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New Jersey Voters Reject Privatization

On June 15, voters in Trenton, New Jersey, soundly rejected a proposal to sell a majority of Trenton Water Works' infrastructure, including pipes, water towers, and tanks, to a private company.  For several years, Trenton Mayor Douglas Palmer argued that water privatization would generate immediate revenue for the cash-strapped city and end its obligation to maintain aging infrastructure in surrounding townships.  Community activists, unions, and the Stop the Sale campaign, successfully challenged the Mayor's plan.  In the weeks leading up to the vote, polling indicated that 95 percent of city residents disapproved of the initiative.

Opponents of the sale found that selling the city's "most valuable asset" to a private corporation would have resulted in an approximate loss of $25 million annually, a cumulative decline of $400 million in revenue over the next 20 years, an inevitable increase in local taxes, and higher water rates.  

History of Consumer Losses in Other Cities: Though water privatization is not as common as other contracted services, there are several problems associated with the effort.  For example, following a $38 million fine for pollution resulting from inadequate maintenance of the city's sewer and water systems, the Atlanta City Council signed a 20-year, $428 million contract with the private firm, United Water. The deal led to massive layoffs, a 12 percent rise in sewer bill rates, incidence of slow repairs, and substantial revenue loss due to poor water metering.  The City Council voted to rescind the contract in 2002, a move that saved Atlanta millions of dollars per year.

NJ Gov. Christie Pushing Privatization: Even in light of overwhelming public opposition to privatization and the significant pitfalls of these actions, New Jersey Gov. Chris Christie established a privatization panel by executive order in early April, seeking to identify $50 million in savings.  As part of this initiative, the Governor has proposed privatizing functions of the New Jersey Network (NJN), the only non-partisan public television and radio news source that exclusively covers the state.  Not only would privatization threaten news coverage in the state, but it would also risk the loss of state assets, such as broadcast licenses, towers, studios, and media equipment.

Several organizations are working diligently to protect the state's assets and resist privatization, including the Communication Workers of America (CWA), AFL-CIO, and Free Press.  Progressive lawmakers are intent on restoring funding to the network and pushing back against the effort to privatize. Asm. John Wisniewskihas introduced A 2949, which establishes the New Jersey Public Media Corporation, allowing NJN to operate as a state agency with more autonomy in the areas of hiring, procurement of equipment, leasing of assets, and labor relations.  As Progressive States Network has previously detailed, legislative action to limit privatization is necessary to safeguard against the loss of accountability and public revenue that these misguided schemes often produce.

Resources:
AFL-CIO - Trenton Voters Say 'No' To Private to Water
Blue Jersey - Can NJN and NJ News Survive Twin Threats?
Communication Workers of America - NJN Budget,Privatization, Assets, News, and Alternative Structure
Progressive States Network - Critics Resisting New Jersey Governor's Push for Further Privatization
Progressive States Network - State House Reporting and Public Broadcasting on the Chopping Block
The Star Ledger - Trenton Water Works to Settle Divisive Issue
Stop the Sale - The Facts about the Water Deal