Eager for quick cash, state and local governments across America have for decades handed over control of critical public services and assets to corporations that promise to handle them better, faster and cheaper. Unfortunately for taxpayers, not only has outsourcing these services failed to keep this promise, but too often it undermines transparency, accountability, shared prosperity and competition – the underpinnings of democracy itself. As state legislatures soon reconvene, policy makers likely will consider more outsourcing proposals. Out of Control: The Coast-to-Coast Failures of Outsourcing Public Services to For-Profit Corporations serves as a cautionary tale for lawmakers and taxpayers alike.
Too often, outsourcing means taxpayers have very little say over how tax dollars are spent and no say on actions taken by private companies that control our public services. Outsourcing means taxpayers cannot vote out executives who make decisions that hurt public health and safety. Outsourcing means taxpayers are contractually stuck with a monopoly run by a single corporation – and those contracts often last decades. And outsourcing too often means a race to the bottom for the local economy, as wages and benefits fall while corporate profits rise.
This report highlights the failed experiences of cities and states across the country that recently experimented with outsourcing in a variety of sectors. Organized by failures in transparency, accountability, shared prosperity and competition, these stories will show how hastily and ill-conceived outsourcing deals fail to protect taxpayers and the public interest.
The last section provides recommendations of responsible contracting practices, including implementation of ITPI’s Taxpayer Empowerment Agenda, which can mitigate the risks of outsourcing and ensure that public dollars are not blindly funneled into corporate coffers, but used to further a communities best interest.