Outsourcing in Florida

As public-agency budgets around the state tighten, we’re likely to hear a push for more privatization both inside and outside higher education. But this isn’t a new call, either in Florida’s state government or in higher education nationally. In the last few years, UFF members participated in a downtown Tampa protest of a city privatization effort, and USF student protests helped the USF uniformed police (represented by PBA) gain a contract even after the university first tried appeasing students by outsourcing some security operations to AlliedBarton.

While outsourcing is part of a repertoir that both Democrats and Republicans have used, Jeb Bush’s administration is the political tenure in Florida most closely associated with outsourcing. Bush’s record on privatizing public services is mixed at best. In 2004, Lucy Morgan reported on an auditor’s finding of rampant conflict of interest in the awarding of the statewide PeopleFirst contract. At the end of Bush’s second term, reporter Joni James wrote a critical review of the Bush privatization record. From James’s article:

For every success Bush can point to – cheaper Florida Lottery overhead, better third-party Medicaid collections – there has been an embarrassing misstep and sometimes corruption. And undermining the privatization push is a stunning lack of information about how well it has performed in the past eight years. Audit after audit, including some from Bush’s own inspector general, concluded that the savings or other benefits of such private deals were often impossible to deduce because the contracts written early in Bush’s administration lacked clear parameters.

Privatization continues in the state, with new scandals, including claims of a “rigging of the process” by one prison system vendor and allegations of conflicts of interest (with one administrator allegedly pushing to have his friend hired by one vendor). USF’s staff is represented by AFSCME Local 3342, and the national AFSCME keeps a watch on privatization: see their list of Florida stories here.

There are commonly two public arguments made in favor of privatization or outsourcing, and one private motive on top of that (at least for elected officials). The two common arguments in favor of privatization are that a specific function is the core of a private vendor’s competence and outside the competence of government; and that a private vendor can do the same job more cheaply. The private motive is that outsourcing public-agency work often provides business to companies who can thank the officials authorizing the outsourcing by campaign donations or other support (which can shade into bribery, kickbacks, or side hirings, as has been alleged in Florida).

As noted in the Joni Jones column, often privatization does not save money for agencies, because to do so, the vendor must reduce the pay of employees (from the pay and benefits of public employees) sufficiently to provide the vendor’s desired profit margin and any additional savings the public agency expected. Earlier this decade, Florida International University tried to outsource its janitors, but when the janitors successfully organized as private employee, the vendor asked for more money to cover the (decent) pay and benefits, and FIU realized it was cheaper to bring the janitors back in as university employees. USF has outsourced staff jobs in some cases in the past decade, most visibly the outsourcing of the bookstore’s management to Barnes and Noble. A blog entry later this month will discuss issues related to university outsourcing more specifically.


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