SADOW: And Now, Some Dumb Anti-Privatization Bills

Today at hearings of the House and Governmental Affairs Committee, state Rep. Kenny Havard might repeat what he said about his HB 240 on a previous occasion that the bill was not against privatization. Should he do so, it merely proves that he is ignorant or disingenuous.

Havard’s bill, along with the nearly-identical HB 519 by state Rep. Cameron Henry, would place numerous roadblocks to privatizing state government services. Currently, state law has the executive branch negotiate any such agreement and report it to the Joint Legislative Committee on the Budget, where this does have not a specific legislative prohibition such as if a state-owned hospital has its emergency room closed or is cut more that 35 percent in funding or in the case of privatizing benefits administration. The JLCB only may review and require additional information, but it cannot intervene in any way unless for a particular type of transaction the law specifically states it must approve. Meanwhile, the Administrative Procedure Act and internal executive branch rules provide many oversight opportunities to vet a contracting decision.

Not only do these bills require that contracts of a certain size (from minimums of $500,000 to $5 million depending on the bill and kind of contract, with some being entirely exempt) go in front of particular legislative committees for approval, but they create a burdensome and discriminatory process to get there. At the theoretical level they are noxious because they allow for legislative micromanaging of executing the law; there’s no sense in having a full-time executive branch to perform its lawful functions if an inexpert part-time Legislature, or parts of it, can veto administrative actions at this level.

But at the practical level, a very similar law in Massachusetts demonstrates their anti-privatization effects. They would increase substantially costs of contractors even to bid on projects, put state employees ahead of taxpayers by requiring consideration (HB 240 includes additionally a minimum salary component) to hire displaced state employees in the contract, skew the analysis to emphasize costs but not benefits of contracting, and would make the process cost more and slow down much more. These are almost word-for-word following Massachusetts’ “Pacheco Law” that from its start a decade ago has in the eyes of observers shut down privatization there almost completely.

Understand that the real impetus behind these bills is because Havard, Henry, and others in order to achieve furtherance of their political careers simply don’t want to stand up to special interests. When correct decisions for taxpayers get made but that raise the ire of these and their allies among ideological true believers in big government and/or unions, they want to have an escape hatch to halt politically inconvenient policy.

Also, as the Gov. Bobby Jindal Administration has moved somewhat aggressively to privatize in order to achieve efficiency and cost savings in leaner budgetary times, this has run against the grain of Louisiana’s political culture where legislators are all too comfortable with the idea that government should be a direct provider of jobs, which then allows politicians to take credit for provision of them. Privatization not only eliminates that ability but also then risks them catching heat by the disgruntled few who may end up losing their jobs or finding themselves in the private marketplace that more appropriately prices their labor to the benefit of taxpayers.

In Henry’s case, revenge also could be part of the motive. Entrusted by Jindal legislative allies with an important committee position, the same stripped him of that when he bucked them on a privatization issue. Petulance makes for even worse policy-making that does spinelessness. And it’s not like either of these bills is needed for the Legislature to have input on specific contracting decisions: if the JLCB sees a contract about which it has serious questions, it merely need tell the agency in question that if it doesn’t like what it sees, it simply will recommend (it reports prior to a session and every quarter on its activities) to the entire Legislature that it should defund that activity in the budget.

It could be that Havard and Henry do know all of this and choose to push these bills because they support an agenda of bigger and more wasteful government. But if not, there’s no excuse for either to be so ill-informed on this issue that they disserve the public by shilling for these bills. And if they do know of their consequences yet continue to assert the opposite, then it shows they’re dishonest. (Havard already has been, when arguing in support of his bill by citing an instance where a contractor behaved contrary to terms but selectively not addressing any of many incidents of corrupt or wasteful activities by state government employees that negated this argument.)

Regardless, legislators who support efficient government operation should see through this and defeat these efforts to disempower taxpayers in favor of special interests and political careers. Not every privatization effort may be worthwhile, but the means exist already to ensure inferior attempts don’t win without resorting to such blatantly biased bills that ultimately punish taxpayers just when right-sized government is most needed.

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