study vs. stifle privatization in Louisville

In Friday's C-J, Dan Klepal reports on an effort by two of Louisville's city council members to investigate the cost of government services.

It's called privatization, or sometimes managed competition. Whatever it's called, it's controversial.

This gets to the role of government and the question of federalism or decentralization-- and privatization. In what contexts, should the government intervene in the provision of goods and services. And if it's decided that the government should intervene, at what level should the intervention occur: federal, state, or local? And to what extent should that government be involved: for example, in operating schools (as with education) or empowering the poor to obtain food within the private sector (as with food stamps). Should a government bureaucracy fill potholes or should it collect taxes and pay private providers to take care of business?

Louisville Metro Council members Tina Ward-Pugh and Ken Fleming want to study the cost of government services -- from filling potholes to picking up garbage. Some fear it would be a first step toward privatization, taking jobs from government workers and giving them to private companies. Ward-Pugh and Fleming -- a Democrat and Republican, respectively -- deny that's their motive...

Both Ward-Pugh and Fleming say they believe the study will find that city workers do a good, economical job. They say they're not trying to use the study to build a case for outsourcing government jobs. Other cities and states have gone through a similar process.

But Fleming, from the 7th District, does say that managed competition would force government workers to come up with even more economical ways of performing their tasks. And he said the study would provide more "transparency" in government because taxpayers will know how much they're paying for the services.

Good stuff: bi-partisan, study the issue, investigate whether the private sector might be more effective than the public sector, transparency, etc.

Chad Carlton, a spokesman for Mayor Jerry Abramson, said there's more to providing government services than a simple review of cost. "Cheaper isn't always better," Carlton said.

Carlton is correct. It's not cost (alone) or quality (alone); it's quality per dollar. Both should be considered...

For an idea of how controversial privatization is, consider a message that was posted on the AFSCME union Web page earlier this year when the plan was first announced. AFSCME, which stands for the American Federation of State, County and Municipal Employees, represents about 900 metro employees.

"We need to have members to sign up to speak out against this legislation. We need to forward e-mails, faxes and phone calls to the members of the Budget Committee, as well as our individual council members, and urge them to reject this Union Busting Legislation."

After listing all 26 council members' telephone numbers, it said: "LET'S DO THIS!!!!!!!"

OK, it's "controversial" within the union! It'll be interesting to see whether the interest group can leverage its pull to eliminate the study-- or at least, to mitigate whatever findings are not in its best interests.

"Citizens need to have some control over the services they pay for,'' Carbenia said. "When they are in the hands of private companies, it's about dollars and cents and not service. Citizens pay more and get less under privatization. It's just that simple."

OK, so citizens have more control when a government monopoly with union workers is taking care of things? With the unions, it's not about dollars and cents? Citizens pay more and get less with privatization? So why are they so upset about having the issue studied?

Denny Norris, a spokesman for Teamsters Local 783, which represents nearly 1,000 metro employees, called the study "smoke and mirrors." "Companies will low-ball the bid then jack their prices up," Norris said. "The city loses all control with this."

Unions don't "low ball and jack"? And then Mr. Norris takes us back to "control"...

Ruffin Hall, finance director for Charlotte, N.C., said managed competition has saved the city there "millions and millions" since the 1990s. But, he said, it's not as easy as it sounds.

In Charlotte, departments enter bids against private industry. Hall said that the city wins "most of the time," and that the process has forced departments to be more efficient to win those bids.

"We've become sharper, quicker and faster," Hall said. "Lots of cities try to mimic this, but you've got to make a strong commitment to the program. Being successful in this is not simple."

Good stuff on some probability of success-- but also, the importance of theory vs. practice. To critics of government and proponents of privatization, these always look good-- but often don't deliver much in reality (for a variety of economic and political reasons).

The commitment begins with a strong audit division that will monitor how the private companies perform in fulfilling the contract in areas such as responding to citizen complaints. One advantage Charlotte has over Louisville: North Carolina is one of two states in the nation that prohibit public-sector labor unions.

"That's a stumbling block," Hall said. "The unions tend to go nuts-o."

Nuts-o, huh? (I'm not sure I've seen that word in print before!) Anyway, see the seven exclamation marks and incoherent arguments above...