Brendan Fischer at CMD tells us two sordid tales of privatization gone awry.
In Chicago, a Morgan Stanley-backed company took control of 36,000 public parking meters with a 75-year contract -- and as a result, parking fees have exploded, meters run until 10pm, and taxpayers must reimburse the company for lost meter profits when they want to hold a parade or street fair. The plan was quickly pushed through the City Council and passed with no public input or debate.
In South Carolina, after the state outsourced its water system, the for-profit corporation failed to pay state employee payroll taxes, lost track of tens of thousands of dollars, and lost millions of gallons of water. But the private company refused to come clean about what happened and comply with the public records law's transparency requirements, despite being funded by public dollars.
In The Public Interest -- an offshoot of AFSCME -- summarizes the pitfalls of privatization:
Outsourcing means taxpayers have very little say over how tax dollars are spent and noRecently, In The Public Interest came up with a legislative agenda to empower taxpayers to take back the assets they own. The Taxpayer Empowerment Agenda includes some great ideas. Here are a few of our favorites:
say on actions taken by private companies that control our public services. Outsourcing
means taxpayers cannot vote out executives who make decisions that hurt public health
and safety. Outsourcing means taxpayers are contractually stuck with a monopoly run
by a single corporation – and those contracts often last decades. And outsourcing too
So often it's true.
often means a race to the bottom for the local economy, as wages and benefits fall while corporate profits rise.
Read more about it here.
Regularly post online how much taxpayers are spending on private contracts and how many workers are employed by those contracts, just as government does.
Make sure every contract allows government to cancel the contract if the company doesn’t live up to its promises of quality and cost savings.
Prohibit any company that has evaded taxes or broken the law from taking over public services. (YES!!!)
Require companies that privatize public services to pay their employees a living wage and provide reasonable benefits.
Ban contract language that guarantees company profits.
Ensure that public service workers have the opportunity to submit their own plan to save money and provide quality services.