2:40pm

Tue December 24, 2013
State Capitol

Privatization Debate Likely to Resurface in 2014 General Assembly

Credit freedomkentucky.org

Kentucky lawmakers are being asked to consider a new proposal for privatizing certain services or projects.  It is not new to Kentucky state government.  Privatization was used in a significant way to house inmates across the Commonwealth for decades.

  The state cut its tie to privately run prisons earlier this year. The number of inmates housed in prisons has been on the decline.  There were also sexual abuse of inmate allegations and complaints by shift supervisors, allegations denied by the private firm.  Bob Gray worked in state government for a quarter century before going into consulting.  He believes private firms can be key players in the public arena.

“Kentucky, like many states, faces limited public resources and creating a process that would encourage private partners to make investments to help provide public facilities in Kentucky and services would help our tax dollars go farther and create services, facilities that we might not get some other way,” said Gray.

One of the most high profile recent examples of privatization is the large student housing project at the University of Kentucky.   UK Vice President for Facilities Management Bob Wiseman says borrowing to cover high deferred maintenance costs for existing dorms would have meant a long extended process.  The UK administrator says going the private route offered efficiencies of scale, cost, and time.

“I think you always have to look at privatization critically as to why and when you use it and make sure it makes sense and I think that’s what we did.  We were very careful in how we approached the topic and it made sense for residence halls.  Whether it would make sense on other projects, other people will have to determine, but I think we’ll always be cautious on when we use it, but it has advantages in some cases,” explained Wiseman.

A legislative initiative in 2014 could move the privatization discussion further along.  Bob Gray says it follows a Virginia model where state government and private sector representatives sit down to review proposals.

“It would allow private partners to come forward with proposals to provide certain services or facilities and put those proposals on the table and evaluate them through a cost benefit analysis to ensure the public really would benefit from it,” said Gray.

Gray says privatization could help in building rest areas along highways or other facilities for state government, to providing certain social services.