Commentary

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 countyââ?¬â?¢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 Senior Managing Director of the Pension Integrity Project at Reason Foundation, a nonprofit think tank advancing free minds and free markets. The Pension Integrity Project assists policymakers and other stakeholders in designing, analyzing and implementing public sector pension reforms.

The project aims to promote solvent, sustainable retirement systems that provide retirement security for government workers while reducing taxpayer and pension system exposure to financial risk and reducing long-term costs for employers/taxpayers and employees. The project team provides education, reform policy options, and actuarial analysis for policymakers and stakeholders to help them design reform proposals that are practical and viable.

In 2016 and 2017, Reason's Pension Integrity Project helped design, negotiate and draft pension reforms for the state of Arizona's Public Safety Personnel Retirement System and Corrections Officer Retirement Plan, which both passed with overwhelming bipartisan support in the state legislature and were signed into law by Gov. Doug Ducey.

Gilroy is also the Director of Government Reform at Reason Foundation, researching privatization, public-private partnerships, infrastructure and urban policy issues.

Gilroy has a diversified background in policy research and implementation, with particular emphases on competition, government efficiency, transparency, accountability, and government performance. Gilroy has worked closely with legislators and elected officials in Texas, Arizona, Louisiana, New Jersey, Utah, Virginia, California and several other states and local governments in efforts to design and implement market-based policy approaches, improve government performance, enhance accountability in government programs, and reduce government spending.

In 2010 and 2011, Gilroy served as a gubernatorial appointee to the Arizona Commission on Privatization and Efficiency, and in 2010 he served as an advisor to the New Jersey Privatization Task Force, created by Gov. Chris Christie.

Gilroy is the editor of the widely-read Annual Privatization Report, which examines trends and chronicles the experiences of local, state, and federal governments in bringing competition to public services. Gilroy also edits Reason's Innovators in Action interview series, which profiles public sector innovators in their own words, including former U.S. Transportation Secretary Mary Peters, former Florida Gov. Jeb Bush, former Indiana Gov. Mitch Daniels, former New York City Mayor Rudy Guiliani and more.

Gilroy's articles have been featured in such leading publications as The Wall Street Journal, Los Angeles Times, New York Post, The Weekly Standard, Washington Times, Houston Chronicle, Atlanta Journal-Constitution, Arizona Republic, San Francisco Examiner, San Diego Union-Tribune, Philadelphia Inquirer, Sacramento Bee and The Salt Lake Tribune. He has also appeared on CNN, Fox News Channel, Fox Business, CNBC, National Public Radio and other media outlets.

Prior to joining Reason, Gilroy was a senior planner at a Louisiana-based urban planning consulting firm. He also worked as a research assistant at the Virginia Center for Coal and Energy Research at Virginia Tech. Gilroy earned a B.A. and M.A. in Urban and Regional Planning from Virginia Tech.