Bellows bill to safeguard taxpayer dollars from bad privatization schemes clears committee

A bill introduced by Sen. Shenna Bellows, D-Manchester, to safeguard taxpayer dollars by tightening requirements on privatization of existing state services was approved in a 5-4 vote in the Legislature’s State and Local Government Committee on Wednesday.

LD 1458 “An Act To Protect Taxpayers in the Privatization of State Services” is modelled on a successful law that’s been on the books in Massachusetts for more than 25 years. The bill would require contractors to meet several criteria proving that privatization is in the public interest before receiving a contract to perform duties previously handled by state employees.

“This bill will help restore trust for Mainers that government works for them, and that taxpayer funds are being spent responsibly,” said Sen. Bellows. “There are times that privatization are maybe appropriate in a given instance, but there should be safeguards.”

The bill creates a process for review of any privatization of state services which would ensure that: quality of the service is maintained; cost of the service under privatization, including lost income tax revenue, will be cheaper; the entity with whom the state is contracting has a proven track record of compliance with all relevant state and federal laws including safety and health, nondiscrimination and environmental; and privatization is in the public interest.

Sen. Bellows submitted the bill after several high-profile problems with the provision of state services by private contractors.

For example, in 2016, the state outsourced a bridge painting job in Portland to a firm that didn’t understand lead paint removal, resulting in significant site contamination and increased cleanup costs to the state and taxpayers and an environmental and health hazard.

In 2015, it awarded an out-of-state company with a contract to operate the state’s largest and most heavily trafficked drawbridge, which had been operated by state employees for years. The contract saved zero dollars for Maine taxpayers, and the company immediately advertised job openings stating “no experience required.”

Lastly, in 2016, the state outsourced the administration of several welfare programs to an out-of-state company that has been sued at least a dozen times in state and federal court in less than five years for workplace discrimination, wage, and disability and personal injury disputes. Oversight of the contract will cost the state more money than maintaining the service in-house.

The Maine State Employees Association and American Federation of State, County and Municipal Employees both testified in favor of LD 1458 at a recent public hearing.

LD 1458 now moves to the Maine House and Senate for additional votes.