Pacheco Law waivers won’t deliver savings to taxpayers

In 1993, the Massachusetts Legislature passed An Act Providing for the Delivery of State Services in a Fiscally Responsible Manner (commonly referred to as the “Taxpayer Protection Act” or “Pacheco Law”) to curb rampant private-sector exploitation. Outsourcing public work to private contractors had exposed the commonwealth to a troubling cycle of fiscal abuse. Third-party deals were draining state finances and lining private-sector pockets with taxpayers’ hard-earned money.

For nearly 25 years, the Pacheco Law has successfully shielded Massachusetts citizens from these unchecked privatization schemes. The law simply requires proof that a private contract will save the state money while providing at least the same quality of service. Those who oppose the law routinely exaggerate and vilify its transparency requirements. In reality, these two basic requests are reasonable conditions that provide crucial safeguards against exploitation.

Following the winter storms of 2014-2015, the MBTA petitioned the Legislature for a three-year Taxpayer Protection Act exemption. The waiver expired this June without any request for an extension, but proponents have begun to echo familiar rhetoric about its alleged benefits. These optimistic expectations about the impact of privatization ignore a lengthy track record of waste, fraud and abuse.

As expected, the latest MBTA projections speculate that the waiver will save $450 million over the next 10 years. But complying with the Pacheco Law only requires equal service quality and proof of those savings. So if these claims about savings are really true, why would a waiver even be necessary in the first place? It wouldn’t.

A transparent public process for assessing the costs and benefits of private contracts already exists, i.e. the Pacheco Law. Now, after sidestepping those requirements, the MBTA asks us to rely on its own selfassessment as accurate accounting. Layoffs from private contracts ultimately cost the state more money. Abandoned private contracts ultimately cost the state more money. The MBTA report refers to ambiguous “improvements” and “anticipated savings” without breaking down any of its underlying calculations. In the absence of a transparent public process, we cannot rely on reckless speculation to determine the true cost of privatization.

Contracts must be vetted with proper checks and balances. That evaluation does not happen without statutory taxpayer protections in place. Massachusetts citizens deserve to see cold hard proof that their state government bases its decisions on cost, competition and value. That’s what the Pacheco Law has done in Massachusetts for nearly 25 years and, thankfully, what it will continue to do again now that the statutory exemption has concluded.