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Auditor's Report Proves Claims: No Money Saved in Texas Privatization Scheme
A state auditor's report shows that Texas hasn't saved any money at all in the privatization experiment that began a year ago when the Health and Human Services Commission put a corporation in charge of its human resource and payroll services.
The October report is a powerful weapon for state workers in Texas represented by CWA who are fighting off an attempt to privatize the state's social services eligibility system - replacing walk-in centers easily accessed by the poor with call centers that would do business by phone and mail.
"It's common in the labor movement to talk about losing jobs when you talk about privatization," said Mike Gross, vice president of Local 6186, the Texas State Employees Union-CWA. "But just as important is the question of what is the quality of services to the people of Texas?"
The attempt to privatize services in Texas, other states and the federal government is yet another way anti-worker lawmakers are hoping to curtail employee rights under the guise of saving money, union leaders say. Fighting such schemes and ensuring that workers have a strong voice on the job is the focus of events CWA is planning for Dec. 10, International Human Rights Day.
For state employees in Texas, Local 6186 President Judy Lugo says privatization - aside from saving no money - has led to chaos in personnel record-keeping. If it's extended to food stamp, welfare, Medicaid and other federally funded social services, she said it will mean fewer people, including children, will get help: Instead of walking into a center and talking to someone face-to-face, in English or Spanish, applicants will have to find a phone, compile and mail a stack of documents and have an address where correspondence and aid could be sent.
If the audit and the strong editorials it has prompted from state newspapers fail to persuade state lawmakers, Congress may deal its own blow soon. Urged by CWA and other unions, Sen. Tom Harkin (D-Iowa) successfully attached an amendment to the pending $100 billion agriculture bill that would bar most food stamp privatization in all states. The amendment is not in the House version of the bill but CWA leaders and members are pushing representatives to include it when the legislation comes before a conference committee.
To build support for the amendment among critical House members, CWA's legislative office coordinated with CWA Local 7219 President Chet Nettlestad and the union's political coordinator in Minnesota, Jim Meyer. They persuaded Representatives Collin Peterson (D-Minn.), ranking members of the House Agriculture Committee, and Joe Baca (D-Calif.), ranking member of the agriculture subcommittee that handles food stamps, to take a stand for the amendment. The two sent a letter to Rep. Henry Bonilla (R-Texas), who chairs the subcommittee on agriculture of the House Appropriations Committee, stating: "Public administration of the food stamp program is effectively serving those in need as a result of recent disasters, proving that the program is well served in public hands," the letter stated.
Lugo said her members are writing and calling Bonilla's office as well, and also calling state legislators, urging them to put pressure on Bonilla.
The Texas audit found that Convergys, the private company that took over certain personnel services at HHS, has to date saved none of the $21.7 million the commission said would be saved within five years.
The auditor criticized HHS for "significant errors and omissions" in its assumptions about how much it would cost a private company to do the government's work. The audit also revealed that Convergys wasn't the company identified as the "best value" in the bidding process, yet for reasons not explained it won the contract.
The audit's findings came as no surprise to TSEU leaders. "We sounded the alarm early," Gross said "We knew it couldn't possibly be a good idea to privatize, and not only is it not saving money, it's led to a radical degradation of HR services."
The October report is a powerful weapon for state workers in Texas represented by CWA who are fighting off an attempt to privatize the state's social services eligibility system - replacing walk-in centers easily accessed by the poor with call centers that would do business by phone and mail.
"It's common in the labor movement to talk about losing jobs when you talk about privatization," said Mike Gross, vice president of Local 6186, the Texas State Employees Union-CWA. "But just as important is the question of what is the quality of services to the people of Texas?"
The attempt to privatize services in Texas, other states and the federal government is yet another way anti-worker lawmakers are hoping to curtail employee rights under the guise of saving money, union leaders say. Fighting such schemes and ensuring that workers have a strong voice on the job is the focus of events CWA is planning for Dec. 10, International Human Rights Day.
For state employees in Texas, Local 6186 President Judy Lugo says privatization - aside from saving no money - has led to chaos in personnel record-keeping. If it's extended to food stamp, welfare, Medicaid and other federally funded social services, she said it will mean fewer people, including children, will get help: Instead of walking into a center and talking to someone face-to-face, in English or Spanish, applicants will have to find a phone, compile and mail a stack of documents and have an address where correspondence and aid could be sent.
If the audit and the strong editorials it has prompted from state newspapers fail to persuade state lawmakers, Congress may deal its own blow soon. Urged by CWA and other unions, Sen. Tom Harkin (D-Iowa) successfully attached an amendment to the pending $100 billion agriculture bill that would bar most food stamp privatization in all states. The amendment is not in the House version of the bill but CWA leaders and members are pushing representatives to include it when the legislation comes before a conference committee.
To build support for the amendment among critical House members, CWA's legislative office coordinated with CWA Local 7219 President Chet Nettlestad and the union's political coordinator in Minnesota, Jim Meyer. They persuaded Representatives Collin Peterson (D-Minn.), ranking members of the House Agriculture Committee, and Joe Baca (D-Calif.), ranking member of the agriculture subcommittee that handles food stamps, to take a stand for the amendment. The two sent a letter to Rep. Henry Bonilla (R-Texas), who chairs the subcommittee on agriculture of the House Appropriations Committee, stating: "Public administration of the food stamp program is effectively serving those in need as a result of recent disasters, proving that the program is well served in public hands," the letter stated.
Lugo said her members are writing and calling Bonilla's office as well, and also calling state legislators, urging them to put pressure on Bonilla.
The Texas audit found that Convergys, the private company that took over certain personnel services at HHS, has to date saved none of the $21.7 million the commission said would be saved within five years.
The auditor criticized HHS for "significant errors and omissions" in its assumptions about how much it would cost a private company to do the government's work. The audit also revealed that Convergys wasn't the company identified as the "best value" in the bidding process, yet for reasons not explained it won the contract.
The audit's findings came as no surprise to TSEU leaders. "We sounded the alarm early," Gross said "We knew it couldn't possibly be a good idea to privatize, and not only is it not saving money, it's led to a radical degradation of HR services."