Government
Affairs REPORT
Cuts state’s options:
Anti-privatization bill approved by Assembly
(March 3, 2006) Bearing the third-highest tax burden in the United States, Connecticut taxpayers rightly expect that state government will do all it can to provide the most cost-efficient and effective delivery of services.
But the General Assembly this week approved a bill that would do just the opposite — making it nearly impossible for state agencies to contract with Connecticut businesses to deliver certain services.
Approved by both the House and Senate, HB-5684 dictates such overly-restrictive contracting standards and procedures that it rules out the option of the state using private contractors, and thereby eliminates an important tool for making sure that Connecticut taxpayers get the most value for their tax dollars.
Steep hurdles — such as requiring potential subcontractors to take measures to hire state employees and pay all of the company’s employees wages and benefits comparable to those paid to state workers — will discourage businesses from even trying to win state contracts.
In most categories, state employees receive wages and benefits significantly better than workers in Connecticut's public-sector — sometimes as much as 95% more, according to the Yankee Institute.
What’s more, health care benefits in Connecticut's public sector are substantially better — including the portion of insurance-plan cost that is covered by employers and the quality and variety of coverage offered.
HB-5684 also calls for the creation of a new State Contracting Standards Board to develop new standards by which state contracting agencies must evaluate proposals to privatize state services.
But the bill all but renders such a board moot with regard to the privatization of state services by mandating that the proposal’s restrictive guidelines be the minimum standards the contracting board ultimately recommends.
The bill also requires companies seeking to do business with the state to certify in an affidavit that they did not reincorporate from the United States to outside of the U.S. on or after July 1, 2006 and thereby received a reduction in federal or Connecticut taxes.
This section would unfairly and unwisely penalize many Connecticut-based subsidiary companies for decisions made by their out-of-state corporate headquarters.
CBIA believes the state needs the flexibility to provide the best services at the best prices for the citizens of Connecticut and urges Gov. Rell to veto the bill as contrary to the interests of the state’s economy and taxpayers.
For more information, contact CBIA’s Eric Brown at 860-244-1900 or browne@cbia.com.
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