As the budget process for 2012 gets underway, a new report released last week by the Massachusetts Budget and Policy Center gives the state high marks for “efficient” spending. The report compares the cost of services purchased by state government, typically using unionized state workers, to the cost of services purchased by the public sector.
“We found that in each area, state government pays significantly less than private sector purchasers for the same or similar services,” wrote MBPC President Noah Berger in an op-ed about the report published in the Boston Globe. Berger’s group examined spending in three areas that, collectively, comprise about half of all state spending: health care, child care and primary and secondary education.
The report addresses a question that has informed political divisions in Massachusetts for decades: is the public sector or the private sector more cost-effective in the delivery of the same or similar services?
And while critics of the report’s conclusion that the public sector is “significantly” more cost-effective—and therefore inherently less wasteful—may be quick to note that the MBPC counts among its board of directors such liberals as former Gov. Michael Dukakis and Northampton Mayor Clare Higgins, the data calls into question a common conservative saw: that the public sector is rife with wasteful spending.
More than 20 years ago, during the Republican administration of Gov. William Weld, fiscal hawks pushed the privatization of many government services despite evidence that public sector employees provided higher quality service at the same or lower cost. The so-called Pacheco Law, the brainchild of Taunton Democrat Marc Pacheco, called Weld’s bluff, requiring agencies seeking to privatize a service to prove that the move would actually save money.
In recent years, the Pacheco Law has come under heated criticism from conservative interests, including, for example, the pro-privatization think tank Pioneer Institute and its former director, Charlie Baker, who pledged to repeal it during his campaign for governor last year. Its supporters contend that the law is only burdensome to those who would privatize services at an increased cost to taxpayers.
The timing of the MBPC report may also come into question, arriving just a week before Gov. Deval Patrick is scheduled to release his proposed fiscal 2012 budget. Expected on Wednesday, Jan. 26, Patrick’s budget is likely to boost aid to public schools. State leaders recently reached an agreement to begin the budget process with an anticipated $20 billion in revenue, a shortfall of about $2 billion.
In his piece in the Globe, Berger noted that the state spends $13,000 per student in the public schools compared to a $32,000-per-student cost for private school: “[As] long as our state is spending less than half as much per student as private schools—and educating a set of students with significantly greater challenges—it seems unlikely that the problem with public education in Massachusetts is that we are spending too much.”
For Nick Young, superintendent of the Hadley Public Schools, the report brings to public view “the unvarnished facts about the problems the public schools” continue to face. Young said he hopes lawmakers will take a hard look at the MBPC report before starting to look for places to cut.
“The bottom line is, there’s an insufficient amount of money for public education,” Young told the Advocate. The MBPC report is helpful, Young added, because it dispels a common political myth: “It’s never a bad thing to highlight the need for fiscal support for public education. But the [real value] of the report is that it shows the public sector as being efficient and cost-effective and responsive to the taxpayers. That runs counter to the stereotype.”
