Halting Baltimore's privatization?

February 18, 1993

Since last May, a Baltimore City task force has been examining which municipal functions could be privatized. The panel, chaired by Councilman Anthony J. Ambridge, has now concluded its study. It estimates that $580 million (30 percent) of the city's current $1.86 billion operating budget already goes to private contracts that had formerly been performed by the municipal government.

"Such privatization raises two concerns: one, is the city really saving money when all the costs are factored in; and, two, are we considering the social costs to our employees and to the city when we contract services out to the private sector," Mr. Ambridge states in the preamble of a City Council bill he has introduced to create a special office to regulate further privatization.

The office would consist of four city officials -- finance director, auditor, purchasing agent and chief of the Equal Opportunity Compliance Office -- as well as of the dean of Morgan State's School of Business and representatives of the city AFL-CIO and Chamber of Commerce.

Any city agency seeking to farm out work to a private entity would not only have to show the panel substantial savings but also provide a multitude of complicated cost and benefit calculations. Just how extensive the required red tape would be is suggested by the Ambridge bill's stipulation that agencies would have to determine "the full cost of not implementing social policies, such as the long-term cost to the city of ignoring any provision of the [black and women's minority business] program, the equal opportunity employment program and the preference for hiring city residents."

This language is so sweeping that the Ambridge bill reads like an attempt to halt further privatization of city business -- and loss of unionized city jobs -- by sinking it into a morass of red tape.

Privatization became a fad under the Reagan and Bush presidencies, spreading from the federal level to state and local governments. Experience shows that some governmental functions can be privatized, but others ought not be. It is not a panacea. Yet privatization continues to have appeal because it is generally conceded that private businesses can do many things more efficiently and cheaply than governmental entities wedded to featherbedding, turf protection and red tape.

We favor privatization, if that means relief to taxpayers and better service for citizens. But we also want to see efficiency and increased productivity in on-going government activities. Unfortunately, the current bill creates a cumbersome mechanism that would halt further privatization without requiring any improvement in city workers' job performance.

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