Out of Control Policy Blog

Do Indiana Privatization Opponents Have Blinders On?

The Indiana Family & Social Services Administration (FSSA) began an welfare eligibility modernization initiative in 2007, and as I discussed here the rollout has had some hiccups along the way (as you'd expect transitioning from a dinosaur, paper-based system to a 21st century electronic system). Weighing in on the hypocritical stance taken by some opponents, Mike O'Brien at the Capitol WatchBlog really nailed it yesterday in this post:

This past week, opponents of modernization pointed to some old data that showed a drop in the growth of food stamp enrollment as evidence that citizens are falling through the cracks of the new system. This was a crafty public relations effort launched ahead of a legislative hearing that took place on Wednesday where a bill was heard that would replace private contractors with state employees. I guess the opponents of modernization, which include public employee unions, would rather have government continue to fail than risk a private solution.

It's worth mentioning that food stamp enrollment is currently growing in modernized counties at a pace of 3% using current numbers. Prior to modernization, FSSA gave away tens of millions of dollars in assistance to people who didn't qualify for it while people who did were stranded on the nation's longest waiting lists.

Incompetence in determining welfare eligibility in Indiana is nothing new, it's actually a decade-old tradition. I don't remember any protests at the statehouse prior to 2005 calling on Governors Kernan, O'Bannon, or Bayh to even acknowledge the problem, much less pursue any solution. Modernizing this process was necessary to replace a paper-based system that was awash in inefficiency, fraud, and waste that earned Indiana a place among states with the nations' longest waiting lists and poorest welfare-to-work rates.

The state could not have adopted such reform without significant amounts of capital investment so a private-sector solution was the best answer. Of course, private-sector solutions are always suspected and usually opposed without any other reason than because they are private-sector solutions.

The public's tolerance for incompetence in government is nearly limitless, which is why this problem got a free pass for so many years. The minute that a private solution was considered every person who couldn't get help was a victim of corporate greed, not a wasteful bureaucracy.

Couldn't agree more. The real test, as I discussed here, is to find out what the opponents' alternative solutions are. In this case, these solutions seem to converge—de-privatize, turn back the clock and recreate the dinosaur that held the system back in the first place. Great solution.

Former Indiana FSSA Secretary Mitch Roob wrote about this initiative in Reason's Innovators in Action 2007.

» Reason's Annual Privatization Report 2008
» Reason's Privatization Research and Commentary

Leonard Gilroy is Director of Government Reform


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