Selling Off Our States: The Pitfalls of Privatization

When it comes to the problem of privatization, we don't even know the half of it.

With all the attention currently focused on the perils of privatization at the federal level in the wake of the Blackwater debacle and the war profiteering sprees by Halliburton, Bechtel, and the like, scant if any attention has been paid to the very real problem of privatization of government services at the state level. A report released today by the Progressive States Network attempts to shine some light on the subject.

The report, entitled "Privatizing in the Dark: The Pitfalls of Privatization & Why Budget Disclosure is Needed," makes the case for a broad reevaluation of the practice of outsourcing public services such as education, transit, prisons, and health care, which are traditionally administered by state governments, to private corporations. Citing conservative claims that privatization saves money and optimizes service, the report argues that there is insufficient evidence to support such claims and that what evidence does exist actually suggests that privatization wastes tax dollars by fostering corruption, inefficient management, increased costs, and a disincentive to quality service.

What the report documents is what we all should have already known: there's no such thing as a free lunch. Despite all the talk of "public-private partnerships" as the magic bullet to save us all from the woes of bureaucratic inefficiency, the PSN report paints a broad picture of failed privatization schemes, including:

- Texas's outsourcing of social services to the Bermuda-based consulting firm Accenture, which resulted in massive infrastructure failures and 30,000 children being dropped from the state's Children's Health Insurance Program
- Massachusetts's outsourcing of the infamous "Big Dig" highway construction project to the firm Bechtel, resulting in the winnowing away of safety oversight procedures and leading to the wrongful death of motorist Milena Del Valle
- Indiana's lease of its toll highway to an Australian-Spanish consortium, resulting in the projected loss of nearly $25 billion in toll revenues over the next 75 years in exchange for a $3.8 billion up-front payment
- Ohio's outsourcing of state investment portfolios to private firms with links to Republican party fundraisers, resulting in massive corruption scandals and the theft of nearly $13 million from worker's compensation funds

There will be a conference call today open to the public to learn more about what's happening at the state level on privatization:

What: Conference Call on State Privatization
Who: State Legislators, Progressive States Network, AFSCME, Good Jobs First
When: Thursday, 1pm EST
Number: 1.800.391.1709 and enter extension code 70 94 24.

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