[Source: Howard Fischer, Capitol Media Services, via East Valley Tribute]
A panel appointed by Gov. Jan Brewer to study government made its first recommendations Tuesday to turn more of it over to the private sector.
The initial report by the Commission on Privatization and Efficiency suggested the state pursue more opportunities to turn parks over to private companies or at least let them operate retail concessions. Members also want to push Congress to repeal laws that now prohibit the state from letting private firms set up shop in rest areas along interstate highways.
But state Gaming Director Mark Brnovich, whom Brewer named to head the panel, said this is only the first step. He said the nine-member commission, hand-picked by the governor, is predisposed to believe that if a government service can be privatized, it probably should be.
“Like the governor, members of the commission are strong believers in the free enterprise system and the free market,” Brnovich said in an interview with Capitol Media Services. “History has shown that the private sector is able to come up with innovative and, very often, cost-effective solutions to problems.”
Brnovich acknowledged that private companies, unlike government, have to make a profit. But he said commission members don’t see this as meaning higher costs for taxpayers.
“The free market system, capitalism works because folks are forced to come up with better ideas and create greater efficiencies and come up with new innovations,” Brnovich said. He calls it the “yellow book test.”
“If a function is available, if you can look at it and find it in the ‘yellow book,’ you should ask yourself, ‘should government be doing that?'” Brnovich said. “And if government is doing it, should it be done in conjunction through public-private partnership or can it be done in a better, more efficient way?”
Brnovich said this initial list of options includes those things that either already are underway or can be done relatively simply.
For example, the state contracted last year with the city of Yuma to operate the Yuma Quartermaster Depot State Historic Park. And the Arizona Parks Board has since worked out other deals with local groups to help keep parks open.
The commission, however, wants more, including giving private companies the opportunity to actually run the parks, collect all admission fees and pay the state a percentage. The report suggests this would be profitable for private companies by allowing them to sell food and other items and even operate lodging, as concessionaires do at Grand Canyon National Park, albeit with the federal government still running that one.
Brnovich said that, despite the bent of commission members toward privatizing, that doesn’t necessarily mean state agencies would be put out of business and employees laid off. He said these agencies could submit bids, just the same as private groups.
That concept, called “managed competition,” has been used in some communities to award contracts for trash collection.
He said that concept will be studied before the final report is issued at the end of this year.
But Brnovich said measuring costs and benefits is only part of any analysis of what to privatize.
“Additionally, you have to ask the question, is this something government should be doing and, if so, can it be done in a better way and can it be done in conjunction with the private sector or by the private sector?” he said.
Brnovich said there are certain “core government functions” that, political philosophy aside, probably should not be farmed out. That includes his own agency which oversees tribal gaming.
He acknowledged there are functions within his office that might, under other circumstances, lend themselves to outsourcing, such as audits of the books of tribal casinos. But Brnovich said the secrecy required in the contracts with tribes makes it more logical for all that work to be done “in house,” with employees who are subject to background checks.
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