published Monday, April 12th, 2010

Lawmakers considering privatizing state functions

PDF: SB 321: Public-Private Partnerships for Water Supply

PDF: SR 822: Retail Development at Rest Stops

PDF: HB 1200: School Soliciting for Donations

PDF: HB 1310: Brain and Spinal Injury Trust Soliciting for Donations

PDF: HB 1199: Department of Natural Resources Nonprofit

Trends in local privatization

* Public delivery (public employee entirely)

* For-profit privatization

* Intergovernmental contracting

* Non-profit privatization

* Franchises, subsidies and volunteers

Source: International City-County Management Association 2007 survey

By Ashley Speagle

Correspondent

ATLANTA -- Some Georgia lawmakers attempting to fund a $17.7 billion budget for fiscal 2011 without stimulus dollars, maglev millions or Race to the Top rewards now are looking at another source of funding: privatization.

Bills that have passed in at least one chamber this session would allow businesses or private developers to build water reservoirs, operate highway rest areas and support a variety of state programs.

Rep. Martin Scott, R-Rossville, said the state always should look for ways to provide less costly services to residents, including privatization.

"I believe in privatization whenever possible," Rep. Scott said. "Because of lack of competition, the government doesn't always provide the best service."

The benefits of privatization may include saving money, better and quicker service and innovative solutions, according to the Reason Foundation, a nonprofit free market advocate.

But privatization doesn't guarantee such benefits, according a study by to the International City-County Management Association. Before the recession, about 22 percent of local governments said they quit privatizing some operations because of poor quality and expensive services, the study showed.

Lawmakers privatized computer and telephone services in 2008 and last year considered privatizing mental health hospitals in the wake of a federal ruling requiring increased mental health funding.

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PDF: Testimony of Ken Givens, Commissioner

Rep. Wendell Willard, R-Sandy Springs, offered a bill this year to create an Office of Public-Private Partnerships that would push more state services and programs to private funding.

Rep. Willard's hometown is one of five incorporated cities in Georgia that contract many city services to private companies.

The House voted it down, partly on grounds that the state couldn't finance the office itself. No Northwest Georgia representative voted for the bill.

Other privatizing options still under consideration include:

* Allowing private companies to partner with public entities to expand water reservoirs or build new ones. Senate Bill 321 could help the state address growing water needs as the population grows and the state faces losing full access to Lake Lanier, but some legislators are worried about private ownership of water resources. The bill has passed the Senate and awaits House action.

* Allowing businesses to operate highway rest stops and bring in retail developments. Senate Resolution 822 would urge the Department of Transportation to ask the Federal Highway Administration for such authority. At least two rest stops closed since last year on Interstate 85 to save $300,000 each, according to The Associated Press. The resolution has passed the Senate and awaits House action.

* Three House bills would allow certain state programs to raise funds, including federal and private money. HB 1200 would let school boards ask for funds for field trips, HB 1310 would let the Brain and Spinal Injury Trust Commission go after grants and donations and HB 1199 would let the Department of Natural Resource create a nonprofit to support its educational programs. The department also could seek corporate sponsors to fund parks and events, according to several media outlets. The bills are awaiting Senate action.

Rep. Scott said he does see a line where privatization can go too far, but he generally supports it.

"There are some things I don't think you could ever privatize, like public safety," Rep. Scott said. "But to me it's a natural law of conservation. Why wouldn't you do it if it works better?"

Ashley Speagle covers the Georgia Legislature. Contact her at speagle.ashley@gmail.com.

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