David Schultz: The costs of privatization: It may not save the state money

Gov. Mark Dayton and the Republican Legislature face a $6.2 billion deficit and a legal mandate to produce a balanced budget. They differ on how to address this task. One thing is certain: Some will argue that a solution is the privatization of state functions or services. For those who think privatization yields immediate savings, that is not necessarily correct. Privatization also forces critical tradeoffs in equity, service delivery to the poor, and perhaps in public safety, quality and accountability.

Privatization has multiple meanings. One definition is the selling off of state-owned enterprises that can make money as private businesses. This is what privatization generally has meant outside the United States, especially in former communist countries, where government enterprises such as utilities are sold to investors. Minnesota does not have these types of enterprises to sell.

Perhaps Minnesota could sell its prisons to be run privately, or maybe some transportation functions. Selling off prisons means a loss of control over them and the possibility of worker strikes. Privatizing snow plowing might save some money, but coordinating a massive fleet of private vendors to plow the roads is a costly logistical issue.

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