If the government was really contracting something out, then there's an argument to be made that it's on behalf of the government therefore it's government action and therefore it may be prohibited.
If nothing else, I'm pretty confident that my 3rd-amendment rights to not have soldiers crashing on my couch is safe from whatever my neighbor does with their dashcam.
Well, we saw this play out in the last couple years in Texas—they set up their laws so that abortion enforcement was performed by civilians (i.e. not cops, not the government), specifically to throw sand in the gears of any countervailing judicial efforts (i.e. making it impossible to sue anyone to force them to stop it, because it's just a game of whack-a-mole at that point).
A law [0] which, IMO, is a flat-out travesty of justice, kind of like if Texas Republicans had passed a law saying: "No private citizen shall be guilty of assault or liable in a civil trial for striking someone who spoke on the Ministry of Truth's totally voluntary prohibited ideas list."
I'm more afraid of the slippery slope. I'm less confident courts find state action if a government is merely encouraging private citizens to supply evidence via a bounty system. Even if it's plain that this citizen-provided evidence is horribly biased, a court might say that the prosecuting entity has the responsibility to sift through the bias, and this responsibility is the difference between the state (the government) and non-state (the citizen who happens to submit only footage of people of a certain race).
But eventually the flow of money effectively deputizes the citizen, replacing beat-cop budgets with crowd-source bounties, and years of abuse pass before the courts acknowledge that it's actually been state action for quite a while.
(Interesting reading: Yick Wo v. Hopkins, which established that a fairly written law can still violate constitutional rights if the administration of that law is unjust. The City of San Francisco required permits for laundries, which is fine, but in actuality they never granted permits for people of Chinese descent. The US Supreme Court said nope. I could see similar reasoning applying here.)