Sen. Baldacci introduces bill to safeguard taxpayer dollars from bad privatization schemes

AUGUSTA — On Friday, Sen. Joe Baldacci, D-Bangor, introduced a bill to safeguard taxpayer dollars by tightening requirements on privatization of existing state services. LD 875, “An Act To Protect Taxpayers in the Privatization of Services and To Establish the State Procurement Review Committee,” was the subject of a public hearing before the Legislature’s State and Local Government Committee.

“In the past, we’ve seen state services outsourced to private companies, only for costs to go up and quality of work to go down. That’s clearly not a responsible use of taxpayer money,” said Sen. Baldacci. “Maine taxpayers need to trust we’re investing their money wisely. This bill will put guidelines in place to make sure that if the state is going to outsource a service, it makes financial sense.”

Under LD 875, in order for the State to privatize services currently performed by bargaining unit employees, the State must first prove its cost saving assertions and that privatization is in the taxpayers’ best interest. If the State proposes privatization, the cost savings cannot be achieved simply by reducing the wages and benefits offered for performing the same work. If a privatization contract demonstrates cost savings, the winning bidder must offer employment to any displaced state employees. LD 875 is based on a bill from the 129th Legislature, LD 1458, “An Act To Protect Taxpayers in the Privatization of State Services,” sponsored by then-Sen. Shenna Bellows, D-Manchester. The bill died after the Legislature adjourned early because of the COVID-19 pandemic.

“When the state considers outsourcing of services that might otherwise be provided by a State employee, it is important to ensure that safeguard are in place to protect the interests of taxpayers and to ensure that the services in question cannot be provided as effectively by state workers and at a lower cost,” said Maine Attorney General Aaron Frey in testimony supporting the bill.

The bill faces further action in committee.