Sweeney’s RICH Act is a Sneaky Privatization Scheme

Bill purports to help public pensions, but it is an invitation to corporate water takeovers

This afternoon, the Senate Committee on Budget and Appropriations is scheduled to vote on S. 3637, the Retirement Infrastructure Collateralized Holdings Act (RICH Act). While RICH Act supporters like Senate President Steve Sweeney portray this measure as a move that will benefit public worker pensions, the RICH Act is a sneaky privatization scheme aimed at wresting control of public water and wastewater systems.

Proponents of the legislation point to the creation of a fund managed by the state’s infrastructure bank to claim this makes any transfers of water systems ‘public to public.’ But this is extremely misleading; the bank can hire an investment fund to carry out the work, and the legislation is crafted to encourage privatization by allowing the bank to sell or lease the assets transferred to the fund with the “duty to maximize the long-term value of assets in the fund.” It can also force privatization and valuation studies of water and wastewater systems, even in communities that are not looking to sell their systems.

Food & Water Watch New Jersey State Director Matt Smith released the following statement:

“Steve Sweeney’s new pro-privatization push is being cloaked in misleading rhetoric about protecting workers’ pensions. Don’t be fooled: This is just a crafty scheme to encourage corporate takeovers of our state’s public water and wastewater systems. The RICH Act would push privatization and valuation studies on community systems, forcing them to either come up with the funds to make capital improvements themselves or lose control of their systems, either directly through a sale or by handing them over to a state fund that will be geared towards promoting privatization.

“What’s worse, this bill actually reduces the public’s ability to reject a sale of their publicly-owned assets. The end result of all of this will be a tax at the tap; communities will pay more for their water, enriching the private corporations that have carried out hostile takeovers of assets that should rightly belong to the public. New Jersey lawmakers must say no to this privatization scheme; and if they do not, Governor Murphy should veto this measure.”