Taking state government private

July 13, 1992

One of the buzzwords of the 1990s is "privatization" -- turning government operations over to the private sector. Eliminate red tape and onerous operating costs. Let companies, spurred by the profit motive, run things. They can do as good a job and at a cheaper price.

Slowly, governments are starting to experiment. Results have been mixed. Maryland last fall leased the Hickey School for delinquent juveniles to a private company but the move has been accompanied by a good deal of criticism. The state prisons' health services are provided by an outside vendor, with less than favorable results. On the other hand, Baltimore City turned its $1 million operating loss at the Arena into a profit by putting Abe Pollin's Centre Management in charge. And the state privatized money-losing University Hospital and watched it turn into a thriving success.

Now a gubernatorial task force will examine privatization options. The group, headed by former transportation chief William K. Hellmann, will present its conclusions at year-end on such questions as whether to sell the World Trade Center or the Port of Baltimore, whether to sell or lease Baltimore-Washington International Airport, whether to sell toll roads to private operators and whether to lease state health facilities to for-profit ventures.

Another state group, studying efficiency in government, is also examining privatization. Its report later this week may suggest some immediate steps. Gov. William Donald Schaefer certainly seems interested. He has just returned from Toronto, where he toured Lockheed Corp.'s international terminal at Lester B. Pearson Airport. Lockheed and a private partner financed the bustling facility. It also manages the terminal. Lockheed and Westinghouse are interested in running all or part of BWI.

That kind of undertaking could prove appealing, since the state would be hard-strapped to come up with the $150 million to build a much-needed international terminal here. And the state could never match the marketing skills of a international firm like Lockheed in the crucial task of luring new air carriers to BWI.

But there are serious concerns. The state has huge investments in these facilities. They can't simply be given away. Moreover, the state has an obligation to see that service is maintained and improved even if a private owner takes over. Quality control is key. Also, in some cases, the facilities are crucial economic development engines. What if a private company botches the job and the state's future is jeopardized?

Turning appropriate government agencies and facilities over to private operators is the right thing to do -- but only with stringent oversight controls and assurances that the public's interest will not be pushed aside in the rush for a profit. State officials should proceed along this line, but with considerable caution.

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