Privatization has yet to save state money

From the Houston Chronicle:

Privatization of functions formerly performed by government workers has yet to achieve any of the predicted $21.7 million in savings at the Texas Health and Human Services Commission, the state auditor reported Tuesday.

And, the auditor found, it's not clear whether using private workers for payroll and human resources jobs will save the state any money at all.

The commission says it never expected to save money in the first year but concedes it has sliced its own projected cost savings in half since the private contract was awarded last year.

The auditor sharply criticized the agency for "significant errors and omissions" in its assumptions about how much it would cost a private company versus the government to perform the administrative duties.

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I'm not so foolish as to suggest that there are no services that the private sector cannot perform better than the public sector, but this report stands in the face of longstanding conservative claims that the private business always outperforms the government. Furthermore, even though the state seems to be breaking even in dollar terms on this particular privatization deal, what Texas is losing is a certain level of public control and accountablility over its HHS functions. That means less democracy, which is, obviously, not a good thing.

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