Privatizing of services here to stay

By Jerry Burris
Advertiser Editorial Editor

State lawmakers stunned even themselves this year when they approved a bill that grants the state and the counties broad latitude to "privatize" government services.

This word, coined originally by author and business theorist Peter Drucker, simply means using private, for-profit companies to provide public services.

The services are still paid for by taxpayers. Decisions about what services will be provided are still made by government

policy-makers and administrators. Responsibility for failure of a privatized service still remains ultimately with government.

Unions fear privatization because they believe it means loss of public sector jobs, and in many cases that is what happens. Others say privatization is simply a way for government to duck its responsibilities. Some critics say it is nothing more than a way to save money by offering "less for less."

But for all the criticism, jurisdictions across the country are experimenting with privatization. It is not unknown even in strong-union Hawai'i.

In part because of the surprise passage of the privatization law this past session, Adrian T. Moore of the Libertarian-leaning Reason Public Policy Institute in Los Angeles recently passed through town.

In a series of speeches, meetings with legislators and others, Moore served up an enthusiastic and wide-ranging endorsement of the privatization movement. In a way, he is a Johnny Appleseed of privatization, spreading seeds of ideas around the country; putting those who have successfully privatized a service in touch with those thinking about it; and collecting statistics and information on privatization's successes.

And also failures. Moore is quite candid in admitting that some experiments with privatization have flopped. Others, he acknowledges, are moving ahead but for all the wrong reasons.

Moore is somewhat impatient with those who pursue privatization on a strictly ideological basis. His belief is that the process can — when executed properly — bring a higher level of service to taxpayers at lower costs.

And yes, he admits, it sometimes results in loss of jobs, although not at the cataclysmic levels often projected by labor leaders. In fact, Moore looks most favorably on privatization efforts in which early savings are directed into job training so that displaced workers can find other jobs in government or better jobs in the private sector.

Although the new Hawai'i law is sweeping in its scope, Moore suggests starting slowly. That means focusing on entry-level positions that do not require particular skills and for which workers are available. It also means focusing directly on the work now done primarily by members of the politically powerful United Public Workers.

The key to making privatization work for all involved is in the contract-writing process, Moore said. Contracts must be specific in the level of service expected, the pay and benefits that will be offered and the outcomes required.

That sounds simple enough. But the devil is always in the details. One way to flesh out those details will be next year's gubernatorial election, which will inevitably focus on the privatization debate.