In most states, there are numerous opportunities for privatizing state services, assets, infrastructure, and facilities.

A. ADMINISTRATION AND GENERAL SUPPORT SERVICES

The greatest amount of contracting by state governments to date is of support and administrative services that serve government departments and agencies. The possibilities range from accounting to the removal of trash from state office buildings and facilities. Support services for state agencies may be the easiest functions to contract out because monitoring a contractor's performance is simplified. (see Table 2)

Table 2

SUPPORT SERVICES CONTRACTED TO PRIVATE VENDORS BY DEPARTMENTS OF ADMINISTRATION/ GENERAL SERVICE IN STATE GOVERNMENT

Services Contracted

State Contracting

Accounting

AK

Architectural Service

Most States

Asbestos Removal

CO, ND, ME

Auditing

CO, AK, ND, WI

Building Construction

CA, CO, IL, OH, ND, UT, WI

Building Inspections

CO, IL, WI

Building Maintenance

TN

Central Drug Warehouse

MI

Claims Examination

WI

Computer Maintenance

CO, ND, UT

Computer Systems Design

CO, ME, MT

Custodial Services

AK, CA, CO, ID, LA, ME, MT, NE, NC, ND, OK, PA, UT, WI

Data Processing

Most States

Day Care for State Employees

ME, ND

Elevator Maintenance

CO, SC, LA

Employee Benefits Administration

CO, WI

Energy Weatherization

CO, IL, WI

Engineering Services

CA

Facility Management

CO, OH, ME, TN

Keypunch

CO, WI

Mail Room

CO, WI

Pest Control

CO, NE, ND

Planning

CA

Printing

CA, CO, IL, MT, SD, ND

Security

CA, CO, CT, ID, LA, TN, WV

Snow Removal

CO, SD, ND

State Museum

SC

Technical Consulting

CO, FL, MI

Telecommunications

CO, ME, ND, WV, WI

Trash Removal

CO, LA, NE, ND

Source: Privatization for New York: Competing for a Better Future, New York State Senate Advisory Commission of Privatization, 1992.

Among the best opportunities for privatization of general services are contracting out computer maintenance, and the design and operations of information systems. The information technology of many state governments is antiquated, and personnel in these divisions are often not as highly skilled as those performing similar functions in the private sector. Contracting out these functions to the private sector allows state governments to provide enhanced services to government agencies and to make use of state-of-the-art computer equipment and systems without raising taxes.

Another option is privatizing state printing operations. Private printers capable of satisfying state printing needs exist in every state. Competition for state business from private providers can lower printing costs. A 1985 study, for instance, found that private printing costs were, on average, 33 percent lower than for state printing.[20] States would also receive one-time windfalls from the sale of printing capital equipment and facilities. Numerous states already contract out for printing, including Colorado, Idaho, and Tennessee.

SALE OF SURPLUS PROPERTY

In most states, the general services or administration departments also manage the majority of state property. Many of these holdings earn no or little revenue and are greatly underutilized by state governments. Surplus and underutilized holdings of assets, land, buildings, and former state institutions could be sold or leased to the private sector, thereby generating significant revenues and providing a steady stream of property and business tax revenue. Options for sale, lease, or sale-leaseback include: maintenance facilities; parking garages; office facilities; undeveloped land; and recreational facilities.

In order to facilitate the sale or lease of selected state land and facilities, states can set up pro-active asset management councils. The asset management councils would be charged with maintaining a detailed inventory of all state assets. California has created pro-active asset management programs in both the state general services and transportation departments.

Moreover, an executive order by Governor Wilson in 1991 created a state Asset Management Council charged with better integrating the capital expansion and asset management programs of various state agencies. Massachusetts also created an Asset Management Board in 1991 to promote the identification of underutilized state-owned assets.

Based on asset appraisals done of cities and universities by several consulting firms, states could realize hundreds of millions or even billions of dollars by disposing of as little as 5 percent to 10 percent of state properties and assets, excluding state parks.[21]