VOL. 130 | NO. 172 | Thursday, September 3, 2015
View From the Hill
Is State’s Role to Provide a Service or Turn a Profit?
SAM STOCKARD | Nashville Correspondent
Tennessee Gov. Bill Haslam appears to be on the brink of privatizing state government. But he won’t be able to do it without a battle, especially from university unions and Democratic lawmakers.
“We’re going to fight it as strongly as we can,” says Michael Principe, United Campus Workers vice president at Middle Tennessee State University and a philosophy professor.
At the governor’s direction, the state Department of General Services recently took requests for information from vendors to manage all state property not already under contract, including the University of Tennessee system and Tennessee Board of Regents.
State prisons, National Guard facilities and other sites could be part of the proposal, as well. The state will study the RFI (requests for information) and decide whether to post a request for proposals.
Tennessee is a year and a half further along in the process for “public-private” partnerships at state parks in which companies would run restaurants, inns, marinas, golf courses and conference centers.
“Privatization isn’t necessarily how we’re looking at it (but) because it made sense. It’s what the National Park Service does,” says Kelly Brockman, spokeswoman for the Tennessee Department of Economic and Community Development.
While state parks are integral to the Tennessee experience, Haslam doesn’t consider golf courses and marinas part of the core of state government.
Don’t tell that to the folks who play state park golf courses such as Pickwick, Henry Horton, Tims Ford and Harrison Bay, some of the finest and most affordable 18-hole layouts in Tennessee. The state’s golf courses, of course, have come under fire over the last few years for not turning a profit or not turning a big enough profit.
Yet, the question must be asked: Are they designed to solve the state’s financial problems?
Considering they’re located primarily in out-of-the-way places such as Tims Ford in southern Middle Tennessee (go through Tullahoma and take a left), they aren’t exactly like municipal-owned courses in Nashville and Murfreesboro, which often are surrounded by hundreds of thousands of residents. People aren’t sneaking out to play nine holes there on a Thursday after work in Metro.
That begs the larger question: What is the role of government? Is it to turn a profit or provide a service?
Haslam, the former mayor of Knoxville and a principal in the family’s Pilot Flying J, a massive travel center company with stops across the United States and Canada, clearly thinks the private sector should have a bigger hand in government, though he notes no final decision is made on this latest round of outsourcing.
Under his leadership, a $1 million contract in 2013 for Jones Lang Lasalle to assess the condition of state buildings transformed into a multimillion-dollar contract to outsource state office building operations statewide.
“We feel like it’s our obligation to make certain we’re providing the very best service at the lowest cost. But we haven’t made any decision on if we’re definitely going to do this piece or that,” Haslam says. “We just think we owe it to people to run it the best way we can.”
State parks are a “wonderful asset,” Haslam asserts, but they are “fairly costly,” and he wants to know if they can be run more efficiently and attract more visitors.
More golf rounds means more money. But too often, private enterprise means raising fees, cutting expenses and skimping on quality. Next thing you know, the experts can’t run a golf course and the places shut down.
As for higher education, Haslam says state officials will “sit down” with each system, the University of Tennessee and Board of Regents, to decide if outsourcing “makes sense.”
“This is not something the state is coming from above and saying you have to do this,” the governor says. “That being said, there’s a huge pressure on everything from keeping tuition costs minimal to expanding the population that we serve.”
One of the Haslam’s main initiatives is the Drive to 55, a goal for 55 percent of Tennesseans to hold a degree or certificate in higher education by 2025.
“What we’re saying is the answer can’t always just be more money, more money, more money from the state,” he points out.
Apparently reluctant to take a strong stance, Board of Regents and University of Tennessee officials say they’re already finding ways to save money. Still, they’re leaving the door open to outsourcing.
Tennessee Board of Regents Chancellor John Morgan has issued a statement calling the request for information an “early step” in identifying cost savings. His understanding, he says, is that TBR’s participation would be based on whether its institutions think a state contract for services would be “advantageous.”
“Our institutions are very diverse in terms of mission, geography, organization and current cost structure. Our facilities are varied and include academic and office space, student activity and living space and athletic facilities,” he states.
Institutions such as MTSU, Austin Peay, Tennessee Tech, junior colleges and colleges of applied technology would need to “carefully assess” their circumstances before agreeing to an outsourcing contract, he says.
Morgan notes he would be “surprised” and “disappointed” if savings came primarily from lower pay and benefits for workers.
“If, however, substantial savings due to operational efficiencies could be redirected to activities that would enhance student success, then careful consideration of those opportunities would be appropriate,” he adds.
TBR campuses reported more than $15 million in savings over recent years, Morgan says, and more cost cutting is planned. The chancellor say he hopes any facilities management plan supports the governor’s Drive to 55 goals.
In mid-August, University of Tennessee President Joe DiPietro sent faculty and staff a letter stating he understands UT has the option not to take steps that aren’t “workable or don’t achieve long-term savings.” The system began reviewing its business model a year ago to improve efficiency.
“We will consider potential measures of a state of Tennessee facilities management initiative on a case-by-case basis in determining whether such measures are advantageous to our campuses and their missions and goals,” DiPietro states.
State Sen. Mark Norris, a Collierville Republican, says he didn’t know the request for information was posted until the Memphis Commercial Appeal published an article about it. But he’s not opposed to taking a look at outsourcing.
“The challenge comes with implementation, if any,” Norris explains, noting he wants the Haslam administration to tell the Legislature what it is “thinking” and whether it is “warranted.”
“They may come up with some good ideas,” he points out.
Democrats aren’t quite as understanding.
Noting the request for information involves “a pretty expansive range,” state Rep. John Ray Clemmons says, “I completely disagree with their efforts to privatize the state and sell the state to the lowest bidder.
“The chief threat posed by privatization is the profits and interest of the stock holders are made a higher priority than the interests of taxpaying citizens. Quality, safety, accountability all go out the window when you privatize basic state services like they’re looking to do.”
Legislators are working already to be “responsible stewards” of taxpayers’ money, and Clemmons, a Nashville Democrat, says “selling off the state to private entities” is not the way to do it.
“The governor’s failed to identify a problem that he’s trying to solve here. They don’t even know if this grand privatization scheme is going to save the state any money,” Clemmons explains.
“But what we do know is that our National Guardsmen’s safety will be compromised, and all the services at our state parks, state colleges and universities, hospitals will be compromised in favor of higher profit margins.”
For obvious reasons, United Campus Workers are adamantly opposed to outsourcing. Their jobs are in jeopardy, along with the economic health of campus communities, they say.
“The possibilities of the proposals are extremely broad. It’s going to eventually affect a whole lot of working people in Tennessee,” Principe says.
The “dizzying scope” of the proposal threatens public services and tens of thousands of jobs statewide, according to the union. It points toward the outsourcing “fiasco” two years ago, saying Jones Lang Lasalle’s contract grew to $10.7 million as it “profited from its own recommendations, fleecing taxpayers until a scathing audit revealed the scheme and the legislature intervened.”
It notes the governor was “personally invested” in the company.
The union contends this latest privatization move to reduce operating costs will most likely cut personnel, pay and benefits.
“The RFI’s scope includes every person, and every job, for every building everywhere,” states Tom Anderson, a purchaser in UT’s Facilities Department.
Maintenance, purchasing, utilities, human resources, security and cleaning, in addition to administrative work in schools, courtrooms and services agencies would be affected, he points out, noting a custodial contract at UT-Knoxville proved a failure and was terminated.
This outsourcing proposal holds the potential to turn into a philosophical struggle at the legislative level.
Haslam and the Republican-dominated Legislature will want to cut costs, no doubt. But they’ll be doing so by eliminating tens of thousands of jobs across Tennessee, from National Guard sites to state parks and colleges and universities.
And while it’s certainly not state government’s job to provide people with employment and benefits, those employees do have value. They have children and they hold mortgages and car notes. Putting them in the unemployment line in an overzealous attempt to find efficiency could prove disastrous.
Sam Stockard can be reached at email@example.com.