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Archive for Tuesday, December 1, 2009

Privatization caution

December 1, 2009

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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.

Comments

Richard Heckler 4 years, 12 months ago

Politicians are also influenced by special interest campaign money,shareholdings and conflicts of interests = no way.

All this privatization does is provide another way to grease the palms of their friends and political campaign donators.

Privatization DOES NOT mean no more tax dollars spent on a service. Quite the contrary. Tax dollars will still be spent and more of them.

Do NOT put more people out of work. That is fiscally irresponsible economics.

Richard Heckler 4 years, 12 months ago

Instead of using the word "privatize" to deceive voters/taxpayers into thinking that private buisness would be taking over thus NOT SPENDING our tax dollars is nothing but BS.

Call it what it really is. It is SPENDING OUR TAX DOLLARS on a private profit making business that is being contracted out to perform a service. There is no guaranteed quality of service.

Contracts too too often come with golden parachutes if a contractor needs to be replaced..... not on my tax dollars!

Like it or not most government performed services come with a high standard of quality control which ultimately provides the better bang for the tax buck.

It is the world of private contractors that take taxpayers for a ride aka not performing under a high standard of quality control. Profit gets in the way.

Again like it or not most government performed services come with a high standard of quality control which ultimately provides the better bang for the tax buck.

canyon_wren 4 years, 12 months ago

I usually don't bother to read Merrill's overloads, but he is right in this instance (and may be right, in others; I wouldn't know!). I know from experience that the Federal government is spending a lot more and getting lot less since they have "outsourced" a lot of their jobs.

KS 4 years, 12 months ago

Get the governemnt out of it. Private concerns can ALWAYS do a better job that the government. Private concerns have a motive to do a better job. The government will just gig the taxpayer when they need more money. The government can not be all things to all people.

Orwell 4 years, 12 months ago

KS:

And the private concerns will still respect you in the morning. Right.

When I think back to Lincon's famous statement, I think I see who he meant when he said you can fool some of the people all of the time.

Richard Heckler 4 years, 12 months ago

Damn few private corporations have higher quality standards than government.

Private business has but one motive = profit

More people will lose decent paying jobs to lower wage people which harms the economy across the board. The less people make = the less they spend = the less they spend the less new new jobs created = the less tax revenue is generated = the more taxes of all kinds will increase.

The more money people are paid the stronger the economy = simple economics.

Kirk Larson 4 years, 12 months ago

Would you want some private, for profit company treating your drinking water? Cutting corners to maximize profit? Or treating your sewage? Running your police or fire department? Look what they've done to health care!

trinity 4 years, 12 months ago

and look at what they've done to children's services...foster care, adoption, etc. that all started going to H in that proverbial handbasket way back around '97 when privatization set in. state is spending obscene amounts of money on this.

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