There’s nothing wrong with looking at a variety of ways to trim the state budget, but a move toward outsourcing government services to private companies is something that should be approached with caution.
The Kansas Legislature is being asked to consider a bill that would set up a special committee to investigate opportunities to outsource certain government services to private companies. Members of the Kansas House Appropriations Committee recently were told that privatizing government services can reduce costs and increase efficiency for the state.
In some cases, that may be true, but, again, the state should be cautious in outsourcing certain government responsibilities. Kansas already has privatized certain services, but before taking any additional steps in that direction, officials must make sure that a private company not only can provide the needed service to the state’s satisfaction but also that turning that service over to a private contractor actually will save the state money.
Many of the services that might be considered for privatizing are services the state is legally required to provide. They involve substantial taxpayer money and have a profound impact on Kansas lives. That means that, whether services are delivered by state employees or by employees of a private contractor, the state still is responsible for those services.
If the state turns over operation of its prisons, for instance, it still is responsible for what goes on at those prisons. That means that when considering potential cost savings from privatization, state officials also must consider how much it will cost the state to provide the necessary oversight to make sure private contractors are fulfilling their responsibility to the state.
State government isn’t out to make a profit, but no private contractor will take on a state service unless it believes it can make a profit by doing so. Perhaps the contractors can make a profit by being more efficient than the state, but there always is the question of whether they would cut corners on the services in order to lower their costs. That brings us back to the oversight issue and how much time and effort the state would have to expend to make sure its requirements for service are being met.
Under the current economic pressures the state is facing, the idea of privatizing services may be a tempting prospect for state lawmakers. They are certain to hear, as the House Appropriations Committee did last week, many glowing claims of how much money private contractors could save the state. Before going too far in that direction, Kansas certainly should take a careful look at the experiences other states have had with privatization efforts — and carefully examine how those lessons might apply to Kansas.
Perhaps there are some savings to be realized here, but the costs from any missteps could be great. Legislators should approach any privatization effort with extreme caution.