California is the perfect picture of neoliberalism. They've privatized as many government functions as possible and, shocker, the public-private partnership has ended up with a LOT of waste and fraud.

Without very strong oversight, you cannot trust these private companies to not simply suck down every single dollar the government is willing to offer. A private business whose only client is governments will never ever be cost effective. They'll always charge as much as possible while offering the most minimal quality possible. That's how they increase their profit margins.