Privatization Done Right

Cross-posted to bluejersey.com

New Jersey’s experience with privatization has been unblemished by success.  Nevertheless, the state is in serious financial difficulty, and any potential solutions to provide state services more efficiently and at a lower cost should be seriously considered.

Unfortunately, Governor Christie is approaching privatization initiatives in a way that will not help, and will probably harm, the taxpayers.  He is repeating many of the mistakes that plagued the privatization of New Jersey’s 1998 motor vehicle emission inspection initiative, and he probably is inventing some new mistakes of his own.  Of course, his politically-driven Privatization Task Force report emphasizes the “success” stories and gives, at best,  lip service to the failures, both in New Jersey and elsewhere.

Privatization of some state services can save money if done right.  But doing it “right” does not mean firing state workers and employing a private company to do the same job with lower-paid  (and most likely less qualified) employees while the politically-connected contractor skims off a handsome profit at the taxpayers’ expense.  Since the contractor is accountable to shareholders and not voters, steps must be taken to ensure that the taxpayers’ interests are being addressed appropriately.  This requires oversight and insight by qualified and empowered state employees.  That cost must be included in the equation when considering privatization.

An important consideration is what services should be considered for privatization.  Services that are provided as commodities in the private sector are prime candidates if their implementation in the public sector is essentially identical.  An example would be payroll services where several vendors compete across a broad range of customers to provide compensation to a client's employees.  There must be adequate competition for these services in order to be considered for privatization.  After all, the ultimate goal is to provide more service for fewer dollars, and if the economies of scale and the pricing pressure of real competition in the private sector can be leveraged, then there’s a potential for a benefit to the taxpayer.  Privatization of critical infrastructure initiatives (like Governor Whitman’s failed Motor Vehicle Emissions contract) should receive extra scrutiny and non-partisan expert oversight, if done at all.

Even more important is how privatization initiatives are conducted.  Requests for Proposal (RFPs) should be carefully written and reviewed by independent, knowledgeable experts, not politicians or bureaucrats.  RFPs should be complete, down to the draft Service Level Agreements that will become part of the contract.  Incentives for exemplary performance, and penalties for poor performance, provide the State with leverage to ensure that our needs are met.  And of course, one of the most difficult but important aspects of choosing a potential private partner is the absence of political influence over that selection.

While ISO:9001 Quality Management System certification does not guarantee that a contractor will meet expectations, lack of such certification should also indicate that the potential supplier does not give quality  management adequate attention.  Thus, only potential contractors with a current ISO:9001 certification should be allowed to bid on major contracts.  Similarly, outsourcing of any programs that are IT or software-intensive should require at least a Level 3 (and preference should be given to Level 5) certification against the appropriate Capability Maturity Model Integrated process standard.

Industry-standard Risk and Opportunity Management processes should be implemented and rigorously followed even before the RFP is developed.  Properly implemented, Opportunity Management coupled with Six-Sigma initiatives can help improve cost, schedule, and technical performance of the outsourced services.    Coupled with this, frequent and in-depth technical and programmatic reviews by independent experts should be conducted for the larger initiatives.  The reports from these reviews for the largest initiatives (e.g. for those valued over $100 million) should be provided directly to the Governor, unfiltered by intermediate bureaucrats.

Is all of this oversight and insight expensive?  Sure – and it needs to be factored into the privatization equation.  But as Christie Whitman’s Motor Vehicle inspection initiative has proven, lack of such standard project management practices is even more expensive.

So if privatization is to work for the New Jersey taxpayer, the process must be robust and transparent.   Realistic cost estimates must include those for effective oversight.  Unfortunately, oversight and transparency are not in the current vocabulary of the state’s executive branch.  So before the taxpayer is asked to support significantly more privatization, there needs to be a culture change in Trenton.

Get to Work, Mr. Governor

Cross-posted to bluejersey.com

OK, Mr. Governor.  You bullied the Legislature and now you have your fershluggener cap on property taxes.   While you got your political points, you really did not do much to help New Jersey residents.  At the same time, you have ensured that the services, infrastructure, and attractiveness of New Jersey will deteriorate more rapidly.  You did nothing on the spending side other than make arbitrary cuts – geez, a six-year-old could do the same thing.

When will you get down to the hard work of governing?  Yes – the state is in a budget crisis, but your simplistic approach will just make things worse.  Why don’t you use your humongous bully pulpit to implement real change?  Like any complex system, effective change can’t happen overnight, nor do simplistic solutions work.  The state is crying out for revolutionary change, not incremental ones. 

Let’s start with consolidation – both municipal and for schools.  No one said it would be easy.   There are too many embedded interests who will throw roadblocks in the way of their pet fiefdoms.   Doing it right will be hard.  There are areas where consolidation savings will be minimal, but based on my experience, I suspect that there’s enough low hanging fruit out there that could reduce state expenditures by at least 20% with the right approach.  It will require a tough SOB to make this happen against the built up inertia in our government – are you man enough to tackle that one?  Or are you just content to score political points by continuing on with simplistic approaches?

There are those who say that government should be run like a business.  That’s crap.  Governments are there to serve the people; businesses exist to make a profit.  Yet, there’s one aspect of business that enlightened governments have successfully adopted – the embrace of Six-Sigma practices to systematically root out waste in our processes.  This is also not easy, because it requires a change in the culture of the people affected.  It should be run as a campaign and will take several years.  As with consolidation, there will be the naysayers who preach “we’ve always done it this way.”  But the results can be astounding.

So, Mr. Governor, take your victory lap but remember that you’ve only done the easy part of your job.  Now, get to work.

Ask. Tell.

The second half of the twentieth century will be remembered as the time in our nation’s history when a gross mistake made by our Founding Fathers in the Constitution finally was rectified. The Constitution institutionalized the notion that African-Americans were not to be afforded all the rights of Americans. While the Civil War and the 14th and 16th Amendments removed the legal barriers, advances in civil rights for African Americans did not take root for one hundred years after those historical events. This is far too long a span of time for a nation that prides itself on equal rights for all.

Many factors contributed to the change in the majority’s attitude and the attainment of rights for African Americans over the years. During World War II, partially at the prodding of First Lady Eleanor Roosevelt, one barrier was slowly broken. The war effort needed pilots, bombardiers, and navigators for combat in Europe and the Pacific. To help address this need, the 332nd Fighter Group of the Army Air Corps was formed. These aviators, commonly known as the Tuskegee Airmen, were the first African-American pilots in the U.S. military. While they served with skill, bravery, and distinction, the attitude in the military, like the attitude among civilians, was resistant to change, and that change took a long time to implement. “Separate but equal” training and operational facilities were built for the Airmen, and in those rare instances where the African-American aviators worked alongside their white counterparts, there was still segregation in facilities, housing, and other everyday life activities. Even after the war, not a single one of the Tuskegee Airmen was hired as a pilot by the commercial airlines. At the time, there was much consternation among the airmen about the “separate but equal” facilities, but some of the aviators, as well as liberal-minded politicians, considered that a necessary evil toward the greater goal of full equality for African-Americans in the military.

Of course, the struggle for rights in the military was just a microcosm for the larger struggle. The landmark Brown vs. Board of Education decision in 1954 set the stage for full integration, but it took several generations for effective implementation. (One wonders how today’s activist Supreme Court would rule on a similar manner). Despite the advances of Dr. King, the sacrifices of Goodman, Chaney, Schwerner and others, there are still events that show the racial divide has narrowed but is not closed.

Nevertheless, much progress has been made in the last half-century for African-Americans’ rights. The election of Barack Obama is not the culmination of that struggle, but rather the next chapter in an ongoing initiative to ensure equal rights for African-Americans and Americans overall.

Unfortunately, the end of the twentieth century was also marked by events that diminished the rights of another group of Americans: gays and lesbians. While discrimination and violence against homosexuals have been with us even before the days of J. Edgar Hoover and Senator Joseph McCarthy, it was President Clinton who signed into law two bills that institutionalized discrimination and took away rights from millions of American. In 1993, he approved the featherbrained policy of “Don’t Ask, Don’t Tell” (DADT) in the military, and in 1996 approved the Republican wedge issue by signing the equally ridiculously-named “Defense of Marriage Act”, which defined marriage at the Federal level as a union between a man and a woman.

As in the case of the Tuskegee Airmen and African-Americans serving alongside Caucasians, there are those who decry the concept of homosexuals serving side-by-side with heterosexuals in the military. And like the case of the Tuskegee Airmen, gays and lesbians have served their country with distinction and honor. To paraphrase World War II journalist Ernie Pyle, “There are no homophobes in foxholes.” In today’s military, which is stretched thin by two unnecessary wars, the policy of not allowing gays and lesbians to serve their country is not just wrong, it is also counterproductive and harmful to the war effort. Yet, President Obama’s campaign promise to repeal DADT is moving at a pace that would make a snail seem like a Lamborghini in comparison.

Elimination of the “Defense of Marriage Act” is also moving at a slow pace. Last year, 91 congressmen signed on to an effort to repeal this inappropriate legislation. More recently, a District Court judge in Boston ruled that DOMA was unconstitutional – he made the right decision for the wrong reason. The judge’s rationale was that marriage is a state’s rights issue – the same rationale that was used to perpetuate segregation before the Brown decision. What he should have ruled is that DOMA is unconstitutional because it violates the First and Fourteenth Amendments. The “Separate but Equal” concept of civil unions is as wrong and ineffective as “separate but equal” schools were for African-Americans.

The struggle for African-American civil rights was a long, often violent one – and it is by no means over. By comparison, the struggle for gay and lesbian rights is just starting. As we approach America’s bicenquinquagenary, let’s ensure that equal rights are just that – equal for all Americans – black, brown, and white; gay, straight, and transgender; Muslim, Jewish, Christian, and atheist; and any other variant of the human condition that exists. Instead of “Don’t Ask, Don’t Tell”, ask yourself if America is meant to institutionalize second class citizenship and deny rights to anyone, and tell your elected officials to remove any and all legal barriers that deny you and your neighbors full and equal rights. It shouldn’t take another 100 years for America to realize its full potential.

The Adler - Runyan Debate

Cross-posted to bluejersey.com

Being an offensive tackle in the NFL is tough. It's tough physically, but there's also a non-physical component of the game that must be mastered. In today's game, the multitude of plays are complicated, and you have to memorize a large number of formations and be able to react instantly with a canned set of responses to defensive maneuvers.

In today's debate between John Adler and Jon Runyan, hosted by conservative talk radio host Michael Smerconish, Mr. Runyan demonstrated why he was a successful NFL player. He had memorized and successfully parroted all of the Republican talking points that were given to him by his handlers. The former NFLer even went so far as to regurgitate quotes from Democratic icons John F. Kennedy and Daniel Patrick Moynahan, as well as from conservative demigod Ronald Reagan. As he did in his NFL career, Mr. Runyan did his homework and memorized the playbook masterfully.

First-term Congressman John Adler, on the other hand, demonstrated that he is an intelligent politician. Those who support him would interpret this to say that he has shown that he is an independent thinker who doesn't always fall in lock step with the party line. Those of us who are a bit more cynical would say that he is moving to the right in order to capture the conservative voters of Burlington and Ocean counties. To help establish his conservative creds, Mr. Alder quoted not politicians, but instead referred several times to articles in Rupert Murdoch's Wall Street Journal.

Regardless of which view you take, it is clear that Mr. Adler is the more qualified and independent-minded of the two candidates. He brags of being a centrist at a time when the nation needs more progressive voices in the House. His positions on offshore drilling, immigration reform, health care and other issues would perpetuate many of the problems we see today and don't give us the real change that this country needs. Yet, a vote for Mr. Runyan would be a vote for the policies of George Bush, Newt Gingrich, and John Boehner, and would continue to benefit the corporatists at the expense of the American middle class. So this year, for those of us in New Jersey's Third Congressional District, it's once again the choice of the lesser of two evils. A vote for Adler brings the “evils” of a hard-working intelligent centrist. A vote for Runyan brings the evils of the Tea Party, John Boehner, and Glenn Beck. The choice is clear.

An Open Letter to Tea Baggers

Dear Tea Bagger,

I had a wonderful time celebrating our country's independence this year at the Jersey Shore. Before I left, I checked the taxpayer-funded weather service to figure out what clothes to pack. I traveled on taxpayer-funded highways across a taxpayer-funded causeway to a barrier island whose beauty is maintained by taxpayer-funded beach restoration. On the way here, we passed through the awesome New Jersey Pinelands, which are protected by taxpayer funded initiatives and strict governmental environmental regulations. Here at the shore, I viewed an impressive Fourth of July fireworks display, and although the fireworks may have been privately funded, the taxpayer-funded local police kept the hoards of traffic moving safely through the small towns before and after the event. I'm glad that the house that I am renting has indoor plumbing – I can't imagine what an outhouse must smell like in the 100 degree heat. Of course, that plumbing infrastructure was funded by the taxpayer, and I hope that its required maintenance is also being taken care of.    Oh – I forgot to mention that I am posting this letter on the internet – whose impetus came from taxpayer-funded research and development dollars.

I know that you would prefer that the only thing we spend our tax money on is wars and subsidies to corporations. But I thank you for throwing a small part back to me to develop and maintain the infrastructure and environment that made my vacation pleasant.

Sincerely,

Deciminyan

Christie's Misplaced Priorities

Waiting until a building is on fire to install a sprinkler system doesn’t make sense.  But that is exactly what Governor Christie and the bumbling State Legislature is doing in their Keystone Kops holiday weekend extravaganza.

Maybe property tax caps make sense, and maybe they don’t.  But right now, we are in a short-term fiscal crisis and diddling with tax caps is, at best, a long-term “solution.”  Instead, our elected officials need to look at bold near-term approaches and stop playing around the edges. 

One such bold solution is county-wide consolidation of school districts and municipal services.  If the governor is going to use his bully pulpit to promote necessary but unpopular initiatives, this is where he should concentrate.  Consolidation, along with a BTTW lean/six-sigma approach to state services will drive out costs, improve services, and bring us toward fiscal equilibrium. 

Our governor blew it with the veto of the millionaire’s tax.  And he is blowing it with his draconian approach that is driving the quality of life in the state on a downward spiral.  How about it, Mr. Governor?  Can you leverage your divisive approach to benefit all New Jerseyans, not just your cronies?  Or is this too much for even you to tackle?

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Cross-posted to Blue Jersey

Shared Sacrifice

Like most other states, here in New Jersey, we have had a long-standing financial crisis – brought on by poor governance by both parties and exacerbated by the Bush financial meltdown.  Last year,  Chris Christie was elected governor on a platform of “shared sacrifice”; that is everyone in the state would be called upon to help dig us out of this hole.  (This was a broken promise, but that's the subject of another blog.)

The crisis in New Jersey pales in comparison to the crisis in the Middle East.  The Bush/Obama wars of choice have been going on longer than any of our previous wars, which for the most part were wars of necessity.  But except for those have a loved one in the military, the wars are not having a significant impact back home.  The reason is that, unlike in other wars, we are not being asked to “sacrifice” to achieve military goals.  Any contribution to the “sacrifice” is being handled solely by the troops and their families, and by our children and grandchildren who will be paying the debt for these wars in decades to come.

War is horrible, and if a country decides to go to war it must weigh the benefits with the real and the hidden costs.  If continuation of these wars is to be justified, then the entire country needs to be involved.  Only then, by sharing in the burden of the wars, can the general population make the informed and rational decision on the wars’ worth.

Two things need to happen immediately:

Make the Wars a Pay-as-You-Go Proposition

The Middle East wars have robbed our treasury of one trillion (that’s a million million) dollars with no end in sight.  We are spending one billion dollars a day – for what?  More troops have been killed than the number of people who died in 9/11.  Those who were injured will be (rightfully) covered for rehabilitation for the rest of their lives.  Yet, the Republicans and some Democrats are so fiscally and morally irresponsible that they are promoting tax cuts.  We should immediately impose a progressive tax surcharge to pay for the war so that all Americans are called upon to share in this sacrifice.  The surcharge should be real but small for the lowest income wage earners and progressively increase to, say, 50% of incremental gross income for people earning over $500,000 per year.  Similar surcharges should be levied on corporate taxes.  Those who benefit most from our country’s economy should contribute more for these wars that are primarily benefiting corporate America.

Re-instate the Draft

The volunteer military is a good idea in time of peace.  And if there is a justifiable war, like World War II, I have no doubt that able-bodied Americans would enlist in droves.   No doubt, in today’s military, there are also thousands of enlistees who gladly volunteered believing they were avenging the horrors of 9/11.  But there are also thousands of “volunteers” today who look at the military as employer of last resort.    Yet, the services are so strapped for manpower, they are lowering their standards for enlistment to include ex-felons.  And they are sending troops back to the front for four or five tours of duty with little rest between deployments.

We should bring back the draft, and include everyone.  Men and women, rich and poor, gays and straights.  Those who are not able-bodied enough to serve should be required to perform equivalent service at home – working with the poor, or doing other similar service.  Deferments should be rare.  And to reward those who do serve, generous college scholarships should be available upon completion of service.   That’s a win-win situation.

By instituting war taxes and compulsory service, we move toward a “shared sacrifice” that any war must be conducted under.  And if these shared sacrifices are too much for the country to bear, then the debate over the justification for these wars will become more relevant.