COMMENTARY ON PRIVATIZATION : County Needs Latitude to Contract Out Jobs, Save Tax Money : L.A. County has saved millions by privatizing. General-law counties, like ours, need the freedom to do likewise.
IBM did it. General Motors did. Orange County government didn’t do it. It didn’t downsize.
With 16,000 workers, Orange County government is the biggest employer in Orange County. Despite a recession and a budget crisis, it only laid off 16 people during this fiscal year.
Today the county is facing a budget cut of $170 million. In short, our county supervisors cannot afford not to trim the county sails.
That’s why I hope to join State Sen. Marian Bergeson (R-Newport Beach) in introducing a bill that will allow general-law counties, such as Orange County, greater latitude to contract out government services to private firms.
This bill, if passed, would give general-law counties the same powers that Los Angeles and 11 other “charter” counties have. By amending state law, the state’s 46 “general-law” counties will be able to contract out numerous government services, saving the taxpayers millions.
The alternative is to introduce a bill to let Orange County become a charter county like Los Angeles. This would allow us to draw up a charter that specifically allows the kind of privatization that state law now prohibits.
According to the best estimates available, Orange County could save nearly $200 million by contracting out government services to private firms. Auditing, custodial services, landfill equipment operation, harbor patrol services, and jail-food preparation are just a few activities that could be better handled by private companies, along with over 50 other functions.
While some private companies have closed their doors and others have laid off thousands during this recession, few local governments have actually terminated anyone, even though their work forces grew at twice the rate of the population during the past 10 years.
Not only have governments not slimmed down or privatized, there also are some that have allowed departments, such as the County Survey Office, to actually compete with the private sector for business.
The cost of government at all levels has risen so dramatically as to place a heavy burden on taxpayers and our economy alike.
We are at a crossroad. If we raise taxes higher, we will crush both taxpayers and business. We cannot end vital services. The only way out is to cut all but the most needed services, trim the needed programs, reduce the size of all government and, above all, turn as many government services and functions as possible and prudent over to the private sector; privatize.
Government employee unions have so far managed to defeat privatization bills. They argue that government workers will lose their jobs along with their coveted health, retirement and other benefits. And they believe that these benefits won’t be offered to private-sector employees.
It’s the same argument that Los Angeles supervisors faced back in the ‘70s before privatization took off.
Thanks to a growing taxpayer revolt, a contracting-out amendment was written into Los Angeles’ county charter in 1978, the same year that Proposition 13 slashed property taxes. Beginning with custodial services, security guards, landscaping and other “support services,” the county government began trimming the fat. Fleet maintenance costs plummeted as cars spent less time in the shop. County airports, now managed by private firms, operate at a fraction of the cost of government-run facilities.
Then in the late ‘80s, Los Angeles County began privatizing other major activities, contracting with employees from the private sector to work on welfare programs, workers’ compensation and administration. The result was annual savings of $53 million.
How did Los Angeles County supervisors prevent kickbacks from flowing to corrupt contractors? Though this is always a potential problem, the supervisors have largely solved it by instituting a system of checks and balances and decentralized departmental control.
Los Angeles County didn’t make the mistake of New York, which allowed a “contracting czar” to control all final decisions.
Today, Los Angeles’ County Contracting Coordinator Chris Goodman is getting calls from state and local governments facing budget cutbacks nationwide. As Los Angeles’ success is duplicated across the country, there is growing realization that the only way to run government like a business is to give it to a business to run.
Lenny Bruce understood privatization better than most. He said that free enterprise is all about options. “If (Gimbels) is really ridiculous, I walk. . . . I can always go to Macy’s.” Government control, he added, “is like one big phone company. . . . If I get too rank with that phone company, where can I go? I’ll end up like a (jerk) with a Dixie Cup on a thread.”
If we don’t want Orange County to end up like some jerk, we’d better increase our options. Or, to paraphrase Gov. Wilson, we need to privatize, job by job by job.
