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Brewer vetoes privatization bill for city services

Gov. Jan Brewer vetoed a bill that would have forced Arizona’s two largest cities to bid out expensive municipal services, saying her support for privatization was eclipsed by severe flaws in the legislation and its encroachment on the authority of local government.

In her veto letter, Brewer said Senate Bill 1322 was “riddled with shortcomings.”

The governor said the bill did not stipulate how cities were supposed to anticipate costs, jeopardized the tax-exempt bond status of public buildings and opened to privatization critical public safety functions that she felt should stay under municipal oversight, including court administration and crime labs.

The bill would have required any city of more than 500,000 people – a category that only includes Phoenix and Tucson – to allow private companies and other cities to bid on any city service that cost more than $500,000. City residents would have been allowed to sue the cities if they did not comply with the bill.

“City councils currently have the ability to outsource and they do that when they determine it is in the best interest of the taxpayer,” Brewer wrote.

Brewer emphasized her longtime support for privatization and said SB1322 was inspired by the same spirit of “enhanced privatization and innovation” as her Commission on Privatization and Efficiency and the Arizona Commerce Authority.

But in addition to her technical problems with the bill, she indicated serious philosophical concerns with state efforts to control local government decisions.

“I am becoming increasingly concerned that many bills introduced this session micromanage decisions best made at the local level. What happened to the conservative belief that the most effective, responsible and responsive government is government closest to the people?” wrote Brewer, a former Maricopa County supervisor.

Sen. Frank Antenori, who sponsored the bill in partnership with Phoenix City Councilman Sal DiCiccio, acknowledged that the bill had serious flaws. For example, he said the bill didn’t adequately define the processes for bidding out services or protect services that have already been privatized.

“She made some good points in her veto letter that I take to heart, and I agree with several of her points. A couple I don’t agree with, but I think that we’ve got some insight into what she’s looking for,” said Antenori, a Tucson Republican.

Antenori said he plans on convening a stakeholder meeting in June so the bill can be revised for the 2012 session. He said he will focus on about six services that are “prevalent in the private sector” and not exclusive functions of government. Court administration, he said, is not generally considered a private sector service, he said, but landscaping, janitorial services and vehicle maintenance are.

He also said the bill should be expanded to include all cities, not just Phoenix and Tucson.

Ken Strobeck, executive director of the Arizona League of Cities and Towns, said he was grateful that Brewer vetoed a piece of bad legislation that was “completely unnecessary.” Though the bill only applied to Phoenix and Tucson, 19 others cities signed in as opponents of the bill at the Legislature.

“She has been an advocate of privatization, but she’s also been in local government and she understands the unique challenges that being a local official has,” Strobeck said of the governor. “Let’s let local decision-makers at the city level decide what’s appropriate for cities. I think that’s the most important message of this piece of legislation.”

Phoenix Mayor Phil Gordon also released a statement applauding Brewer’s veto of SB 1322, which he called deeply flawed and poorly drafted.

“SB1322 was a massive overreach by a Legislature that has failed to keep its own fiscal house in order. The bill’s unintended consequences would have cost taxpayers millions, jeopardized the tax-exempt status of critical municipal bonds, created logistical nightmares for cities and vendors, and risked the interruption of municipal services,” Gordon said. “SB1322 was a clumsy solution in search of a problem.”

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