The purveyors of privatization are knocking on the Legislature’s door with promises of cheaper and more efficient operations.
A bill by state Rep. Marvin Kleeb, R-Overland Park, is before the Legislature that would set up a special committee to investigate opportunities to outsource or privatize government services.
Kleeb enlisted the help of Adrian Moore, vice president of research at the Reason Foundation, who recently told the House Appropriations Committee that privatization should be considered in nearly all areas of government.
“Privatization is a policy tool that should at least be considered in most instances,” Moore said.
The Reason Foundation is based in Los Angeles and describes itself as a nonprofit think tank with a mission “to advance a free society by developing, applying and promoting libertarian principles, including individual liberty, free markets and the rule of law.” It is not affiliated with any political party.
Moore points to Florida as a state that has succeeded in privatization efforts, with some 550 contracts worth $8 billion.
But Jane Carter, executive director of the Kansas Organization of State Employees, says there are numerous examples of states that have regretted privatizing state jobs.
“Privatization is not the answer; again and again it has been proven to be disastrous to taxpayers and critical government services,” she said.
Moore said there certainly are instances where privatization hasn’t worked, but those shouldn’t overshadow other successes.
Some committee members, such as state Rep. Kasha Kelley, R-Arkansas City, embraced Moore’s testimony.
“You had me at hello,” she told him.
But others were skeptical.
State Rep. Doug Gatewood, D-Columbus, said many of the examples of possible privatization that Moore cited were already privatized in Kansas.
Comments
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getreal (anonymous) says…
“You had me at hello,” Rep. Kasha Kelly. This is a prime example of pure politics. She didn't need to hear testimony for and certainly not against privatization to make up her mind. Kansas has already privatized those areas of government that make sense to privatize.
Perhaps they will suggest we privatize the legislature and simply let Koch Industries run the state.
Boston_Corbett (anonymous) says…
After all, privatization worked so well for the Kansas foster child care system.
Not.
Did_I_say_that (DIST) says…
Privatization makes sense; at least until government does it. Take, for example, the privatization of the State's children's services. Privatization of that system, won in a lawsuit, may better protect out-of-home youth; however, it has resulted in drastically increased costs. Why? There are two reasons. First, the state did not eliminate any of its bureaucracy. In fact, it may have increased in some areas for the purpose of oversight. Second, the privatized system was legislated and regulated into having a system that was just as bloated as the government's. Hence, there is now multiple layers of wasted funding in both the state and private sectors of children's services.
There is no reason to believe that the state would eliminate any fat, bureaucracy, or costs by privatization. Government must eliminate, by mandate, state bureaucrats if privatization is expected to improve the end result.
BigDog (anonymous) says…
There are areas of state government that have been shown several times were cheaper in the private sector which the state employees union has fought against. One area is the state priniting plant in Topeka. When I worked for the state we had to use the state printing plant for brochures and other printing projects even though we checked on bids several times in the private sector. The private sector printer could often do the same job for 15-25% cheaper and have it completed in a couple of days versus 7-10 days.
Tongie_soccer (anonymous) says…
wow - have to wonder if certain people who have posted have even had any sort of contact w/ the privatized child welfare system in Kansas. Seems like folks talking out of their rear to me, or possibly a parent whose had their kiddo removed - those folks are never happy with the system no matter how hard you try to help them...
SettingTheRecordStraight (anonymous) says…
"...the Kansas Organization of State Employees..."
aka Big Labor, which is trying to hold onto as much power as possible by protecting government jobs from the free market.
just_another_bozo_on_this_bus (anonymous) says…
STRS-- This is not an initiative to open up jobs to the "free market." This purpose is to divert tax dollars to well-connected private interests. Any efficiencies gained will be an accident.
markoo (anonymous) says…
getreal says:
"Perhaps they will suggest we privatize the legislature and simply let Koch Industries run the state. "
You're not too far off the mark, considering David Koch is on the Board of Trustees.
Then again, so is Drew Carey, so that's quite an interesting mix.
Livnlife (anonymous) says…
As a State employee, I have overseen contracts with both the State Printer and 3rd Party vendors. I would much rather work with the State Printer as they are very helpful and the cost of the jobs were comparable to what the 3rd Party Vendors were going to charge. It is a pain to work with a vendor that is hundreds, and sometimes thousands of miles away for print jobs. We spent more staff time and money with them then at the State Printer obtaining a good quality product. We need to keep the jobs here in Kansas.
imastinker (anonymous) says…
The only case where privatazing work would be jobs that requires special skill or equipment. How many backhoes and road graders get bought by counties new and get sold ten years later with a thousand hours on them. Any private firm is going to have to be able to actually do the work for half the price of what it costs the government so that they can make a profit and save the organization money too.
Some of you complaining ought to think about it though. Does the state have HVAC installers or electricians or auto mechanics on their payroll? No, they use a private organization because they don't have enough work to keep these people busy. Is it such a stretch to think that other positions might be the same way?
Liberty_One (anonymous) says…
Privatization is not the Libertarian approach and this group does not represent Libertarian ideals. Our approach is to eliminate government spending, not to change how the money is spent. Perhaps private entities could provide government services more efficiently but that doesn't change the fact that capital is being diverted from more productive to less productive uses.
gccs14r (anonymous) says…
Right, because society gets along just fine without the rule of law and a functioning infrastructure.
gccs14r (anonymous) says…
"You're not too far off the mark, considering David Koch is on the Board of Trustees.
Then again, so is Drew Carey, so that's quite an interesting mix."
Not so strange, considering that Drew Carey is a conservative.
Phillbert (anonymous) says…
I once worked for a government contractor. The first thing we'd do on every order was add "markup." Ordering brochures? 15 percent markup. Ordering pencils? Markup. Ordering...? Markup. This was before we did a minute of work...which was all billed by the 1/4 hour.
Contracting out works great -- for the contractors.
imastinker (anonymous) says…
You were ordering stuff and that wasn't work? How did you know what you were ordering without doing some research? Were there special requirements or technical information required to order the product? Who paid the bill if what you ordered was wrong?
I order stuff all the time - and I sure make my markup on it too! Sometimes it can take me all day to approve a purchase by the time I review the specs, the dimensions, get engineering approval, get three bids, discuss specs with vendors, compare bids with each other and my requirement, discuss terms and haggle a bit, then get credit and terms. Seriously - that's worth a lot of money for me to do all that - and use my product knowledge of my equipment for all of it.
Plus, if I screw up I eat it. It's a custom order and non returnable. One mistake is half my yearly salary or more.
merrill (anonymous) says…
USA industry never wants to pay taxes butttttt loves those tax dollars in their bank accounts.
These could be people with CEO's and shareholders. Doing soemthing for less = getting less for the tax buck.
The answer should be no way jose'!
The tax dollar vultures are out and hovering with sharpened claws.
Just take a look at the privatized medical insurance industry. The military industrial complex, Blackwater (Z) and other war profiteers are taking taxpayers to the cleaners. Politicians are the wrong people to making these decisions..... ever heard of special interest money? conflicts of interest?
Politicians prove themselves over over as easy to buy.
No tax dollars will be saved no way jose'! And it will put more people out fo work.
yourworstnightmare (anonymous) says…
Privatizing simply shifts where the government money is spent. It does not eliminate spending.
Private contracts are notorious for their overbilling.
The $1000 dollar toilets seats and $500 hammers of fame were all through private military/government contracts.
As was all of the billions of dollars that disapperared in Iraq in when functions of the military were privatized.
Privatizing is not the answer and in fact will increase spending on the same services.
Liberty_One (anonymous) says…
gccs14r (Anonymous) says…
"Right, because society gets along just fine without the rule of law and a functioning infrastructure."
What on earth are you talking about?
puddleglum (anonymous) says…
liberty one...
gccs14r is right on...
privatization is not the answer to saving money.
it just puts money in good ol' boys' pockets.
werekoala (anonymous) says…
Privatization is a red herring, pure and simple.
Say you have a job to do. It takes X dollars to do that job.
Now the government employees come along and do that job for Y dollars. (Y = X + overhead/inefficiencies)
Alternatively, a private contractor can do the job for Z dollars (Z= X + overhead/inefficiencies + profit)
So anyone who has passed algebra (ie, no Real Americans(TM)) can see that the private contractor has one more term in his/her equation: the profit motive.
So if Z is less than Y, then either the contractor is doing a shoddy job, or they are much more efficient than the government workers. And while the old canard of the lazy government employee is firmly entrenched in our memestructure; I'll bet you I can match every narrowminded pinheaded petty bureaucrat in government with a pointy-haired boss from private industry.
Government isn't a bogeyman, and it isn't necessarily inefficient. organizations in general are bloated and inefficient, be they public or private. The best that you can say for privatization is that they have a motive to work cheaper than they bid, but this in no way ensures the quality of their work.
A better message would be strong enforcement of provisions that require efficient spending of tax dollars to both public and private contractors.
But then that would defeat the real point of the people promoting this message, which is that the peepul should relax and let the invisible hand of John Galt shaft them...
gccs14r (anonymous) says…
L_O,
This is what I'm talking about:
"Our approach is to eliminate government spending,..."
Tell me how you propose to have a functioning society without a government in place.
Did_I_say_that (DIST) says…
Tongie_soccer (Anonymous) says…
"wow - have to wonder if certain people who have posted have even had any sort of contact w/ the privatized child welfare system in Kansas. Seems like folks talking out of their rear to me, or possibly a parent whose had their kiddo removed - those folks are never happy with the system no matter how hard you try to help them…"
"Certain people" would be me since I am the only one who made the observation. Yes, I have had extensive contact with the privatized system and worked for over ten years as a direct care provider for 24/7. The fact is that the system has a bloated budget. Rather than make an ad hominem attack on a commenter, Tongie_soccer, try looking into the facts.
Privatization did not decrease the cost of services provided to CINC or JD children; costs increased. This is due to the increased layers of indirect support personnel. For example, by the time an out-of-home youth is enrolled in school she may have up to 5 social or case workers that are looking out for the child's best interest. This includes mandated workers for the State (SRS), the contractor, the direct care provider, possibly JDC, and last (but not a direct cost) the school's social worker.
srs, kdhe, the contractor or JDC, and the direct care provider are all responsible to create and maintain paperwork for each youth in state custody. Yes, Tongie, there is increase costs due to privatization. Now, that may be talking out of my rear, but it is a rear that has been around the system.
SolutionsFocused (anonymous) says…
Rep. Kelly was very even handed asking about failures of privitzation also. I didn't get teh impression she thought is would be good for all of government at all. She asked a lot of solution seeking questions which seems to be a right approach for all of government though. What can we do different that might work where things dont right now? I agree privitzation is a good thing so why not investigate where it has or hasnt worked like was said?
Phillbert (anonymous) says…
imastinker - The markup was on top of the hours billed. So if we had a box of brochures that would cost the government $100 if it bought directly, we charged $115 plus the cost of however many hours we spent.
yourworstnightmare (anonymous) says…
Privatization in the military led to $1000 toilet seats and $500 hammers. It does not save money, as the contractors inflate prices.
KawHawk (anonymous) says…
One of the best things KU ever did was close Printing Services on West campus and outsource that work. PS, in my experiences (more than once) screwed up the job, tried to stick us with the bill for their screwups, promised the thing far later than the private sector, and were a lot more expensive than going private. Breath of fresh air when that operation was closed down.
Liberty_One (anonymous) says…
gccs14r (Anonymous) says…
"Tell me how you propose to have a functioning society without a government in place."
I didn't say we should have no government at all. I was talking about what is in the article, which is privatizing government programs. I would rather eliminate those programs than to privatize them. How you got from eliminating spending programs to eliminating the government is beyond me.
clip1954 (anonymous) says…
When you lose control of the programs you lose control of the costs. Privatization advocates need to come up with detailed budgets for the last 12 years accounting for where the Money has gone . When asked about escalating costs after privatizing foster care and adoption services a Former State Senator and Privatization advocate responded to inquiries with " I never said it would save money". I suggest a detailed post legilative audit that provided facts on the reality of the cost and services of privatization since 1997.
SolutionsFocused (anonymous) says…
Since the guy speaking talked about all the successes, Rep Kelly asked what didn't work as privitized and the guy said some srs functions and something else I don't remember, but that it was different from state to state. In other words, you only initiate something like that where it could help save and increase service standards. Obviously no one wants to harm the system. Why so many cynics? We need to work together to help Kansas out of this mess and no one on the committee seemed to think this was the be all end all but just a solution to consider.
mr_right_wing (anonymous) says…
Why should Kansas try and do the exact opposite of what the Obama clan is trying to do? So we're going to privatize everything while Obama nationalizes everything? I don't think this will be something our President will be in favor of, and if it comes to Kansas v. Barry....we'll be on the losing side. I am actually in favor of privatizing; but what good is it going to do if the federal government steps in and puts an end to it? Socialism is here, like it or not. Kansas will not get away with this, so why waste our time?
Agnostick (anonymous) says…
werekoala, I took the liberty of tinkering with your formula a bit. Here's what I came up with:
Z = (X2 – a) + O2 + P3
This reply program won't allow subscripting of numbers, so you'll have to imagine that the 2s are "squared," and the 3 is "cubed."
Z is the corporate price
X is the inflated cost of the product/service
a represents the quality decrease that naturally comes when start cubing those profits (P). Materials and craftsmanship become cheaper, shoddier, etc.
And of course, overhead/inefficiencies (O) tend to go up, as well.
But hey, let's turn this thing around a bit, here.
When you look at that formula... I mean *really* look at it... it's not that different from a Gaussian copula formula of some sort. And we all know what *that* means: money!
If enough states dump enough services into private contracts, we can bundle those contracts into private contract-backed securities, and trade them on the open market. Since we know that private contracts ***ALWAYS*** make money, rather than lose it, there's no possible way this can backfire! Anyone who invests in this stuff is guaranteed millions!
Hey... it's worked before!
Agnostick
agnostick@excite.com
just_another_bozo_on_this_bus (anonymous) says…
"Anyone who invests in this stuff is guaranteed millions!
Hey… it's worked before!"
Yep-- after the government bailouts.
merrill (anonymous) says…
Instead of using the word "privatize" to deceive voters 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.
Did_I_say_that (DIST) says…
merrill (Anonymous) says…
"...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."
r.o.f.l
r.o.f.l
r.o.f.l
Merrill - Other than protective services (Military, Police, Fire, etc.) name one service or product where the government provides the better bang for the tax buck.
R.O.F.L
mtoumi (anonymous) says…
Yeah, since privatization of the federal government worked so well and saved so much money, look at Halliburton and much they helped us... forget that soldiers occasionally went hungry. Look at BlackWater, ignore the fact that Iraqi civilians were murdered by their employees... great.
kansasfaithful (anonymous) says…
Privatize and quickly. And then begin dismantling KRERS. Taxpayers shouldn't be funding state employee retirement. Kansas is a right to work state. Union labor should be avoided at all cost. Just look at the capital renovation. Dunn construction has made a fortune on the taxpayer and endlessly behind schedule.
Echoes (anonymous) says…
To privatize would be pumping tax dollars into private companies’ bottom line. All privatized activity still has to be managed by the state adding yet another layer of administration costing money, not saving money.
Private business does what it does very well, but must run their operations to make a profit. State government does what it does as a service to the public. Government does for the individual what the individual cannot do for themselves.
The State is broke, private business has enjoyed tax deferrals now for some time. Remove those exemptions until revenues are back in line and the State can provide those services that the public expects. When the economy recovers, maybe we could re-institute some corporate tax relief.
As things stand now, the budget is being balanced on the backs of school districts, the disabled and poor, and state employees. Big business in Kansas should pull their weight and not shirk their responsibilities as they enjoy the benefits of well educated workers and the public infrastructure that supports commerce.
I suspect that many of the legislators that would push for privatization also hold stock in the businesses lined up to take tax dollars for their own profit. Conflict of interest is easy to spot, but very difficult to prosecute at this level.
Did_I_say_that (DIST) says…
beobachter (Anonymous) says…
"Can't help but notice how many posters here have absolutely no clue as to what state employees do..."
Maybe if they actually did something...???