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Report Critical of Corbett "Outsourcing" in Pennsylvania

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Monday, October 20, 2014   

HARRISBURG, Pa. - Shrinking government has meant shifting responsibilities to private industry in some states, and Gov. Tom Corbett is one of seven governors taken to task in a new report that correlates these outsourcing decisions with major campaign donors and mixed results for taxpayers.

In Corbett's case, the Center for Media and Democracy cited what it calls "frequent outsourcing" of legal business to private law firms and the push to privatize state liquor sales.

Economist Steve Herzenberg, executive director of the Keystone Research Center, said a large body of nonpartisan academic research backs the report's conclusion - that transparency is lost when services are performed by private industry.

"Any time when you have questions, legitimate questions, about public service delivery - and it's public - it's relatively easy to take the lid off, to look inside, to figure out what's going on," he said. "It's harder when you've got to pierce the veil of the private contractor."

The governors in the seven states mentioned in the report all are Republicans, but Herzenberg pointed out that Democratic governors aren't immune. He cited questions raised about the appropriateness of former Gov. Ed Rendell outsourcing some state information-technology functions to campaign donor Deloitte during his administration.

In Pennsylvania, the Keystone Research Center has studied the effects of privatization on nursing homes and on water and sewer services. Overall, Herzenberg said, the focus of shifting services should be on whether citizens are getting a good deal - and by that measure, he said, the research is clear.

"These asset sales tend to be shortsighted, in the sense that you get some money up front," he said, "but in the end, citizens pay more, much more than they would if the asset had remained public."

The report said some experts estimate $1 trillion of the $6 trillion of government spending in the United States each year is spent on private contractors.

The report is online at sourcewatch.org.


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