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North Carolina Budget Committee to Explore Privatization

Leonard Gilroy
August 26, 2009, 9:55am

North Carolina's new Budget Reform and Accountability Commission met for the first time yesterday, and privatization will be among the strategies the group considers in its efforts to right-size state government. Per the Asheville Citizen-Times:

Leaders of the Budget Reform and Accountability Commission acknowledged that they have a tough job, with only an advisory role to Perdue and the General Assembly on budget cuts that will inevitably raise hackles.

Such reform has been tried before. Perdue reflected on another government-reform panel in the early 1990s that saw some of its recommendations enacted but couldn't persuade legislators on others, like cutting back on state boards and commissions.

"Everybody knew that an ox needed to be gored, but nobody wanted it to be their ox," she said.

Perdue wants the General Assembly to take up-or-down votes on the commission's recommendations, an idea legislators have viewed skeptically. She said she would accomplish some recommendations unilaterally by executive order.

The idea of cutting down on boards could come up again, Perdue said. The commission is also looking into how the state makes purchases, how it pays for information technology, and how it funds the Department of Health and Human Services.

Every agency's budget will be scoured for duplication and unnecessary programs, co-chairman Norris Tolson said.

"We will take a serious look at privatization of certain services in state government," said Tolson, CEO of the N.C. Biotechnology Center and former secretary of revenue, transportation and commerce.

Gov. Perdue is on the right track by pushing for an up or down vote on the Commission recommendations—taking a page from the "original" BRAC (the federal Base Realignment and Closure Commission), where the up/down vote approach was the only realistic way to break down parochial political interests that would have had Congressmen scrambling to prevent military base closures in their districts/states. Voting straight up or down on the packages of base closures sidestepped those thorny political issues and led to meaningful closures.

I'm increasingly of the belief that this may be the only way out of the budget mess in a number of states where politics threatens the prospects for needed budget cuts and reforms, most notably California. However, legislators by and large tend to react negatively to such attempts to limit their flexibility in order to push tough decisions they would never put themselves in the position to make otherwise. Earlier this year, Louisiana Gov. Bobby Jindal tried the up/down vote approach when establishing the new Commission on Streamlining Government via executive order, but when the legislature subsequently codified the Commission into statute, they removed the up/down vote provision.

The reality is that without the ability to amend a reform package, legislators know that they would lose the ability to amend away cuts for pet programs and the like. My question is: if you screw up budgeting so badly that you've driven the state billions into the red, do you deserve not to be forced into the corner?

» Reason Foundation's Annual Privatization Report 2009
» Reason Foundation's Privatization Research and Commentary


Leonard Gilroy is Director of Government Reform


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