Democrats decry onward march of privatization

INDIANAPOLIS | State Democrats, including one local legislator, expressed concern Thursday over Gov. Mitch Daniels' plan to privatize the administration of state welfare programs and health care services for the poor and elderly.

This effort entered the final stage this week, with the Indiana Family and Social Services Administration asking private firms to submit proposals for what could be a 10-year contract worth more than $1 billion.

State officials say the winning bidder would create faster, more accurate electronic systems for processing applications for food stamps and Temporary Assistance for Needy Families, the formal name for welfare. The contract also would cover myriad Medicaid programs that provide health care for low-income children, the chronically ill and fixed-income seniors.

"We're doing this because we're terrible at eligibility intake," Family and Social Services Administration Secretary Mitch Roob said Thursday. "We have very dedicated workers, but we deal in a very antiquated system."

Democrats have opposed every effort to privatize state services, including last year's reorganization of unemployment services and, more prominently, Daniels' current push to lease out the Indiana Toll Road and use the profits to prop up Major Moves, his statewide road construction plan.

"It appears to be the motus operandi of this administration to try to run state government like the corporate world and here's another example," state Rep. Charlie Brown, D-Gary, said.

"The Major Moves is one and now this -- to say that the people who are the neediest, we want to turn that over to a private concern that will, naturally, want to make a profit on the backs of the folks that are in the greatest need for social services from the state."

Unlike the Toll Road lease, the social services administration contract does not require input from the General Assembly. Neither effort was put before a public hearing, though, Roob insists that his agency sought a wealth of public input.

The Senate, meanwhile was expected to consider legislation Thursday night that would allow the state to privatize Indiana Bureau of Motor Vehicles branches. It's unclear if that measure has the governor's support.

"The biggest concerns are the jobs Hoosiers are losing," said House Minority Leader Patrick Bauer, D-South Bend.

But Roob said bringing in a private firm to overhaul the administration of social services won't result in pink slips for the 2,300 state employees now doing the work. Most will be able to take a job with the private firm at the same pay and similar benefits, he said. About 700 employees could move to the state's child welfare division and any remaining displaced workers will be offered jobs elsewhere in state government, Roob said.

And a private company will not decide whether a single mom qualifies for food stamps or if the state will pay for an aging Hoosier's nursing home stay, Roob said. The firm merely will modernize the paper trail.

"At a conceptual level, we are captive of a really antiquated system," he said.

"Our employees are captive of that system, and the people we're trying to help are captive of our system. That's why we're doing this."

Today, it takes about a month for the state to process an application for most of these services, Roob said. The goal is to cut the wait time to about a week.

Firms must submit their privatization proposals to the state by March 15. The losing bidders will not be made public until after the state signs a contract with the winner, likely sometime this summer.

Roob said that stipulation reflects the typical process for outsourcing state services.