Indiana House Republicans Just Say No To Privatization Review



INDIANAPOLIS – Indiana House Republicans today decided that there was no need to have a comprehensive review of the effectiveness of the state of Indiana’s efforts at privatizing numerous taxpayer services, according to House Democratic Leader Scott Pelath from Michigan City.

By a party-line vote, the House majority rejected Pelath’s proposal to conduct a cost-savings review of all state contracts that involved privatization of services over the past decade and make sure that a similar study is a part of all deals made in the future. The Democratic leader attempted to include the study in Senate Bill 394.

“This proposal would have given the people of Indiana the first real chance to see just how effective we have been since our state decided that privatizing taxpayer-funded services was the wave of the future,” Pelath said.

“There has been ample evidence to suggest that the people of Indiana have suffered more than benefitted from this ill-conceived venture, but a thorough examination certainly is in order to gauge what has taken place to this point.”

The state’s most notorious efforts at privatization have been the 75-year lease of the Indiana Toll Road to a foreign investor and the ill-fated decision to have IBM Corp. handle the lion’s share of the state’s welfare services.

“We all know how the IBM affair ended: with a system so broken that even a champion of privatization like former Gov. Mitch Daniels had to concede it didn’t work,” Pelath noted. “Now the state and IBM are stuck in court, and the real losers in the deal are Indiana taxpayers, who are being forced to foot the bill for an ever-increasing amount of legal fees resulting from this mess.”

While the toll road lease has many more years to run, the chunk of cash the state received in the deal already has run out, and the list of state and local infrastructure improvements needing to be funded remains lengthy.

“The value of the toll road deal remains in dispute, but there is little argument that the IBM contract was a complete disaster,” Pelath said.

“However, the push to privatize remains alive in Indiana,” he continued. “Make no mistake: there is an ongoing program to place more and more public services into the hands of private interests. All the risks that we have seen still remain, but there continues to be little interest from the leaders of our state’s government in taking a comprehensive look at what has been wrought.”

Pelath’s proposal would have provided that look by examining the benefits of the privatization contracts that have been put in place, and ensuring that similar studies take place on privatization deals into the future.

“Since we are talking about hundreds of millions of taxpayer dollars at stake here, I believe we need to be more vigilant in making sure that the public’s interests are protected,” he said. “Transparency and accountability should be our primary concern, and I am disappointed those sentiments are not being shared by those in charge of our state right now.”


  1. There are some things in which I agree with on the subject matter of privatization of services, but my biggest concern is the privatization of our prisons here in Indiana. We should not have prisons-for-profit. That creates an incentive for there to be prisoners and an actual “need” for them.

    The lease with these privately run State prison’s have built-in guarantees to be at a 90% capacity at ALL times. These guarantees in no way breakdown to guarantees of keeping society safe.

    These same prison industries that are benefactors of the prison privatization, have (incidentally?) lobbied for tougher drug laws (like on marijuana) and seemingly ONLY donate to Republican candidates who pretend to be tough on crime.

    I am not one who plays party politics, I am just calling it as I see it.


    • For profit prisons are shameful and headed up by Republicans. Oh, and privatisation does not always mean more efficient, period. In fact, the FSSA fiasco was a good example and some of Daniels’ cronies made out like bandits.

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