The State Worker

Chronicling civil-service life for California state workers

August 20, 2008
The fight to be cheaper: Public vs. private

What's cheaper, public or private?

That thorny topic is one strand of the tangled issue we address tomorrow's State Worker column about CalPERS' decision to invest in public-private partnerships that build roads, water projects, communications facilities, bridges and such -- as long as the private part doesn't step on public jobs.

We won't take the time to unwind CalPERS' infrastructure investment policy again -- you can read those blog posts here. But now take a look at the dueling info presented by the Professional Engineers in California Government and the American Council of Engineering Companies of California.

The state engineers contend that public workers the cheaper way to go, and they have numbers to back them up. They point to this estimate by the the Assembly Budget Subcommittee ("Contract positions are budgeted at about $217,000 and state staff positions are budgeted at about $121,000 -- including benefits and standard operation expenses and equipment." and this document by the Senate Committee on Budget and Fiscal Review: "State staff cost $121,000 (including all benefits and the standard cost of operating expenses and equipment) and contract out resources cost $217,000 per FTE. ... By whatever measure is chosen, state staff are less expensive than contract-out staff."

The council, which represents private engineering and surveying firms, counters with several studies that show other states and countries use PPPs to great effect. One it commissioned says, "We find that ... the amount the State must pay to utilize an in-house engineer ranges from $173,434 to $209,212, while the amount paid for an outside engineer averges $193,000."

So who to believe?

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About The State Worker

Jon Ortiz The Author

Jon Ortiz launched The State Worker blog and a companion column in 2008 to cover state government from the perspective of California government employees. Every day he filters the news through a single question: "What does this mean for state workers?" Join Ortiz for updates and debate on state pay, benefits, pensions, contracts and jobs. Contact him at (916) 321-1043 and at jortiz@sacbee.com.

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