There is a good editorial in today’s Fort Wayne Journal Gazette entitled Leaner state government? which first questions whether Gov. Daniels has made the government any leaner at all. It notes that
Niki Kelly’s Sunday story showed that the Daniels administration has created multiple new departments, including a Division of Aviation, an Office of Federal Grants and Procurement and a Division of Government Efficiency and Financial Planning. Salaries for administrators of the newly created agencies fall just short of $1 million, not including employee and office costs.
But, the editorial concedes, changes to the bureaucratic structure may create savings that offset the cost new positions and agencies. Or, it could mean that we’ve just shifted where we spend the money. In any event, the editorial allows that it’s Gov. Daniels prerogative to make these kinds of changes.
The editorial also urges that privatization of government services, for which the Governor has shown an abiding love, should not be confused with savings. My favorite example of how insourcing government services saved the government money is here.
Furthermore, the Governor’s big privatization contracts are, by and large, going to out of state vendors. The editorial notes a billion dollar FSSA contract that will likely go to an out of state vendor. And, let’s keep in mind, not all state money spent is equal. First, there is the question of service per dollar spent. Will our level of services remain the same? (Should it?) Then there is the fact that where currently, the money is being kept in state, to be respent in state by the workers employed by the State, under privatized contracts, the workers will likely work for substantially reduced pay and benefits, meaning they have less to spend in their communities. In fact, we’ve seen that Wal-Marts and other low wage & benefit paying companies tend to put a substantial burden on the public health system (link chosen at random – Google ‘Walmart employee medicaid’ for more) since their workers often need to be on Medicaid and the like. Meanwhile, the cream of the contracts will go to out of state executives and their shareholders. How much of that is likely to be respent in Indiana?
Update Taking Down Words has a post on the subject.
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