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Public-sector outsourcing

Handcuffed by collective bargaining requirements and steep pension burdens, more and more defict-plagued governments are turning to a last-ditch option to balance their budgets and head off long-term liabilities: outsourcing.

There has been much wailing and hand-wringing in Santa Clarita, Calif., over a recent decision to let a private company manage three public libraries starting in July. The idea that a business might profit from operating something as egalitarian as a library is an affront to those who view government as benevolent and corporations as greedy and irresponsible.

“There’s this American flag, apple pie thing about libraries,” Frank A. Pezzanite, chief executive officer of Library Systems and Services, told The New York Times. His company already runs 14 library systems in multiple states. “Somehow they have been put in the category of a sacred organization.”

That’s because, like nearly every other municipal function, libraries are unionized. Workers enjoy salaries and benefits that exceed those of the typical private-sector worker, and they can retire early with a handsome pension.

And with tax collections dropping nearly everywhere, library districts no longer can afford the locked-in, ever-increasing, guaranteed pay raises and pensions they’ve promised. Library Systems and Services has promised to save Santa Clarita’s libraries $1 million per year by replacing unionized workers with nonunion labor and reducing overhead. Company workers get 401(k) retirement accounts with a generous 10 percent company match instead of a pension. The business has actually expanded hours at some of its libraries while reducing costs.

“A lot of libraries are atrocious,” Mr. Pezzanite told The Times. “Their policies are all about job security. That’s why the profession is nervous about us. … You come to us, you’re going to have to work.”

The profit motive is a more powerful driver of efficiency and productivity than compulsory taxes. After all, if Library Systems and Services doesn’t deliver and library patrons grow unhappy, the company will lose its contract.

Here in Southern Nevada, cities have actually promised bargaining units in contracts that they won’t explore outsourcing. That’s an affront to taxpayers, who deserve the best services governments can provide at the lowest possible cost — something they’ll never get without competitive pressure from the private sector.

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