Written by Scott Davis sedavis@lsj.com
Once a buzzword in Michigan state government in the 1990s, privatization now is coming back in a big way.
Touting his goal of reinventing government, Republican Gov. Rick Snyder has proposed privatizing prison food and store services, dairy farm and plant nursery inspections and resident care in two veterans homes to bring state costs under control.
A far more sweeping measure would privatize the processing of Medicaid and day care aid applications in the state Department of Human Services, which union officials say would lead to layoffs of several hundred state workers. That measure, proposed by Republicans, has been passed by the Senate and now must be reconciled with the House budget.
Such proposals have revived a debate as to whether privatization is an effective strategy to deliver services traditionally provided by state government. Proponents argue the state should privatize functions that can be done more cheaply and efficiently in the private sector, while critics say savings often are overestimated and service quality diminishes as it shifts toward private-sector employees with less experience.
“You get what you pay for,” said Roland Zullo, a privatization expert and a research scientist with the Institute for Research on Labor, Employment and the Economy at the University of Michigan. “When you slash employee costs, especially for these challenging jobs like (resident aide care), you get a different kind of worker. It undermines the professional standards of a job.”
Others say introducing private- sector competition into the mix can introduce lean, efficient services that will save taxpayers money. But they also say it must be considered on a case-by-case basis for each state function.
“There are all sorts of areas that the state should consider privatization,” said James Hohman, a fiscal policy analyst with the Mackinac Center for Public Policy, a free-market think tank that has pushed for privatization. “You have to monitor everything to make sure you’re getting the value for the money. It’s not just a blanket privatization arrangement that will work for the state.”
See story @ http://www.lansingstatejournal.com/apps/pbcs.dll/article?AID=2011105150528&odyssey=mod|dnmiss|umbrella|1
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