NCPA - National Center for Policy Analysis

PRIVATIZATION WORKS

November 21, 2005

New York City succeeded in privatizing many city services under former Mayor Rudolph W. Giuliani's direction. In his book, "Privatization in the City: Successes, Failures, Lessons," Professor E.S. Savas of Baruch College cites examples of privatization that have taken place in New York despite challenges and union pressures.

According to Savas:

  • Of the 82 privatization initiatives proposed by Giuliani, 66 were carried out; contracting was proposed and carried out on 32 of 40 proposed services.
  • The city sold tax liens, its radio station, television stations, parking lots and garages, and the city-owned land under the United Nations Plaza Hotel.
  • Waste disposal was privatized, private contractors were hired to confirm eligibility for public housing applicants, and the city contracted with check-cashing companies to allow people to pay municipal bills at these locations.
  • The city saved $6.2 billion ($776 million annually) over Giuliani's eight years in office, amounting to about $3,296 per family of four.

Guiliani had a firm and unwavering commitment, says Savas. He used a combination of threats and rewards in dealing with large unions, yet there were no layoffs.

Privatization is taking place in other cities as well, such as Indianapolis and Phoenix, according to Savas.

Sources: Ted Balaker, "If I Can Make it There, I Can Make it Anywhere," Privatization Watch 29, No. 4, 2005, Reason Foundation; based upon: E.S. Savas, "Privatization in the City: Successes, Failures, Lessons," (CQ Press), May 30, 2005.

 

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