Taking Maryland government private

Bruce Bortz

January 14, 1993|By Bruce Bortz

ALMOST at the very moment this newspaper is arriving at your home or newsstand, members of the Senate Budget and Taxation Committee, on the second day of this year's General Assembly session, are getting briefed on "privatization" by William K. Hellmann, former state transportation secretary and now managing partner of a prominent city engineering firm.

Mr. Hellmann, a trusted ally of Gov. William Donald Schaefer, headed the Maryland Task Force on Privatization, which publicly released its recommendations late last month.

Privatization is a bastardized word that refers to the turning over of government services to private, profit-making firms. Although it doesn't excite most people, the concept has been the darling of conservatives for some years, and it's a subject that gets business people a tad more interested in the doings of state government.

During the 1992 regular session, the General Assembly, through a resolution, asked the governor to review what functions of state government could be privatized. Last fall, the governor appointed a six-person, Hellmann-led task force to do that. Over the next four months, the task force, made up solely of private sector folks (and not a single expert on the subject), met publicly nine times.

Encouraged by the governor, who had privatized a major incinerator while he was mayor of Baltimore and had employed a number of privatization concepts with his "shadow government" at City Hall, state cabinet secretaries came in to suggest current departmental functions that might be better performed privately. Various organizations sent representatives to offer support and to suggest functions that could be transferred.

As the panel did its work, the governor's only additional instruction was to be sensitive to the needs of state employees.

The Hellmann task force endorsed a list of 60 functions -- 50 put forward by the cabinet secretaries, 10 added from the outside -- that could be done privately. Most are mundane -- stuff like courier service, lab tests, marina operations. Privatizing most of those 60 functions can be done by the Schaefer administration without authorizing legislation.

The task force's three biggest suggestions are a bit tougher, though. The real need, the group said, is a new way of thinking. The panel suggested top public officials ask themselves as a matter of course which services can be turned over to business people.

The second suggestion seemed to win the governor's support: Create a continuing Advisory Council on Privatization to evaluate ideas coming in from outside the government.

A top CEO presumably would be chairman, and the members could be drawn from the ranks of business.

The third suggestion was to put a cabinet department -- Budget and Fiscal Planning -- in charge of implementing council-approved privatization proposals. The idea makes sense; cabinet heads will be less likely to resist privatization if one of their fellow secretaries is the "idea executor."

The Hellmann recommendations come shortly after the failure of the state's latest and biggest experiment in privatization -- the operation of the Charles H. Hickey Jr. School for delinquents in Baltimore County. The task force did not discuss the Hickey failure, leaving that analysis to others.

But what happened at Hickey surely demonstrates that privatization isn't always the answer.

The key question, the task force suggested, isn't how privatization can make government smaller. Government contracts must be carefully administered to make certain private companies do what government wants done.

Nor, in the panel's view, is the question to be asked always which way is the cheapest. For example, in transportation, cost may be the most critical consideration. In social services or public safety, cost may be nearly irrelevant. Instead, the task force simply wants state managers to begin asking whether privatization makes sense, job for job, service for service.

States like Michigan and Massachusetts are moving rapidly toward increased privatization. Both are led by hard-charging, first-term, middle-of-the-road Republican governors. In two other states, Texas and New York (both headed by liberal Democratic governors), extensive privatization studies have been conducted, but not much has resulted. The Hellmann task force wants Maryland to set a cautious pace.

How quickly Maryland government eventually moves down the privatization road depends on the one man who drives the vehicle of state -- Governor Schaefer. If privatization is to expand in Maryland, the governor will have to take the lead. But that will only happen if he adopts the task force's approaches as his own.

So far, at least, Mr. Schaefer seems wary.

Bruce L. Bortz is editor of the Maryland Report newsletter and political analyst for Channel 45. He writes here every other Thursday.

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