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Privatizing state jobs questioned

Monday, March 29, 2004 | 12:00 a.m. CST; updated 1:59 p.m. CDT, Saturday, June 28, 2008

JEFFERSON CITY — A customer-service operator in India answers the phone when Missourians have questions about the state’s food stamp program.

That’s because the state contracted with a Scottsdale, Ariz., firm, and its customer-service department in India two years ago to manage Missouri’s electronic benefit cards for food stamp and welfare programs.

Privatizing jobs

The arrangement doesn’t sit well with Rep. Mark Abel, D-Festus, who said taxpayer dollars should be used to create jobs, “not send jobs overseas.”

Abel is sponsor of a measure that would require state government contracts to stipulate that only U.S. citizens or residents do the work.

But a larger issue is how much government work should be farmed out to private enterprise.

States have been looking at privatizing government services to save money. Supporters argue it saves taxpayer money and increases efficiency. Critics say privatization means giving family-supporting jobs with benefits to low-paid, under-skilled workers who face little or no government oversight.

Last year, the Missouri Legislature set up a special subcommittee charged with exploring opportunities for privatization. Its recommendations are due by the end of the year.

Some legislators don’t want to wait that long.

Sen. Dan Clemens, R-Marshfield, has sponsored a measure that would require the head of each state government agency to submit to the office of administration a list of activities that are not “core functions” of government, with the goal of identifying programs that could be outsourced to private industry.

His bill has stalled in the Senate.

Sen. Ken Jacob, D-Columbia, filibustered the bill.

“There is a perception that private industry will create something better than the public interest, but I’m not sure that’s true,” he said.

The privatization push has also sent a scare into many state workers, who once felt they held secure jobs.

Abel, who is on the privatization committee, said Missouri should develop guidelines before resorting to privatization. But government officials say it’s too late.

“Privatization is treated as if it were a brand-new thing, but we’ve contracted many, many services for years,” said Ann Hamlin, a spokeswoman for the Office of Administration. “And some services have always been privatized.”

Contracted services

State officials said that most of the state purchases of goods and services last fiscal year — from $1.4 billion to $1.5 billion — was spent on dozens of contracted services. They include student loan processing for the Department of Higher Education, laboratory services for the Department of Mental Health and health care for Missouri prison inmates.

In 1998, the St. Louis Post-Dispatch reported about more than 20 cases nationwide in which inmates died as a result of alleged negligence, indifference, understaffing, inadequate training or cost-cutting by private health care companies.

Some of those cases involved Correc-tional Medical Services, a St. Louis-based company that provides health care to inmates in Missouri prisons and those of many other states.

Even if Abel’s bill does pass, Missouri is contractually obligated to the firm that uses the India call center until 2007. Moving it back stateside would cost Missouri an extra $531,000 per year.


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