Out of Control Policy Blog

Milwaukee County Board Nixes Privatization, Again

Generally speaking, the Milwaukee County Board of Supervisors has become a destination where good privatization ideas go to die. County Executive Scott Walker knows this well, having made numerous, sensible attempts to pursue outsourcing in several areas of government, only to see them mostly get squashed by the union-friendly County Board. As I wrote in Reason Foundation's Annual Privatization Report 2009,

In September 2008, Milwaukee County Executive Scott Walker released his 2009 budget, which included proposals to privatize several county services, including vehicle maintenance, operation of the county’s economic support call center and non-medical services at the county behavioral health hospital. The proposal also allocated $500,000 for a study assessing the potential privatization of General Mitchell International Airport. [...]

The privatization discussion quickly became politicized. In November 2008, the County Board cut the privatization measures from its version of the 2009 budget. Walker responded with a series of line-item vetoes that effectively restored nearly all of the privatization measures the County Board had cut. In turn, the County Board responded with a corresponding set of veto overrides that eliminated most of the privatization proposals from the budget. There was one notable exception, however. Walker and the County Board both agreed to proceed on a contract for food services at the behavioral health hospital, replacing 70 food service employees at the complex. This contract began in June 2009.

Walker's plans to privatize Mitchell International Airport failed to move forward after a County Board committee voted unanimously in October 2008 to reject his request for a $500,000 consultant study of a possible deal. Walker had pitched his airport privatization proposal as a way to generate $25 million a year for transit.

Walker indicated that he would likely resubmit separate legislation to recreate some of the privatization initiatives he had originally proposed. He brought the call center privatization proposal back to the County Board in January 2009 and was rejected a second time. The troubled call center has been under fire in recent years for severe staff shortages, prompting citizen complaints and a federal lawsuit. In addition, Walker's administration issued a request for proposals in July 2009 for an initiative to potentially outsource janitorial and security services currently provided by the county facilities division. If it decides to move forward, the administration would include the initiative in its 2010 budget proposal.

Though I suppose it must feel like beating one's head against the wall, I give Executive Walker tremendous credit for his persistence in pursuing these initiatives, because the County is on an unsustainable fiscal path. Apparently that message is still not getting through to some of the County Board:

The County Board's finance committee on Tuesday recommended rejection of privatizing security and housekeeping services at the courthouse complex.

County Executive Scott Walker's budget estimates the moves would save $1.7 million in property tax money next year. They are part of his solution to fill an $80 million hole in the 2010 budget.

The panel also called for rejecting a plan to substitute Air National Guard firefighters for county employees to provide crash and rescue service at Mitchell International Airport. That would save the airport, which is funded mainly through fees from airlines, an estimated $619,000.

Hiring private companies to do the work also would mean elimination of 92 county jobs - 25 airport firefighters, 31 security guards and 36 housekeepers. County workers would get first crack at applying for their old jobs with a private contractor, under Walker's budget. In all, Walker is proposing outsourcing 207 county jobs for 2010, for a first-year saving of $5.9 million.

Supervisors said hiring private firms for security and cleaning posed safety concerns, and private workers wouldn't do the job as well as county workers. [...]

[Walker] disagreed that hiring private firms for security or housekeeping would compromise safety at the courthouse. Major corporations use private security and housekeeping successfully, and the county should also be able to, Walker said.

Walker questioned whether there would be enough votes to kill the privatization moves. He also wants to privatize additional housekeepers, case managers for patients at the Mental Health Complex and mainframe computer technicians.

The courthouse security outsourcing was rejected on a 5-1 vote, and the housekeeping privatization was dumped on a 4-2 vote by the finance panel.

More to come on the continuing privatization saga in Milwaukee County.

Leonard Gilroy is Director of Government Reform


« The Dump Truck Stimulus | Main | Steven Wynn Talks Jobs, Economy,… »

Comments to "Milwaukee County Board Nixes Privatization, Again":

supra shoes | October 22, 2009, 9:45pm | #

I must say this is a great article i enjoyed reading it keep the good work.

True Religion jeans | October 22, 2009, 9:45pm | #

Thanks for your useful info, I enjoyed listening to it.

LilyL | October 23, 2009, 12:47am | #

Indeed it was a great article! Thank you very much for the very useful information! By the way, if you're the kind of person that thinks credit cards are evil, then you might get some Schadenfreude out of what banking analysts and economists are predicting. The next huge hit that banks are set to take is because of the plastic devils – the bulk of credit card funds lent are held by three huge banks, Bank of America, Citigroup, and JP Morgan Chase. There's over $76 billion in outstanding debt, and all that easy credit they got their buddies at the Fed to create (from thin air) is now coming to bit them in the backside, and there's also been loosening restrictions on bankruptcies. That's why the rates are rising and limits tightening on credit cards.

marv | October 23, 2009, 8:54pm | #

You must be republicans because only a "Corporate" republican would think that adding 30% more in cost would be good. That's the cost you add when you privatize government functions. Government is NOT bad unless you feel that "We the people" are bad. Government is of, for, and by "We the people" and if we don't do the job right REPLACE THEM, not privatize something that you will then NOT have control over!!!!

Orville Seymer | October 23, 2009, 10:52pm | #

While the above comments are right on target, I doubt that any of you completly understand the true gravity of the situation that Milwaukee County is in.

Milwaukee County pays 93 cents in benefits to its employees for every dollar that it pays out in wages to its employees.

While that number is shocking and should be around 35-40 cents for every dollar paid out in benefits, what should jolt everyone into reality is that GM or better known now as "Governement Motors" went bankrupt because they were paying 84 cents in benefits for every dollar in wages.

Only in government would this even be considered rational, let alone tolerated.

Chris Kliesmet | October 24, 2009, 10:50am | #

Marv:

You MIGHT have an argument IF government employees were being properly supervised, IF they were held to some form of efficiency standard and IF you could easily fire them.

In fact, the supervision is poor or non-existent (how can janitors sleep on the job for hours), government has NO efficiency standards or methodologies in place to measure performance (how could they not notice the drop in janitorial output), and government cuts sweetheart deals with the unions that that make it difficult to replace under-performing employees (in return for their political support of course).

Also, I do not understand why a private firm means you LOSE control when you have the power to negotiate ANY contract terms you want in a competitive environment (unlike a union monopoly). You can demand the firing or replacement of any single employee or the ENTIRE COMPANY! It seems to work for virtually every private corporation

Finally, we must address the issue of compensation that is above market. Hard to do in a union monopoly environment. What is "Plan B" if the unions balk? Let's see, oh yeah, it's the union or nobody!



Out of Control Policy Archives