Sunday, June 26, 2011

Look Before You Privatize

Hearing a lot of chatter in this state lately about how we need to privatize government services under the guise of "best practices", the argument being put forth from the Republicans is that it will create competition and save taxpayer money.

Unfortunately, as with all things Republican, the theory tends to produce just the opposite when it is put into practice in reality. The real world of privatization is happening right now down in Indiana, and it looks a little something like this:

Cohoon's mother, now suffering from Alzheimer's disease, was one of thousands of Indiana residents who abruptly and erroneously lost their welfare, Medicaid or food stamp benefits after Republican Gov. Mitch Daniels privatized the state's public assistance program — the result of an efficiency plan that went awry from the very beginning, the state now admits.

Though the $1.37-billion project proved disastrous for many of the state's poor, elderly and disabled, it was a financial bonanza for a handful of firms with ties to Daniels and his political allies, which landed state contracts worth millions.

The disparate effects underscore the risks of handing control over public services to the private sector. Whether the approach will ultimately improve services and save money remains a matter of fierce debate in Indiana. But the state's experience shows that without adequate safeguards, privatization can compound the very problems it is designed to correct: bureaucratic burdens, perceptions of influence-peddling and a lack of competition.

Need more? How about the privatization of the Indiana Toll Road...

In two weeks, the cost of traveling the 157-mile length of the Indiana Toll Road will rise more than 2 percent, from $8.80 to an even $9, for those who pay the toll in cash. The fare will jump a full buck for truckers hauling semi-trailers, from $35.20 to $36.20.

The July 1 toll hike may not seem so painful, until you consider that those tolls were about half of their soon-to-be rates only five years ago -- and that they hadn’t risen for two decades prior to that. Even harder to swallow for some drivers, truckers in particular, is the fact that their growing contributions go not to the State of Indiana but to overseas investors who've leased the toll road from the state.

Prison services? Take a gander at Arizona:

“There’s a perception that the private sector is always going to do it more efficiently and less costly,” said Russ Van Vleet, a former co-director of the University of Utah Criminal Justice Center. “But there really isn’t much out there that says that’s correct.”

Such has been the case lately in Arizona. Despite a state law stipulating that private prisons must create “cost savings,” the state’s own data indicate that inmates in private prisons can cost as much as $1,600 more per year, while many cost about the same as they do in state-run prisons.

These are just a few of the stories from the past six weeks or so. If you dig deeper, you can find many, many more. Privatization is simply the Republicans selling state services to their friends, who promptly turn around and either provide poor service, which ultimately increases taxpayer costs in other ways, or they simply just raise prices to consumers outright. It's a back-door tax increase to you either way.

Just something to keep in mind if your Republican legislator comes home this summer and starts to tout the benefits of privatization. Then again, they probably won't be talking much with constituents - they will be too busy lining up those contracts. It's the "best practice" for Republicans who are looking to reward wealthy campaign donors and find yet another way to screw the little guy - and make us think we are getting a good deal at the same time.

Update: Digby weighs in on this as well. Good. This needs to get into the national conversation. It's like robbery in perpetuity.