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Senate Co-Sponsorship Memoranda
Senate of Pennsylvania
Session of 2015 - 2016
Regular Session
MEMORANDUM
| Posted: | June 29, 2016 09:53 AM |
|---|---|
| From: | Senator Anthony H. Williams |
| To: | All Senate members |
| Subject: | Pay-for-Success Programs |
| In the near future, I will be introducing legislation that would amend the act of April 9, 1929 (P.L. 343, No.176) to provide for Pay-for-Success Contracts. The legislation would permit partnerships between the Commonwealth, philanthropists, and private investors to facilitate the use of private financing to pay for certain commonwealth funded programs and services. This financing model, commonly known as Pay-for-Success (PFS), would allow the Commonwealth to work with private investors and service providers to provide evidence-based services and programs to targeted populations. The pay for success model will effectively spur innovation, identify programs that work, and optimize the delivery of those programs and services, all while reducing the cost to the taxpayers of the Commonwealth. In 2013, the state of Utah partnered with Goldman Sachs and the J.B. Pritzker Family Foundation to provide upfront funding for a Pre-K program aimed at reducing the amount of disadvantaged students who would require special education services in kindergarten. Of the 595 low-income children who attended the PFS-financed preschool programs in the 2013-14 school year, 110 were identified as likely to require special education in grade school. Of those 110 students, only one went on to use special education services in kindergarten. Based on the early intervention, the school district saved $281,550 in a single year because of this partnership and gained a proof of concept to support additional public spending on pre-kindergarten education. Under my proposed legislation, the Office of the Budget and other agencies would be authorized to enter into pay-for success contracts with philanthropic and private sector investors. The intermediaries would be required to document their investment capital at the commencement and throughout the performance of the contract. This PFS contract would specify the program or service to be provided, target population, methodology to be used to measure performance, outcomes to be achieved, and the payment schedule. Following a program's conclusion, investors’ return would only be reimbursed after a rigorous evaluation process by a third party demonstrating that the program or services provided have met or exceeded predefined performance targets and outcomes. Please join me in co-sponsoring this important legislation. |
Memo Updated: June 29, 2016 09:54 AM