In Louisiana, Privatization Schemes Hit a Snag
By Melissa Maynard, Staff Writer
But as Louisiana's legislative session heads into its final stretch, privatizing has become a major pressure point in the budget debate and the source of a number of headaches for the Jindal administration.
On Monday, a House committee killed the governor's plan to sell three state prisons to the private sector, reports The Times-Picayune of New Orleans. The administration had hoped the sale would bring in about $100 million and save the state $200 million in reduced operating costs over the next 20 years. The administration said that no longer having to maintain the prison buildings, which were constructed in the 1980s, would be an important way to reduce long-term strain on the state budget.
Prison workers and their families aggressively opposed the proposal, which they said would devastate local economies because of lost jobs or dramatic pay cuts they feared would come with private ownership.
Also this week, a Jindal appointee resigned after coming under fire in the legislature for his role in efforts to privatize operations in the Office of Group Benefits, which oversees a state-run health insurance program for state employees and retirees. During a heated confirmation hearing last week, reports the Associated Press , legislators accused Scott Kipper, who was appointed to run the office, of withholding information about his privatization strategy.
The Jindal administration argues that the state-run health insurance plan could be managed more effectively by a private company, and that this would generate $10 million in annual savings in addition to an approximately $150 million up-front payment by the winning bidder.