Governor Arnold desperately wants to bring new jobs into California, but there's at least one sector he's rightly trying to shrink: government jobs.

SACRAMENTO -- Gov. Arnold Schwarzenegger's efforts to downsize state government and privatize some services challenges Sacramento's ultimate sacred cow -- the powerful public employee unions -- and triggers a political battle that is certain to be far tougher than trying to balance the budget without new taxes.

In his budget proposal, the governor calls for a constitutional amendment that would give him broad powers to contract with private firms when it will "reduce costs, improve efficiency or improve services."

Imagine that!

The best part is how Arnold is selling proposal:

He calls the effort "competition" for state services rather than "privatization" because the stated goal is for public employees to keep their jobs by outbidding contractors, which means they would have to accept lower salaries and benefits or require fewer people to get tasks done.
Competition is good for the private sector, and it's good for government. Competition encourages efficiency and quality, both of which are in short supply in California's public sector.

The key to success is close oversight of any private contractors by their client, the State of California. Corporations are motivated by profit, and it's necessary to monitor performance to prevent corner-cutting and to make sure the quality of service remains high. Such oversight could be done with a fraction of the current number of employees, however, and cost savings would probably be substantial (I've read -- though I don't remember where -- that similar efforts in Florida reduced program costs by 8% to 40%).



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