The Center on Budget and Policy Priorities (CBPP) estimates that in 2010 and 2011, states will face a combined budget deficit of $350 billion. As states grapple with the recession and search for the best methods to alleviate economic and budgetary pressures, some lawmakers continue to propose privatization as an effective policy. In the past few months, there have been proposals to privatize functions across the board: county zoos, libraries, custodial services, parking enforcement, youth shelters, group homes, ambulance services, airports, and transit networks. Wisconsin, for instance, has increasingly privatized the construction engineering services. Just in the past two years, the state outsourced 125 construction engineering jobs, each of which could have been completed by a state worker at a lower cost. Unfortunately, some officials are embracing this “everything must go” attitude towards public assets and services.
The lure is the supposed promise that privatization will deliver a short-term budget fix. Yet many privatization efforts, as this Dispatch will highlight, have cost taxpayers hundreds of millions of dollars and botched services for the public. That privatization continues to move forward despite such a poor track record reflects pure ideology that the private market delivers the most efficient outcomes, even without demonstrable results. Some states may also be making the more cynical decision to pursue immediate short-term infusions of capital at the expense of long-term financial cost in pursuit of short-term electoral gains. In any case, privatization comes at the expense of long-term investments in the community, sustainable budget policy and public accountability. This Privatization Update is part of a series; for past analysis, please visit the Reform Government Contracts and Restrict Privatization section of our website and see our March 2009 and November 2008 Stateside Dispatches