Bill Keisling reports on a zany new idea that may be coming down the pike. This is a privatization plan that I would oppose completely. Unlike retail alcohol sales, where we know that private retailers know how to do it, delivery of honest-to-goodness public social services is not something private companies have experience doing. I have no idea why anybody would think outsourcing the administration of these programs would yield savings or better results.
That’s not to say there’s no room for changes at DPW. I might prefer a different mix of policies and programs to the current set. But the task for people like me who might want to see DPW try some different approaches to achieving its goals is to propose some alternative approaches. The areas ripe for reform are on the programmatic side, not so much the administration side. Are the programs they administer working or aren’t they? Would something else work better? Are they being delivered in a cost-effective way? All legitimate subjects of debate, but none of them likely to be addressed satisfactorily with lazy hand-waiving toward privatization. The public vs. private question just isn’t really interesting or relevant here.
Actually there have long been private contractors who have been engaged by DPW and other state departments administering welfare, medical, and other state benefits. Their track record is by and large quite good.
Keystone Mercy is one example that comes to mind, which administers a great deal of the state Medicare/Medicaid insurance coverage.
I think it is important to remember that the primary reason for privatization of state programs is not to cut benefits, which many simply assume to be the case, but to reduce the number of very expensive state employees whose pension benefits are sinking the state budget.
This is true not only for DPW, but for the Liquor regulation mechanism, Lottery, and any state employee who can have their job replaced by a credible, proven private contractor. It may be at the same cost but the long term cost is where the state realizes the savings.
In other words, no need to panic.
It may be at the same cost in the present budget to replace a state employee, but a private contractor saves millions in the long term in pension costs to the state taxpayer, and we are facing a taxmageddon if we don’t reduce the state pension obligation. Rendell kicked this can down the road.
It simply isn’t possible or right for the Democrats to try to use the old tactic of kicking the can down the road to save state jobs. It risks deep cuts to schools and social programs to avoid coping with the pension obligation via cutting state employees using privatization.