Proposals for cheaper and better services are fairy dust.
Gov. Jeb Bush, legislative leaders and the Florida Council of 100 are pushing for privatizing public services. Privatization is headed for a train wreck.
Proposals for cheaper and better private-sector delivery of services are fairy dust. What drives privatization is not sound economic management but rather simplistic economic models, blind faith, greed and attempts to destroy employee protections and unions. ``Too good to believe proposals'' are funded and later fall short .
Despite talk about savings, private vendors are reluctant to sign contracts that guarantee savings of 7 percent to 10 percent. Poor-quality privatized services have caused children to be stranded when school buses didn't run, disabled people to be stuck with no transportation, sick people to face nightmarish insurance service, and minor offenders to die in jail because of inadequate medical services.
Privatization has cost Florida taxpayers hundreds of millions of dollars:
Unisys won an $86 million state contract to administer health-insurance plans for more than 100,000 state employees, retirees and their dependents. For two years, state employees and retirees put up with a health-care insurance system that didn't work. Taxpayers covered a $200 million deficit created by the fiasco.
The state hired Lockheed Martin and Maximus to streamline records and collect child support from ``deadbeat'' parents. The contractors received a $4.5 million contract to collect $104 million in child support. Only $207,000 was collected.
In 1993 the Legislature, mistrusting the Department of Corrections, established the Correctional Privatization Commission to send convicts to private prisons. The commission has been wracked with scandals, and the private corporations (Wackenhut and the Corrections Corp. of America), which contributed heavily to political campaigns, haven't provided the cheaper, higher-quality services they promised.
The Office of Program Policy Analysis and Government Accountability found that start-up costs at the privately run prison in Lake City were excessive. Counselors came and went. The substance-abuse program was un- licensed, and instructor jobs stayed vacant for months. The Legislature required that private prisons produce a 7 percent savings compared with public prisons. Private prisons aren't providing the projected savings.
Taxpayers lost $96 million in lottery dollars that could have gone to education coffers because the state failed to fine a private vendor, Automated Wagering International, for failing to meet terms of its contract.
National polls show that most voters oppose privatization, particularly when privatization results in gross profiteering, reduced services and harmful consequences.
While voters see less harm in the privatization of services such as garbage collection and road repair, they strongly oppose privatizing more-complex services such as law enforcement, health inspections, fire protection, child support, nursing-home care, environmental protection and unemployment benefits.
Privatization proponents claim that workers won't be harmed. Tell that to Martin County School District drivers and mechanics who lost pensions and health benefits when their jobs were privatized. State employees familiar with Bush's Service First proposals know that there will be fewer jobs and less job protection. Mark Sherman, a program referee, called it the ``Service Worst.'' The plan gives managers greater authority to fire, promote, reassign and discipline workers. It puts the burden of proof on employees in appealing adverse job actions.
One alternative is innovative labor/management strategies that have provided cost savings and better quality services in Ohio, California, Maryland, Illinois, Maine, Pennsylvania and Oregon. For instance, Fort Lauderdale saved $400,000 one year by promoting equipment sharing and by eliminating unnecessary purchases and rentals. A committee changed work practices for laying water pipes, saving up to $4 million.
Another alternative is to take back privatized services. The business community should be proud that citizens want public institutions run in a more-business-like manner. However, they shouldn't ignore that citizens don't want public institutions privatized.
James Fendrich is professor of sociology at Florida State University and a member of the Board of Trustees of the Florida Institute for Economic Justice.
Copyright 2001 Miami Herald
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