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Senators Urge Caution on Latest Privatization Effort, Rush to Hire Virginia Firm May Cost Taxpayers

Governor Keating's latest push to privatize another function of state government should be approached with caution, according to two state legislators who say there is no evidence that such an "experiment" will save any money.

The Governor and the Oklahoma Department of Transportation are considering privatizing some of the state highway maintenance duties, even though no cost-benefit analysis has been conducted to determine whether such a switch would save the state money. Despite the lack of information, ODOT is already talking to the Virginia-based firm VMS about a contract in Oklahoma.

That should raise red warning flags, according to Senators Cal Hobson and Trish Weedn.

"If we're privatizing just to privatize, I don't think it's necessarily in the state's best interest, especially if it involves shipping Oklahoma tax dollars off to Virginia or some other state. I don't want to fire a bunch of good state employees just so we can add to the profits of an out-of-state company that may or may not save us any money," said Senator Hobson.

"It looks like they've already picked someone without first bothering to find out whether they can do the job more efficiently than our state employees. It's like agreeing to switch your long distance telephone service without first asking how much your new service is going to cost. That's crazy," said Senator Weedn.

Before Oklahoma hands over millions of dollars to an out-of-state company, the lawmakers want the Governor, ODOT and the Legislature to explore other alternatives, such as the increased use of inmate labor or private non-profit organizations to supplement state highway maintenance workers. Currently, 74 inmate crews, 12 Sheltered Workshop crews and 1,011
Adopt-a-Highway groups assist in litter pick up.

"If we're having trouble with roadside litter, why don't we beef up the inmate or volunteer crews who are assisting our maintenance people? I'd rather use free labor to assist state highway workers than hand a multi-million dollar contract to a company on the East Coast," said Senator Weedn.

"Everyone wants clean highways, but leaping to the conclusion that the only way to have them is to hire an out-of-state company is ludicrous. Let's do some homework, examine all our alternatives and see what's best
for the state. This is something the Legislature needs to look at before it gets too far down the road," said Senator Hobson

The two legislators pointed out that attempts to privatize road maintenance in other states have produced a spotty track record. For example, the jury is still out on such an experiment in Virginia where the state has contracted with VMS, the same company to which Oklahoma is now talking.

The Virginia state transportation department originally predicted millions of dollars in savings, but a follow-up report by the investigative arm of the Virginia General Assembly indicated there was no evidence to back up the projections. State officials have also cited problems with emergency response times, landscape work and communication.

Transportation officials in Oklahoma have even said privately that they doubt the maintenance experiment will work here.

"That's not exactly a ringing endorsement of privatization. If the experience of other states has taught us anything, it's that what may look appealing on the surface is often fraught with pitfalls. I'm not anxious to follow the lead of other states that are having problems with the same type of privatization, especially if it takes money out of Oklahoma," said Senator Hobson.

During the Keating administration, ODOT has relied on out-of-state companies for several high profile contracts. For example, ODOT hired the Virginia-based ICF Kaiser to oversee the $1 billion road construction program, paying it an $11 million fee.

"Governor Keating and his people seem to have an affinity for Virginia. Maybe they think companies there can do things Oklahoma firms or employees cannot, but I'm not convinced of that. I just think we're losing a lot of opportunities by shipping our tax dollars out of state. If that money had been spent in Oklahoma, it would have an enormous economic impact," said Senator Hobson.

Contact info
Senate Communications Division - (405) 521-5605