Commonwealth Competition Council - State Panel Highlights Privatization Prospects

State Panel Highlights Privatization Prospects

Findings Forwarded for Budget Debate

By Jeff E. Schapiro

Gypsy-moth trapping, computer repairs, textbook sales and bookkeeping are among more than a dozen government services that a state panel yesterday recommended be surrendered to private business.

The Commonwealth Competition Council, created by the state to identify prospects for privatization, relayed its findings to Governor George Allen and lawmakers for possible inclusion in the next budget.

Allen, a Republican who leaves office in January, has made privatization a hallmark of his term. Already, the state has hired contractors to manage prisons, run college bookstores and cafeterias, and maintain highways.

It's not clear whether privatization has generated major savings. The House Appropriations Committee has said economies may be modest, with the state paying private firms roughly what taxpayers shelled out for services.

The council said gypsy-moth trapping, currently offered by the State Department of Agriculture and Consumer Services, could be privatized at an annual cost of about $250,000 - approximately $200,000 less than Virginia currently spends.

The panel recommended the Paul D. Camp Community College in Franklin turn over its bookstore to the private sector and suggested the Department of Criminal Justice contract for computer maintenance at a savings of $12,000.

Other potential savings: all, or part of, the $2 million that the State Department of Mental Health, Mental Retardation and Substance Abuse Services expects to spend on managing its books.

The council also spotlighted 32 programs that it believes are now best run by the public sector.

The list includes government-supplied employee parking, fire service training, home health service through State Department of Health and a clinical laboratory at the University of Virginia hospital.

The council, in its annual report, said privatization is but one method for controlling the cost of government. The panel also said that the state should take a cue from business.

The report said:

"If the business function or service is not or cannot remain competitive, service shedding is implemented through abolishment, consolidation, outsourcing to other private entities, sale or spin off of the operation."

"As Virginia prepares for the 21st Century, practicality dictates that a similar philosophy must take place to ensure that its government continues to be responsive, well managed and effective in delivering services. "Virginia government must focus its mission on customer service satisfaction and forge a closer relationship with the private sector to take advantage of its strength."

Source: Richmond Times-Dispatch Saturday, September 13, 1997

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