Privatization has become a hot topic in cities and states all over the country in recent years. The decline in tax revenues, coupled with aging infrastructure and populations has forced municipalities to search for ways to reduce government expenditures including the sale of assets and transfer of functions and services to the private sector.
Indeed, the city of Alameda has faced this issue in the last two years with the Animal Shelter and the Chuck Corica Golf Complex. Finding a way to fund the shelter, repair and manage the golf course are cases in point.
Selling off public assets or outsourcing services may seem like a reasonable solution. However, national news stories and books tell of the loss of billions of taxpayer dollars paid to private agencies that were contracted for troop support activities during the Iraq War. At the state level we see prison systems turned over to private for-profit companies and roads sold to companies that profit by charging tolls. Recent news stories have highlighted the problem of for-profit colleges that secure government loans for students who then default and fail to graduate.
At the local level, parks, recreation centers and charter schools are examples of services turning into profit centers for many companies. Some nonprofit organizations also have come under scrutiny as reports of excessive administrative costs and pay come to light. Evidence of malfeasance and poor management by private
The League of Women Voters of the United States (LWVUS) studied the issue of privatization. League members read reports and discussed successful and unsuccessful efforts. Committee progress was published in the monthly "Voter." After compiling recommendations from more than 200 leagues throughout the country, the LWVUS adopted the position that with proper safeguards some privatization can be beneficial to a community. No attempt was made to support or reject
the concept of privatization.
However, privatization is not appropriate when the provision of services by the government is necessary to preserve the common good, protect national and local security or protect the needs of the most vulnerable of its citizens. The league believes any privatization should be made after an informed, transparent planning process and thorough analysis of the implications of the effort. In addition, ongoing oversight and periodic performance evaluation must be done. Strategies for terminating the contract if needed should be in place.
Best practices for government regulation of the privatization process should include the following requirements:
State and local governments considering privatization should benefit from this study. Municipalities and citizen groups have a benchmark to assess these proposals. Additionally, the league has a sound reference for supporting, remaining neutral or opposing programs being considered for privatization by our government.
Anne Spanier is chair of the Privatization com- mittee for the League of Women Voters of Alameda.