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IN: New Resistance to Privatizing Social Services

With a change in party control of Indiana's legislature, one shift may be new resistance to Indiana Gov. Mitch Daniel's pell-mell movement to privatize all public services.

"Our caucus basically does not support privatization," said Speaker-elect Patrick Bauer. "We don't support making profit out of poor people or mentally ill people," referring to the new proposal to give a $1 billion, 10-year control to a consortium to take over welfare-eligibility processing. This follows a slew of recent privatization initiatives in the state:

  • Outsourcing the Department of Corrections' food services
  • Giving a 75-year lease of the Indiana Toll Road to an Australian-Spanish consortium
  • Beginning the privatization of state developmental centers

These have been matched by unsuccessful attempts to privatize state park inns and other proposals that are on the drawing board.

Despite the magnitude of change involved in privatizing social services in the state, the Governor scheduled just one hearing at 9am last Friday-- which didn't stop community members such as Cornell Burris from the NAACP from denouncing the corporate contracting out as a "sham" that was excluding community input.

As we noted earlier this year, one problem with these kinds of privatization deals are the incestuous deals that threaten to corrupt politics. For example, the consortium, Affiliated Computer Systems, vying to run these social services is the former employer of Indiana's Family and Social Services Administration, Secretary Mitchell Roob, just par for the course for a scandal-plagued company that had to oust its CEO and CFO last week over improprieties surrounding its stock option plans.

Instead of such rushed privatization, states should enact rules that require careful evaluation of the costs of contracting out and whether in-house alternatives are more cost-effective. Hopefully, Indiana will be moving in that direction with its new legislative leadership.

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