New York was one of US cities that first realized the benefits of sourcing out private providers to perform jobs that were once exclusive to the state government. The 1995 Governor Geroge E. Pataki remarked that "competitive bidding between the public and the private sector can lower costs and provide more efficient deliver of services."
Indeed, New York experienced efficiency gains since marketizing some of its public services. For example, it spends about 3 million dollars annually on highway maintenance, bus transit subsidies, mental health facilities, motor vehicles record keeping, human resource management, prisons, and welfare and Medicaid administration. In just these areas, about 5 to 50 percent efficiency is estimated to be achieved. Such gains can be translated into hundreds of millions of dollars every year and it can be larger when other areas are considered for outsourcing.
Since 1995, the state has contracted out services in areas including janitorial and custodial work, facility design, warehousing, courier and package delivery, sate bakeries and warehouses, and management of park concession stands at state parks. One of the felt benefits that the state government had from marketization is that it is now operating with 20,000 less payroll employees than a decade ago.
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