State lawmakers are taking a vote on a $38.1 billion budget agreement Wednesday. Among the key measures is a change to a 22-year-old law about privatizing government services.
The Pacheco Law requires state agencies to prove that outsourcing would save money, before they move forward. The new budget agreement suspends the Pacheco Law for 3 years and requires a state analysis of whether that suspension saves the state money.
The agreement comes as a new report by the Pioneer Institute says the law has cost the MBTA $450 million in savings since 1997.
Gregory Sullivan, research director at the Pioneer Institute and the former state inspector general.
Marc R. Pacheco, Senate President Pro Tempore.
- "As a procurement model, the Pacheco Law is antithetical to virtually every principle of fair procurement because it inordinately favors the incumbent provider, i.e. agency employees, over competing contractors."
- "Without a public, transparent process, taxpayers will be kept in the dark about the cost and quality of services provided, and there would be no one to hold contractors accountable. ... Without the law, taxpayers would have no way of properly vetting contracts and no way of knowing whether contracting out a service will save or cost them money until it’s too late."
- "The $38.1 billion bill (H 3650) would also suspend for three years a law requiring a vetting process before privatization of services at the MBTA, giving Gov. Charlie Baker a partial win on a key reform he proposed for the transit agency."
This segment aired on July 8, 2015.