of millions of dollars by hiring the needed professional employees rather than contracting out. Based on the analysis presented in this report, New York State should limit its contracting
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This note was uploaded on 02/08/2012 for the course ECON 388 taught by Professor Chaka during the Spring '11 term at SUNY Albany.

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professional~services~savings~report - Privatization...

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