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Should government compete with the private sector?

The Governor said yesterday in the State of State that "Jobs are the way out of this recession." Based on a bill introduced today, some lawmakers believe that one way to increase private sector jobs is to stop government from providing commercial type activities.

Here are some of the details from HB 2808 - Regarding commercial activities by state government:

Sec. 1. (1) The legislature finds that in the process of governing, the state of Washington should not engage in commercial activity in competition with its citizens. The legislature finds that the competitive enterprise system, characterized by individual freedom and initiative, is the nation's primary source of economic strength, and that the growth of pr! ivate enterprise is essential to the health, welfare, and prosperity of the citizens of the state of Washington. The legislature further finds that the role of the private sector is to provide commercial products and services for which there is demand in the marketplace, while the role of state agencies is limited to performing functions that are in the public interest and inherently governmental in nature.

(2) The legislature therefore declares it to be the general policy of the state that state agencies are prohibited from providing to the marketplace for a fee those products or services that could be obtained from a private enterprise . . .

Sec. 2. (1) State agencies are prohibited from engaging in commercial activities for a fee, unless they are granted an exception by the office of financial management.

Continuing this theme, Sen. Joe Zarelli (R-18) issued a new "Budget Tidbit"! today focusing on the need for the state to take advantage of the seldom used competitive contracting reform adopted in 2002. Zarelli recommends that the state enact a Competition Council to determine "the privatization potential of a program or activity and performing a cost-benefit analysis."

We highlighted how other states are utilizing Competition Councils in our recent competitive contracting study.

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