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privatization

The thing you need to know about the guy behind the “three million illegal votes” claim

He’s a known liar and grifter.

When President-elect Donald Trump tweeted Sunday — without evidence — that “millions” of people voted illegally in the race for the White House, he invited a wrath of condemnation for again stoking doubts about the U.S. election system.

But in Texas, he found at least one fan: Gregg Phillips, a former Health and Human Services Commission executive who appears to be the source of the unsubstantiated claim. In the days following the election, the self-styled voter integrity activist said on Twitter that he has discovered that more than 3 million people who voted were not citizens — a claim which was later highlighted by InfoWars, a conspiracy theory website run by fellow Texan and Trump ally Alex Jones.

Phillips, who described himself on social media as founder of VoteStand, an election fraud reporting app, has declined to provide proof to the media, saying he will instead “release all methodologies, data and analysis directly to the public.” He does not appear to have given any indication when that will happen, and efforts to reach him early Monday were unsuccessful.

While Phillips is re-emerging in the news following Trump’s tweet Sunday, Texans may be more familiar with his tenure as an executive deputy commissioner at the state’s Health and Human Services Commission. According to his LinkedIn profile, he held the position from March 2003 to August 2004, playing a big role in shaping the 2003 bill to privatize large parts of the state’s social safety net.

By 2005, Phillips was beset with allegations of cronyism stemming from contracts signed at both HHSC as well as the Texas Workforce Commission. At the time, a Houston Chronicle investigation found he helped craft the privatization legislation in a way in which he personally profited along with a private consultant.

After leaving HHSC, Phillips went on to run AutoGov, a health care analytics firm where he still works. In 2015, AutoGov was mentioned in reports questioning the state’s $20 million Medicaid fraud tracking software deal with Austin-based 21CT, which was not competitively bid. Jack Stick, the former top HHSC lawyer at the center of the scandal that led to a string of resignations and prompted multiple investigations, briefly worked for AutoGov.

Politifact has already debunked this, not that fact-checking has any meaning anymore. What I want to do here is give you a bit more information about Gregg Phillips, the main character of this story, as he has been mentioned a few times on thi blog in the past. The Trib story does a pretty good job of introducing him and his self-enriching character, so consider this to be some extra reading:

What they didn’t tell you
Let me be your sweetheart dealmaker
Chron investigates Gregg Phillips
Making money on both ends

There are more posts in my archives if you want to search for Gregg Phillips, but you get the idea. Forget about professional fact-checking sites and just ask yourself, is this the kind of person who is basically honest in his words and deeds, or is he not? Let that inform how you perceive anything else he has to say, and anything that others say based on what he said. The Chron has more.

Why that empty private toll road has been so empty

Someone did a study to try to answer that question.

Speed Limit 85

In the Austin area, more than 220,000 vehicles travel on I-35 on a daily basis. In contrast, SH 130, the tolled bypass around Austin only carries 40,000 vehicles daily. Why do more vehicles choose the I-35 route? What would make travelers, particularly big trucks, more likely to use SH 130?

Associate Research Scientist Tina Geiselbrecht at TTI’s Transportation Policy Research Center recently published a report titled Incentives for Truck Use of SH 130 aimed at understanding the trucking industry’s use of toll roads and the possibility of diverting large trucks to SH 130. Researchers conducted a traffic analysis and found only 14 percent of I-35 traffic volume is vehicles traveling through the region without stopping, and of that volume, only 1 percent are trucks. The other 86 percent of vehicles are local I-35 travelers.

The traffic data analysis shows, overall, SH 130 carries very few trucks. To better understand how to increase truck traffic on SH 130, Geiselbrecht and her team studied incentives for truck use of toll road SH 130.

Geiselbrecht and her team interviewed trucking industry leaders to get their thoughts on the following potential incentives:

  • higher speed limits on SH 130;
  • the presence of nearby amenities and associated facilities;
  • the provision of speed and travel times for alternate routes;
  • use of long combination vehicles (LCVs); and,
  • toll discounts.

The findings suggest many of these potential incentives would not cause a shift to SH 130. Because some operators say it’s not safe to operate large vehicles at high speeds and speed tends to increase the cost of a trip in terms of fuel consumption, higher speed limits are not an effective incentive. Providing travel time information near access points to SH 130 doesn’t motivate truck drivers to use toll roads either because interviews with industry professionals found they already use internal systems that show them travel times and alternate routes.

One potential incentive did arise from the interviews; the allowance of Long Combination Vehicles (LCVs). LCVs allow companies to transport more product on a trip, thereby offsetting some of the toll costs making it a feasible alternative.

“This study supports short- and long-term mobility policy and planning strategies on how to move freight more efficiently in and through Texas. Although diverting truck traffic to uncongested toll roads is positive, the literature, traffic data and interviews revealed the trucking industry is reluctant to use tolled facilities,” Geiselbrecht says. “So it may be a good idea to also think about how to get passenger vehicles to divert to SH 130 since they make up the majority vehicle volume on I-35.”

See here for all my prior blogging on this topic. Call me crazy, but I’m thinking this kind of study might have been useful before $1.3 billion got spent on this mess. Just a thought. By the way, not that it has anything to do with anything, but the Main Street light rail line has a higher daily ridership tally than all of SH 130. I don’t have a point to make with that, it just amuses me. Good luck getting some value out of this albatross. Link via Streetsblog.

We don’t want to share marriage with those icky gay people

Ed Kilgore detects a new trend.

Now that the Christian Right has been reduced to the sputtering defiance of Mike Huckabee and Bobby Jindal or to the sullen silence of many others, one can hope that conservative acceptance of same-sex marriage will follow as rapidly as it did for the public as a whole.

But then there’s another possibility, signaled [recently] by Rand Paul in an op-ed at Time:

RedEquality

Perhaps the time has come to examine whether or not governmental recognition of marriage is a good idea, for either party.

Since government has been involved in marriage, they have done what they always do — taxed it, regulated it, and now redefined it. It is hard to argue that government’s involvement in marriage has made it better, a fact also not surprising to those who believe government does little right.

So now, states such as Alabama are beginning to understand this as they begin to get out of the marriage licensing business altogether. Will others follow?….

[T]he questions now before us are: What are those rights? What does government convey along with marriage, and should it do so? Should the government care, or allocate any benefits based on marital status?

And can the government do its main job in the aftermath of this ruling — the protection of liberty, particularly religious liberty and free speech?

We shall see. I will fight to ensure it does both, along with taking part in a discussion on the role of government in our lives.

Well, the idea of “privatizing” marriage carries all sorts of unsavory associations, such as previous efforts to avoid racial discrimination laws via “private clubs” and “segregation academies,” and even to avoid African-American voting rights via “white primaries” understood as private arrangements.

Beyond that, since conservative social policy in this country has become heavily associated with the practice of attaching all sorts of benefits—especially tax deductions and credits—to married couples with or without children, how is that supposed to work if marriage no longer exists as a state-defined status? What are reformicons supposed to do?

I’ve noted this before, though I’m still not sure what to make of it. There’s long been a libertarian argument for “privatizing” marriage, which I also have never quite gotten. I agree with the Cato author that marriage is fundamentally a civil contract. This is, at one level, what the LGBT community has been fighting about, since the act of getting married confers all kinds of rights and privileges on each spouse. There’s also a religious component to marriage – Catholics consider it a sacrament – that one may or may not participate in. If the religious folks want to argue for a complete separation of the two, that’s fine by me as long as that means that the religious-not-civil/”government” marriage no longer confers any of the legal benefits that civil marriage does. Treat it legally like any other domestic partnership and see how they like it.

The possibility that concerns me is that there will be pressure on state legislatures to elevate religious marriage to some higher status than civil marriage, or conversely to deprecate the value of civil marriage. One way or the other, they don’t want to be the same kind of “married” as same-sex couples. Again, I don’t get it, but it seems to me this is something to watch out for. The conservative iconoclast State Rep. David Simpson has called on Greg Abbott to convene a special session to end marriage licensing in Texas. Abbott has already ignored pleas from other social cons to do a special session to re-outlaw same-sex marriage, as if that were possible, and I doubt Simpson’s request will find any more sympathy. You can be sure this will be an issue in next March’s primaries, however. I don’t know what the final form of this mania will look like, but the outlines are clear. The Rivard Report and Newsdesk have more.

More on Sheriff Hickman

A profile of appointed Sheriff Ron Hickman that’s long on biography but short on policy.

Ron Hickman

Hickman is 63 and has spent his entire career doing police work. No step on his path has been sudden or unanticipated. Hickman expressed interest in the sheriff’s job when there were hints of a vacancy, before Garcia had announced his run for mayor. He was the candidate the Harris County Deputies’ Organization endorsed, the first person Commissioners Court members considered.

In terms of gravitas, law enforcement experience and proven political skills, the county chiefs felt, he was unmatched.

But the job ahead is significantly bigger and more bureaucratic than anything Hickman has tackled. During his four elected terms as Precinct 4 constable, he supervised 425 employees and managed a $42 million budget. As sheriff, he will oversee a staff of 4,600 and a budget of $437 million.

An astute measurer of expectations, the Republican lawman understands what the majority Republican Commissioners Court wants to see during his first days in office.

Commissioners, most vocally Precinct 3’s Steve Radack, have articulated an interest in a sheriff who would be willing to relinquish supervision of the jail.

Hickman does not see this as a sacrifice, since the detention portion of the job doesn’t appeal to him. It is not aligned with his skill set, he said, “I am cop at heart.”

Hickman was appointed last week, and about all I know about him is that he’s been a cop for a long time, and Steve Radack really likes him. The headline to this story says that he hopes to “shine a light” at the Sheriff’s office, but the story doesn’t say anything about what that might mean. He’s also open to the idea of handing off jail administration duties to an appointed overseer. That may be a good idea and it may be a bad idea, but it seems to me that it’s a substantial enough idea that it ought not to happen without there being some vigorous public debate about it. In particular, maybe it ought not to happen until someone has gotten himself elected Sheriff on a platform that includes this as a plank. Just a thought.

In the meantime, while it’s nice to know that our new Sheriff likes to hunt and fish and stuff like that, it would also be nice to know what he thinks about things like Secure Communities and the the jail’s nondiscrimination policy and so on. You know, Sheriff stuff. Maybe we could ask if his willingness to cede control of the jail to a separate administrator extends to handing the jail over to a private operator, which is something that’s been on Commissioner Radack’s radar for awhile. Sheriff Hickman’s now-former primary opponent Allen Fletcher has connections to the private prison business, so perhaps that subject will come up in the next few months. Sooner would be better than later, if you ask me.

On driving the empty private toll road

Robert Rivard takes a ride on the lonely private toll road SH 130.

Speed Limit 85

Let me explain: SH 130, completed in October 2012, runs from an intersection just east of Seguin on I-10 to an intersection just north of Georgetown on I-35, allowing north-south traffic to avoid Austin’s congestion.

My wife and I took it in November to drive to Dallas. Getting to Seguin took us 48 miles out of our way. After we got on SH 130 the ride was scenic and relaxing, and driving 85 mph posed no challenges. However, that was partly because we were nearly alone for much of the trip — there was usually only one vehicle in sight ahead and behind us.

Coming back, we stayed on I-35 all the way back to San Antonio. It was stop-and-go through Austin in congestion dominated by heavy trucks — there were a dozen in sight at any one time. Even though we did not have to go through Seguin, the trip back took an hour longer.

But the trip back, for all its headaches, was also free. SH 130 is a toll road, although one without toll booths. If you have a TxTag transponder in your back windshield your account is billed automatically. Otherwise, cameras read your license plate and the car’s registered owner is sent a bill, which is about one-fourth higher than the toll for someone with a TxTag account. Those bills are sent out monthly and we did not get ours until nearly two months after we made the trip.

Meanwhile, the side trip to Seguin makes more sense when you realize that the road was not intended for San Antonio commuters, but for trucks carrying Mexican commerce to and from Laredo. SH 130 is just one leg of the evocatively named Pickle Parkway, named after J. J. “Jake” Pickle (1913-2005), who was a U.S. congressman representing part of the Austin area from 1963-1995. The Pickle Parkway actually starts at the intersection of I-35 and Loop 410 in southwest San Antonio, follows 410 east around the outside of the city to I-10, then follows I-10 east past Seguin to the SH 130 intersection, and then takes SH 130 north to its juncture with I-35 north of Georgetown.

In the end, driving the Pickle (we’ll see if that phrase enters the language) only adds about 10 miles to a trip between, say, Laredo and Dallas, and that seems like a small price to pay to avoid Austin’s (as well as San Antonio’s) congestion. But you also have to pay a toll—mine, for a passenger car, was nearly $20 and a heavy truck would be charged three to five times more.

Stuck in the shadow of big rigs while crawling past downtown Austin, I got the impression that it might be wiser to, on the contrary, bribe drivers to take SH 130.

See here for previous blogging on this topic. As you may recall, the operator is teetering on the brink of default, so this road may not be “privatized” for that much longer. Rivard points out that this route was once part of what would have been the Trans Texas Corridor. Doesn’t make you feel good about how that project might have turned out based on this. Read the whole thing and see what you think.

We still have those outsourcing blues

We never learn from history. That’s just how we roll in this state.

In 1991, the Texas attorney general’s office signed an $11 million contract to computerize its child-support payments system. By 1997, the deal with Andersen Consulting had ballooned to more than $68 million and was three years behind schedule. A state audit found the company deserved its fair share of the blame for overpromising and underperforming.

A decade later, Andersen Consulting had renamed itself Accenture and was in the crosshairs of Texas lawmakers again after an $899 million contract to manage the Children’s Health Insurance Program and run call centers enrolling Texans in food stamps and Medicaid went awry. Poorly trained staff and technical problems led to a series of well-publicized snafus, including applicant backlogs growing by thousands and misinformed workers denying benefits to eligible families. Texas ultimately paid Accenture $244 million and canceled the contract.

Despite the two high-profile flubs, Accenture’s relationship with Texas appears stronger than ever. The company is in charge of most of the state’s Medicaid claims processing, as well as a $99 million upgrade of the AG’s child support payments system, two areas synonymous with its past missteps.

That a company with a 20-year history of troubled state contracts would continue drawing state business does not surprise capital veterans who have tried to reform the state’s contracting system.

“My observation over the years is we have often entered into contracts that may not have been in the best interest of the state, and we try to overcome it by managing them poorly,” said Carl Isett, a Republican state representative from Lubbock from 1997 to 2010 who worked on contracting issues and is now a lobbyist. “It’s just the recurring theme.”

[…]

State Rep. Garnet Coleman, a Houston Democrat first elected in 1991, said he would support temporary “freeze-outs” from future bidding by companies that have been shown to handle past contracts poorly. Yet more important than holding vendors accountable, he said, is boosting the state’s resources so that agencies aren’t outgunned when dealing with the private sector.

“The only way to do outsourcing properly is to have enough people working on the agency side to do appropriate oversight of the company that has the contract,” Coleman said. “What we don’t want is the tail wagging the dog, which is what usually happens.”

Coleman recalled being in the Legislature in the 1990s, when “outsourcing” emerged as a buzzword, coming up constantly in hearings and in policy proposals. Texas was drawing national attention for its efforts to transfer responsibilities onto the private sector, which Republican lawmakers predicted would lower costs while producing a reliable, efficient and technologically sophisticated delivery of services.

In 1997, under Gov. George W. Bush, the state began taking bids to outsource the state’s welfare, Medicaid and food stamp programs, predicting the move would save the state at least $10 million a month. The concept, viewed at the time as the most ambitious privatization effort by any state, fell apart after President Bill Clinton denied Bush’s request for a waiver from federal rules requiring that government employees handle much of that work. Bush accused Clinton of siding with politically powerful labor unions over good policy solutions.

The setback slowed, but didn’t stop, Texas’ march toward privatization. In 2003, Gov. Perry signed House Bill 2292, which consolidated 12 health and human services agencies into five and ultimately replaced thousands of state workers with private contractors handling duties like screening welfare recipients.

More than a decade later, the bill’s author and lead proponent, former state Rep. Arlene Wohlgemuth, described the bill as a success in its goal of shrinking state government and outsourcing services better handled by the private sector. Yet contracting oversight needs to be reformed, she said.

“In my opinion it is one of the greatest weaknesses of state government,” said Wohlgemuth, executive director of the Texas Public Policy Foundation, a conservative think tank. “We need to do a better job of enforcing the contract once we have agreed upon it and auditing those contracts.”

Of course, firing all of the HHSC employees and simply discontinuing all of its programs – an outcome that would have delighted Arlene Wohlgemuth – would have succeeded in “shrinking state government”, too. The fact that HB 2292 was a massive boondoggle that cost the state hundreds of millions of dollars while providing worse service and disrupting the lives of hundreds of experienced state employees isn’t worth comment on her part. You can see why we continue falling into this particular rabbit hole. No business would undertake this kind of project without a phalanx of project delivery managers and a contract that provided for rebates and penalties in the event of failing to meet benchmarks. All the outsourcing zealots want is to save a few bucks by any means necessary, even if it winds up costing more in the long run. Go read the whole thing and remind yourself why oversight matters. EoW has more.

The overcrowded jails of Montgomery County

Sometimes it’s hard to be a County Commissioner.

go_to_jail

Montgomery County officials are facing a dilemma partly of their own making: What to do with an ever-growing jail population after selling off another lockup.

The county’s jailers are struggling to find space for inmates — with dozens on occasion being forced to sleep on the floor or be shipped to a jail outside the county. The 1,200-bed jail is one of only five statewide — and the only one in the Houston region — rated “at risk” for overcrowding by the Texas Commission on Jail Standards.

Next door to the county jail, separated only by a cyclone fence topped with razor wire, sits the Joe Corley Detention Center, built by the county in 2008 for $45 million. While the 1,500-bed facility was planned to someday handle jail overflow, the inmate population didn’t rise quickly enough, prompting the county to sell it to a private company in May 2013, said Commissioner Craig Doyal, who is poised to become county judge in January after a Republican primary win.

Commissioners said they felt pressured into the sale because of an Internal Revenue Service deadline that could have cost the county the tax-exempt status on the bonds used to build the center.

Commissioners had pledged during the bond election that local inmates would fill 30 percent of the center within five years — but not a single inmate had ever been placed there. They had instead been allowing the U.S. government to pay to house federal prisoners there.

Florida-based Geo Group Inc. bought the center to house undocumented immigrants, leaving commissioners on Monday with little choice but to begin reviewing new proposals, costing in the $200 million range, to expand the jail.

Doyal points out that the county earned a $20-million profit from selling the center to Geo for $65 million. At the same time, Geo pays the county an additional $250,000 per year in taxes for the center and $500,000 for managing its federal prisoner contracts.

In addition, the proposed jail expansion, if completed, would be four times larger than the detention center.

Yeah, $20 million plus $250K per year is still a long way away from $200 million. I know I was a math major and all, but I don’t think you need any particular expertise to realize that. And if the last new facility never needed to be used, why would you need a new one that’s four times bigger than the one you have now? And another thing…you know, I’m just going to hand the mike to Grits.

The main difference between this situation and a circus is that clowns in the circus are professionals. The commissioners court’s ill-considered launch and inept (and possibly corrupt) handling of the whole private jail mess has been a comedy of errors and misjudgements that would be funnier if local taxpayers weren’t footing the bill. I’d be rather surprised if voters approve a nine-figure jail bond so they can go through the whole jail-building brouhaha again. (Wanna bet commissioners try to issue the debt without voter approval?)

Grits fails to understand after all these years why, whenever public officials suggest new jail construction in response to “overcrowding,” reporters don’t immediately begin to question the causes and solicit solutions for excessive pretrial detention. More to the point, why didn’t the consultants hired by the county suggest those options? Like other jails in the state with an overcrowding problem, most Montgomery jail inmates have not been convicted of a crime (and will receive probation even if convicted). Instead, just more than two thirds of them, according to a 7/1 TCJS report, are in jail awaiting trial, still technically presumed innocent. Most simply cannot afford bail. Statewide, about 58 percent of defendants in county jails are awaiting trial; half is not at all an unreasonable goal.

Whether the old jail needs renovation I cannot say. But to the extent the issue is building more capacity, it’s likely Montgomery County officials – particularly local judges – could resolve that  without new jail construction just by expanded use of personal bonds for lower risk defendants who can’t make bail. They should try that before asking taxpayers/voters to trust them with another jail building scheme.

Yeah, what he said. To be as fair as I can be to the Montgomery County Commissioners Court, they do represent a fast-growing county, so it’s not completely unreasonable that their current jail needs are growing as well. That doesn’t detract from Grits’ point, of course. There are dumb ways to handle that kind of growth, and there are smart ways to handle it. You can see which way they’re leaning up there. Hair Balls has more.

Building speculative privatized toll roads is risky business

Just ask the Texas 130 investors.

Speed Limit 85

Moody’s Investor Service has downgraded the credit rating of the private company that built and operates the Texas 130 toll road extension, a rating that could continue to drop unless traffic “aggressively” grows on the road in the next two years.

Moody’s issued the rating April 12 after putting the

SH 130 Concession Co., a partnership between Spanish-based Cintra and San Antonio’s Zachry American Infrastructure, on review in March.

The toll road, from Seguin north to South Austin, was billed as the nation’s fastest when it opened to drivers in late October, boasting an 85-mph speed limit.

But traffic counts on the road are about half the initial projections, the Moody’s report said, forcing the company to dip into its financial reserves to make loan payments and raising concerns about the possibility of future default.

A downgraded credit rating can indicate a greater risk to bondholders.

The report lists the company outlook as negative, which indicates the possibility of future credit downgrading in the next one to two years, Moody’s communications strategist David Jacobson said.

See here and here for the background. As EoW notes, the real issue is that Texas taxpayers will be on the hook for this in the event of a default or other inability by Texas 130 to pay. Keep that in mind if transportation funding gets added to the call of the special session as Sens. Williams and Nichols have requested.

Report recommends against privatizing the Harris County jail

Very good news.

Privatizing the Harris County jail would be risky and may not result in savings, according to an internal county memo recommending that Commissioners Court keep the state’s largest lockup in Sheriff Adrian Garcia’s hands.

The confidential Feb. 11 memo, obtained by the Houston Chronicle, comes after more than a year of study by staff from the county budget office, purchasing office and County Attorney’s Office. Commissioner Steve Radack had suggested the county consider privatizing the jail in 2010, and the court voted to accept proposals in April 2011, when the county had begun laying off scores of staff in a lean budget year.

Four private prison firms submitted bids in fall 2011, but only the proposal from Corrections Corporation of America, the nation’s largest private prison operator, was deemed viable.

“CCA provided a very compelling proposal,” the memo states. “However, there is uncertainty about what the county’s actual realized savings would be, and there is also a level of risk and uncertainty that goes along with outsourcing such a vital function to a third party. The evaluation committee concluded that the potential benefit is not sufficient reason to make a change at this time.”

A key factor in recommending against privatization, the memo stated, was the decrease in the sheriff’s budget in recent years, from $424.2 million in fiscal 2010 to what is projected to be less than this year’s $392.6 million budget. The savings are, in part, tied to a steep drop in the jail population, which has fallen by roughly a third since 2008.

“We have improved operations while saving money, we’ve passed jail inspections, we haven’t laid off any employees and we’ve reduced in-custody deaths,” Garcia said. “I think we’ve demonstrated that as a sheriff’s office we’re running this place like a business as much as we’re running it like a county jail.”

I suspect this will be the end of this story. When I inquired about the status of the report back in November, all of the responses I got made it sound like not much if anything would ultimately come out of this. The statements made by County Judge Ed Emmett and County Commissioner Steve Radack in this story sound a lot like what they told me back then. The case for some kind of action would be stronger if the jail was still overcrowded, with inmates being outsourced all over the place, and inspectors at both the federal and state level giving it failing grades – in other words, if we were where we were back when Tommy Thomas was still running things – but it’s extremely hard to argue now that the jail is being mismanaged. Add in the fact that CCA has – how do I put this delicately? – a rather non-stellar reputation for how they do business, and the case for not taking action is crystal clear. I’m glad to see that the county’s budget people see it the same way.

One more thing:

The privatization discussions helped the sheriff better allocate manpower in the jail to reduce overtime costs, said County Budget Officer Bill Jackson, and also allowed the sheriff’s budget to be separated into three parts in the budget the court will consider Tuesday – $166 million for law enforcement, $178 million for the jail and $47 million for jail medical – which will help to better identify and control costs in each category.

Breaking the budget out like this makes sense. You know what else would make sense? Quantifying how much Medicaid expansion would save the county on health care costs, especially mental health care costs. For all that Harris County is trying to think big about health care, they’re almost bizarrely reluctant to be curious about this. I know I’m being tediously monotonous about this. Maybe I’m wrong about the potential for savings here. I doubt it, given what so many other counties are reporting, but I could be. Why not study the question and settle it once and for all? It’s becoming very hard for me to avoid the conclusion that the four Republicans on Commissioners Court don’t want to know the answer because it might be politically awkward for them.

UPDATE: Since writing this post, I have come across this Chron editorial that indicates Judge Emmett is in favor of Medicaid expansion. Obviously, I’m very glad to hear this. I don’t know why there hasn’t been more coverage of this in the Chronicle.

Jail privatization update

Grits, from about two weeks ago:

In a conference call last week with investors (see the transcript), Corrections Corporation of America said it expects to find out by next spring whether they will receive a contract to operate the Harris County Jail. Said President and CEO David Hininger:

The final update I wanted to give on the new business opportunities is here in Harris County. And just as a reminder, this is the opportunity to take over the entire jail system within Harris County. This is metropolitan Houston. This would be an opportunity to take over a system that has about 9,000 prisoners on any given day. We submitted our best and final for this procurement back in August of this year, and again we think probably later this year, probably early next year is when the county will make a decision on this requirement.

An institutional investor asked Hininger, “Could you describe – give us a little bit more color on Harris County? I kind of had thought that perhaps something might have – a decision might have been made in the fall, and wondering what, if anything, may have changed there?” He replied:

Yeah, good question, I would kind of relate it back to my earlier comment. We just have gotten a sense from our either existing partners or new partners that either opportunities, pending procurements, maybe decisions where they need to move forward on a requirement, a lot of those are just being deferred, either past the election or past the 1st of the year. There was obviously a lot of – everybody in the country was most focused on the national election, but there was a lot of elections going on at the state and local level.

And so, our sense is that we just had a period of time where a lot of decision-makers were sitting on their hands. So I would [say] Harris is probably in that category. And we think we’ve put forth a very compelling and comprehensive and competitive proposal to them, but our sense is probably now that we’re on the other side of the election, either later [this] year or early next year, we’ll see an action being taken by them.

Were Harris County Commissioners waiting for the elections to pass before moving forward on privatization? We’ll soon see. For those interested in (much) more detail, here’s the RFP to which CCA and its competitors are responding. Notably, most of the information the public has been getting on this back-room process has not come from county government but from corporate investor conference calls. That’s never a good sign.

See here and here for the background. I think we can all agree that any discussion about this needs to be held in the open, for all to hear and for all with a stake in the outcome – which is to say, all Harris County taxpayers – to be able to have their say about it. Towards that end, I made a few inquiries about this. County Judge Ed Emmett said this was the first he’d heard about this particular item in many months (the last update I have is from December of 2011, so that certainly tracks for me). He said that right now the RFP that Corrections Corporation of America and any other bidders submitted is being reviewed by the purchasing department, which will when ready present its findings for the Court to consider. At that time, they may or may not take any action, but Judge Emmett assured me that if there was to be anything further on it, that would all be done during open Court meetings as official agenda items.

I also spoke to Commissioner Radack, who characterized this as a very complex process and that the main thing he hoped to get out of it was some lessons about possible ways to be more efficient and save money. I suggested his description sounded somewhat like an audit to me, and he thought that was a reasonable analogy. He stressed that any review of corrections is multifaceted and can take a lot of time – he reminded me that the original proposal of a joint city/county jail facility was made when Bob Lanier was still Mayor – and that his primary goal was the learning opportunity. I did not get the impression he was seeking anything transformational. In fact, I’m reminded as I review the history of all this that the origin was in late 2010 when Radack and Jerry Eversole were complaining about the cost of outsourcing inmates to Louisiana. That was when Radack made his request for a study of ways to reduce costs at the jail, which turned into a formal RFP when then-Budget Director Dick Raycraft came back and said it was the only way to answer the question. And so here we are today, in an environment where inmates are no longer being outsourced and jail costs overall are already lower, awaiting that answer.

Finally, Sheriff Adrian Garcia sent me the following statement via email:

“The county purchasing and budget offices are still working on the request from Commissioners Court in the spring of 2011 to determine if allowing a private company to run the Harris County Jail would be cost-effective for the county and the taxpayers. The study continues.

“In the meantime, I will continue to build on the success that we have had over the last four years in which my staff and I have saved the taxpayers more than $60 million in the operation of the jail and other functions of the Sheriff’s Office, turning a gaping budget deficit into a surplus without degrading public safety or laying off employees. This accomplishment included using a combination of civilian staff and detention officers rather than deputies in some jail functions. Under my administration, the jail has been in full compliance with state standards and inmate deaths have declined. This is a true example of the taxpayers getting the best deal with the sheriff as the direct administrator of the jail.

“I am also mindful of Judge Emmett’s comment that no private detention company has run a jail system as big as ours, and of then-Texas Commission on Jail Standards Executive Director Adan Munoz’s comment that privatization of the jail is not advisable. Their comments also mirror those of sheriffs in other parts of the country who have seen how privatization experiments at county jails have actually cost communities more than when they were run by the sheriff.”

So there you have it. Obviously, this bears watching, and I will be very interested to see what report the purchasing and budget departments eventually make to the Court. In the meantime, I hope this helps shed a little light on what’s going on.

The helium shortage gets real

It could affect Thanksgiving.

“We’ve secured helium to meet some of our parade needs, and we are working to secure more,” Kim Stoilis, president and chief executive officer of the Houston Festival Foundation, said in an email Wednesday. “We’re excited about this holiday tradition and our parade director assures me that all of our balloons will be flying high on Thanksgiving morning.”

But the full impact of the helium shortage on the parade remains unclear. Parade organizers declined to specify how much more helium is needed or whether the shortage would translate into fewer floats along this year’s parade route.

“Due to the severe shortage of helium and our continuing negotiations to procure the resource we’d rather not discuss specifics,” Stoilis stated in the email.

[…]

The Bureau of Land Management, which maintains much of the nation’s helium supply, held about 43 billion cubic feet (bcf) of helium in 1960, but today holds only 13 bcf because the nation’s supply has been privatized, said Joseph Peterson, assistant field manager of field resources at the bureau’s Amarillo office.

Under the 1996 Helium Privatization Act, the land management agency has been charged with selling off the remaining supply of helium on federal lands as private industry and overseas production plants take over the role of helium extraction, he said.

But today, Peterson said, the worldwide supply of helium has not kept pace with the demand.

“The past few years (the shortage) has been crucial because everyone wants the helium for their parades,” he said. “In the past there have been a couple of suppliers that were able to meet that demand. There is still some helium available but there may not be a lot of balloons in this year’s parades (nationwide).”

I wrote about this last year. It’s all fun and games until the parade floats start being affected.

Psych hospital privatization rejected

Good.

The Department of State Health Services has rejected a bid by Geo Care to privatize Kerrville State Hospital.

Last year, legislators told State Health Services it had to solicit proposals from mental health providers that wanted to run one of the state-run psychiatric hospitals. Those proposals had to show that the bidder could run the hospital for 10 percent less then its current budget.

Boca Raton-based Geo Care was the only company to submit a proposal. Its bid was to run Kerrville State Hospital.

But the state has rejected Geo Care’s bid, according to an email sent to hospital employees today by Kerrville State Hospital Superintendent Jay Norwood.

“I have just learned that Commissioner (David) Lakey has rejected the proposal submitted to privatize one of our state hospitals. HHSC Executive Commissioner (Kyle) Janek is in agreement with this decision and the proposal will not be moving forward,” Norwood wrote. “Therefore, at this time, there is no plan to privatize Kerrville State Hospital or any other state hospital in Texas.”

See here and here for the background. This was a bad idea from the get-go, and I’m glad it’s been canned. And to think, the decision was made before this happened. Good call, folks.

Why are we paying for a privatized psych hospital?

Makes no sense to me.

The Department of State Health Services has spent more than $2 million on bond interest for a psychiatric hospital that it doesn’t own and that was championed by Senate Finance Chairman Tommy Williams.

But that’s not all the state is paying for, said Montgomery County Commissioner Ed Chance, who spearheaded the effort to build the Conroe facility. If its allocations remain the same, State Health Services will eventually pay off the entire $32 million Montgomery County borrowed to finance the hospital, he said.

“If they hadn’t agreed to the funding behind it, we wouldn’t have built it,” Chance said.

The state maintains that it’s not covering the total cost of the hospital’s construction, just the interest. State Health Services pays the county $15 million a year for psychiatric services for patients accused of crimes and deemed incompetent to stand trial.

About 9 percent of that is allocated to bond interest, said State Health Services spokeswoman Carrie Williams.

“Interest is OK,” she said. “Construction is not. We monitor the expenses that come in and will be conducting a regular financial review, as we do with all contractors.”

The Legislative Budget Board, which advises the Legislature on financial matters, says it is taking a closer look at the issue. Matt Hirsch, spokesman for Lt. Gov. David Dewhurst, said the lieutenant governor’s office been assured by State Health Services that its payments are acceptable, “but out of an abundance of caution, we’ve asked the Legislative Budget Board to look into it.”

See here and here for the background. I just have one question: If this is such a normal, no-big-deal thing, then surely there are other examples of the state helping counties pay off such bonds. The story doesn’t mention any, however, and I have a sneaking suspicion there aren’t any to be found. I don’t think this is a bad idea for a state-owned facility, but given the involvement of a private entity with a spotty record and the fact that as Grits notes this didn’t go through the normal budget processes, the whole thing has the stink of boondoggle on it. Surely we can find a better use for my tax dollars than providing a subsidy for Montgomery County.

Opposing the privatized psych hospital

Some pushback on a bad idea.

A coalition of influential Texas organizations is pushing back against the proposed privatization of a state psychiatric hospital by Geo Care, a subsidiary of a prison operations group that has a troubled history in Texas.

The Department of State Health Services is preparing to privatize one of the state hospitals it oversees, a move estimated to save taxpayers millions of dollars a year.

Members of the coalition, concerned by the fact that Geo Care was the only bidder to operate the hospital, are urging the state health department, the Legislative Budget Board and Gov. Rick Perry to reject the company’s proposed management of the hospital.

“The Geo Group has a long and troubled history in Texas,” said Bob Libal, whose organization, Grassroots Leadership, signed the letter along with groups including the American Civil Liberties Union of Texas, the Center for Public Policy Priorities, Disability Rights Texas, Texas NAACP, the Texas Criminal Justice Coalition and the United Methodist Church.

The letter in question is here, the associated press release is here, and some background on this is here. I’d not heard of Grassroots Leadership before, but their mission statement says they’re all about abolishing for-profit prisons, jails, and detention centers, so this is certainly in their wheelhouse. Here’s a letter they sent in March to all 50 governors opposing plans by Corrections Corporation of America to spend up to $250 million buying prisons from state, local, and federal government entities, and then managing the facilities. The only problem I see with the letter they sent to Rick Perry is that all the signers are lefty groups, meaning that Perry will send it straight to the round file. That doesn’t make them any less right, it just means they’ll have the dubious pleasure of saying “we told you so!” someday in the future when this has gone horribly wrong. The Trib has more.

Privatizing psych hospitals makes as much sense as privatizing prisons

Especially when it’s the same outfit doing the privatizing in each case.

Sixteen months after the Montgomery County Mental Health Treatment Facility opened in Conroe, the state’s first publicly funded, privately run psychiatric hospital is facing at least $53,000 in state fines for serious shortcomings in patient care.

The private operator, Geo Care, is a subsidiary of Geo Group, a private prison company that has drawn attention in recent years because of deaths, riots and sexual abuse at some units in Texas and other states.

Geo Care spokesman Pablo Paez declined to comment to the American-Statesman. Montgomery County Commissioner Ed Chance said all deficiencies cited by the state have been fixed.

Meanwhile, the facility’s construction, by a different firm, is the target of a separate federal grand jury inquiry.

The problems come to light as the Department of State Health Services prepares to privatize one of the 10 public psychiatric hospitals it oversees. If Geo Care bids on the ongoing privatization effort — and it has expressed interest to public officials in doing so — its work in Montgomery County could be a harbinger of what taxpayers can expect if a for-profit company wins control of a public state hospital.

[…]

Geo Group is best known in Texas for its rocky history in the prison system. In 2007, officials shut down the company’s Coke County Juvenile Justice Center in West Texas, citing unsafe and unsanitary conditions. In 2009, inmates at the Reeves County Detention Center, also in West Texas, rioted over the quality of health care and other complaints.

Although state records don’t indicate such extreme conditions at the Montgomery County hospital, State Health Services proposed in May that the facility pay a $107,000 fine for its deficiencies. Last week, the state tentatively knocked that fine down to $53,000, but the decision is not final.

“The facility is still getting its feet on the ground and is dealing with some startup issues as a new facility,” State Health Services spokeswoman Carrie Williams said. “We need to see improvements, and we’re giving them the opportunity to do that. We continue to work with them and expect them to get it right.”

Well, we’ll see about that. For this kind of privatization to work – for the privatizer to cost less than a state-provided facility and to still make a profit – there’s only two options I can think of. One is to cut corners and pay workers as little as possible. The other is to structure the deal with the government entity that’s paying you to do this service in such a way that the more business you get, the more money you make, then work to ensure that they give you as much business as possible. If you’re really smart, you’ve set things up in such a way that any losses you might have to incur due to business not being as brisk as everyone claimed it would be get covered by your government partner. We all know how well this has worked out for the jail builders and the counties that have gotten into bed with them. It’s hardly a stretch to imagine what could go sideways here. Grits has more.

Suehs to retire

Texas Health and Human Services Commissioner Tom Suehs will call it a career this August.

Tom Suehs

Suehs’ announcement follows news last month that Billy Millwee, the state’s Medicaid director, was retiring, leaving an even bigger void than anticipated at the top of an agency facing billions of dollars in unpaid Medicaid costs and struggling to institute a federal waiver that calls for complex hospital payment reform.

[…]

It’s been a rough several months for Suehs and other HHSC officials. They’ve got doctors outraged over Medicaid and Medicare cuts on one side. On the other, public and private hospitals are duking it out over who wins and who loses from a complicated new formula to determine how much they’re reimbursed for uncompensated care. Meanwhile, counties and hospital districts are facing their own mini turf wars, as they work to form the regional partnerships required by the waiver.

The high-profile health care resignations compound an already big leadership void; Texas Education Commissioner Robert Scott is leaving next month. Combined, public and higher education and health and human services make up nearly 85 percent of the state’s general revenue budget.

Suehs was a pretty decent Commissioner, his recent crackup over Planned Parenthood notwithstanding. Lord knows, he was better than Albert Hawkins, though all he really had to do for that was not implement a doomed-to-fail privatization scheme in a manner to ensure the failure was as spectacular as possible. Still, as I said he did a decent job overall, and I wish him the best in retirement. I hope Rick Perry picks someone nearly as competent as a replacement.

Outsourcing Texas border security

What could possibly go wrong?

Gen. John Abrams

A little-known private defense contractor from Virginia has quietly received about $20 million under a series of no-bid contracts with the State of Texas to develop its border security strategies, an effort that included shaping the state’s public message on the increasingly controversial nature and extent of violence spilling into Texas from Mexico.

According to an internal Department of Public Safety memo, the role of Abrams Learning and Information Systems Inc. expanded dramatically after Gov. Rick Perry, then in the midst of a campaign for governor, ordered an acceleration of border security operations that the state wasn’t equipped to handle on its own.

Over the next 4 1/2 years — ALIS, founded in 2004 by retired Army Gen. John Abrams — would become intimately involved in nearly every aspect of the Texas Department of Public Safety’s border security apparatus, according to documents obtained by the American-Statesman through the Texas Public Information Act. Its assignments ranged from refining the state’s Operation Border Star campaign and coordinating the role of National Guard troops along the border, to setting up the state’s joint intelligence support centers and creating a multimillion-dollar high-tech system to map border crime.

Despite the firm’s work on the state’s most important border operations, ALIS flew so far under the radar that outside of law enforcement, few state and local leaders knew of its activities. Several officials who have worked closely on border security issues said they had no knowledge of the firm until contacted by the Statesman.

State Sen. Jose Rodriguez, D-El Paso, said he plans to call for an investigation into the state’s relationship with ALIS, saying that the state had outsourced vital security operations to a firm with “less accountability and less transparency than I would expect from state agencies.”

Even a keen observer of the Department of Public Safety could easily have been unaware of the contractor. Despite more than half a dozen contracts totalling $19.2 million, according to the Texas comptroller’s office, a review of the minutes and agendas of the state’s Public Safety Commission meetings between 2006 and 2011 revealed no public discussion about the firm’s role and only passing references to the firm’s contracts.

Department policy did not require contracts such as those with ALIS to be presented to the commission until September 2009, according to DPS officials.

Nor does the website of the Legislative Budget Board, the only agency charged with gathering information on state contracts, reveal the extent of the ALIS role; it shows just two contracts worth $2.1 million.

[…]

In August 2010, the DPS enlisted Abrams to develop a public and media outreach strategy to “position Texas border security efforts in a positive light,” paying the firm to develop talking points, presentations, testimony and the “orientation” of senior government leaders. Abrams created a public relations campaign featuring 36 principal messages, including “The success of Texas border security and law enforcement efforts are critical to preserving you and your family’s safety and way of life” and “Border Security is a Federal Responsibility but a Texas problem” — the exact language contained in an earlier Perry speech and a common refrain during Perry’s presidential campaign.

A draft document obtained by the American-Statesman, titled “Border Security Public Outreach Themes and Messages,” includes talking points that would seem to boost the firm’s standing. In touting Operation Border Star, the state’s principal border security strategy, the document says that law enforcement agencies “join with private companies” to “reduce border-related crime.” The messages were meant to be used by the agency’s public information department and to guide agency interactions with the media.

DPS officials say they contracted with ALIS on media outreach because they wanted the public to know about Mexican cartels recruiting Texas students to carry drugs and other threats such as smuggling operations and public corruption.

Rodriguez said he thinks ALIS’s public information work represented a conflict of interest. “They are giving talking points to officials so they can make the case for more public money for border security, which they can then use to pay for more contracts,” Rodriguez said. “(ALIS) was doing this to make themselves more relevant.”

Abrams was one of those retired generals who spent the year 2002 on TV and in the newspapers as a “military analyst” beating the drum for an invasion of Iraq, so he knows a little something about this kind of sales job. You really need to read the whole thing, then when you’re done go read the Alternet story that came out a couple of days before the Statesman published theirs. Among other things, Alternet reporter Tom Barry points to a February report from the Texas state auditor that called into question the way some federal grant money for border security was spent:

The audit reviewed a representative selection of cases among the $265.9 million in federal grants and subgrants to DPS — in the areas of homeland security, border security, emergency management, and law enforcement interoperability.

Among the findings of negligence and incompetence were these startling instances:

  • A draw-down of $755,509 in federal funds to issue a duplicate payment to one subgrantee.
  • Five of the six procurements (83%) examined by the auditor in the cluster of federal grants for homeland and border security were not bid competitively as required.
  • DPS categorized four of the five procurements examined by the auditor as “emergency procurements,” and in three of those four DPS was unable to document why they were processed as “emergency” contracts.
  • DPS has no system to track, administer, monitor federal subgrants – as federal guidelines require, leading to routine occurrences of duplicate payments, dipping into one federal fund to pay for unrelated programs, and failure to submit required reports and audits.
  • Complete failure to track interest rates on unused federal funds and to remit those funds, as required by federal grant guidelines.
  • Access to law-enforcement databases by contract programmers who lacked proper authorization or clearance.

Grits flagged both of these, and summarizes as follows:

Sounds like the McCaffrey report and the recent Spring Break warning are all part of a broader public relations campaign. For that kind of money, there’s likely more misinformation coming, or else this was the most expensive PR advice Texas taxpayers ever paid for.

Just a reminder that no matter what the budget situation is, Rick Perry and the Republicans in the Lege will always find money for the things they think are important. Go read and find out how that money has been spent without you knowing about it. More here and here, and a statement from US Rep. Silvestre Reyes is beneath the fold.

(more…)

Thinking long term about the city’s finances

If you didn’t have to worry about practicality or implementation issues, what ideas would you have about improving the city’s long term financial health? That in a nutshell is the mission of the Long-Range Financial Management Task Force that was created last year when the budget was adopted, and they’re starting to generate those ideas. I fear they may be missing something, however.

Unconstrained by the political reality that makes some of the more audacious suggestions highly unlikely, a 16-member task force has brainstormed 229 ways to save or raise hundreds of millions of dollars for Houston city government.

The city does not even have the power to implement many of the ideas on its own. The draft list, however, may foretell debates to come if the mayor and City Council seek to act on its more politically sensitive ideas.

For example, dozens of items offer ways to reduce future pension benefits, including ending pensions altogether and borrowing money to cover the current $5 billion in future pension bills for which the city has not set aside money. The list also includes changing from traditional guaranteed pensions to 401(k)-type savings plans, reducing survivor benefits, requiring employees to contribute more and raising the retirement age.

[…]

Raising taxes likely also would meet stiff resistance. The mayor and council closed a $100 million budget gap in June without even discussing a tax increase. But two members of the task force put a property tax increase of 1 cent per $100 of assessed value on the list, which would raise an additional $13 million a year for the city. To implement a suggestion of a one-cent sales tax increase, which would raise more than $500 million a year, the city would need state authorization. To avoid political infighting on the task force, members could submit ideas anonymously with a slip of paper in a cardboard suggestion box at all meetings.

There’s a bunch of presentations on the Financial Management Task Force webpage, if you’re into that sort of thing. I will defer for now on discussing the merits or demerits of any particular idea. I will just note that the ideas all seem to fall into one of three broad categories: Sticking it to city employees, privatizing various functions (where the definition of “privatizing” also includes “handing stuff off to Harris County”), and raising taxes or fees. What’s oddly missing from this is any discussion of policies that would encourage growth within the city. I say this is odd because nearly every candidate I’ve ever interviewed for city office has touted the idea of promoting growth in Houston as something he or she wants to do, though they generally don’t have much in the way of specifics. Seems to me this task force is the perfect opportunity to blue-sky a bunch of schemes for growing the city and its tax base. I don’t know if the lack of such ideas (which admittedly may just not have been mentioned by the story) are because there aren’t enough politicians on the task force or if the recent relentless national focus on debt and deficit has stunted everyone’s imagination on this subject. I think it’s critical that we pay more attention to this, because as Peter Brown points out in a letter to the editor, while the greater Houston area had dramatic growth over the past decade, the city itself has not. This has a number of consequences, including some you might not think about, and it really deserves more attention. There’s still a lot of underutilized space in the city. I urge the Task Force to spend some time thinking about how we can change that for the better.

Weekend link dump for December 25

Just a few more hours till the after-Christmas sales start. Assuming there are any more Chistmases after this one.

The case against Santa Claus.

Trying to exert control over the presents your kids get is ultimately doomed to fail.

How many of the presents under your tree were made in America?

On baby names, pet names, and product names. For what it’s worth, one of Tiffany’s university friends is named Siri. I wonder what she thinks about the new iPhone gadget.

Sadly, the poor will be getting another lump of coal for Christmas. Actually, that’s not quite true – even the coal is being taken from them. By Congress, naturally.

If I told you that Ebenezer Scrooge lived in Alabama, would you have any trouble believing me?

From the “Everything old is new again” department: A “Bosom Buddies” for the new millennium.

How well can you tell your supervillains from your GOP Presidential candidates, in particular Newt Gingrich? Take the quiz and find out. I got 7 out of 10 correct.

When something is written in your name, saying that you yourself didn’t write it isn’t an excuse.

I have only unfriended a few people on Facebook. Generally speaking, they are people I shouldn’t have friended in the first place.

Generally speaking, it is better to give money to your local food bank than give canned goods to a food drive.

Is there anything Mitt RoMNEY hasn’t flip-flopped on?

More planets are good.

Where the cast of “A Christmas Story” is today.

After the busy night he had, I sure hope Santa kicks back and relaxes today.

More on privatizing the Harris County jail

Grits:

On Sunday, Grits broke the news that Corrections Corporation of America had submitted a bid to manage the Harris County Jail, citing information given to investors about a county-issued RFP which hadn’t been reported in the local media. Last night, the local Fox TV affiliate confirmed it:

FOX 26 News obtained this news letter from Corrections Corporation of America, a private prison operation firm:

“We are also very excited about the opportunities that are before the industry and for which we feel well positioned. We’re awaiting a decision from Arizona on its 5,000 bed request for proposal as well as a managed-only opportunity for approximately 9,000 beds in Harris County, Texas.”

County officials confirm private talks are underway to consider privatizing the county jail.

That’s virtually the same wording cited in the Grits post from a Zacks.com analyst.

You can see the RFP here. None of this is exactly news – the item came up on the Court agenda back in April (page 21) and was duly reported and blogged about at the time. The Court authorized a study of the possibilities of privatization, which as far as I know is still a work in progress. So, other than knowing that someone did in fact submit an RFP, there’s not much new here. Privatization is still a bad idea for the jail – you’ll note it was Steve Radack who was pushing this, which should tell you all you need to know – and we should keep an eye on this, but it’s not at the action stage just yet.

More Perry privatization problems

Insert your favorite cliche about being shocked.

The state of Texas has quietly outsourced the management of more than $1 billion in federal disaster recovery funds to an engineering firm with close ties to Gov. Rick Perry’s administration, paying the Kansas City, Mo. -based firm HNTB $45 million so far to process infrastructure grants for communities damaged by Hurricanes Dolly and Ike.

The company’s billings threaten to exhaust the amount budgeted for administrative and planning costs, while only 20 percent of the first round of money released to Texas to aid disaster recovery grants has been spent three years after the storms. Based on the state’s original timeline, at least half those projects should have been completed by now, federal officials say.

The problems have caused officials with the U.S. Department of Housing and Urban Development to voice alarm and begin quarterly reviews in an attempt to get the program back on track.

Hiring a private firm to handle what has been termed the largest public works project in the state’s history is unusual, federal officials say.

[…]

[HNTB] was the principal consultant for Perry’s first — and largest — pet project as governor, the proposed $184 billion Trans-Texas Corridor, which succumbed to widespread public opposition in 2010. Since 2008, the Texas Department of Transportation has paid HNTB $109 million for engineering consulting services, according to records with the state comptroller. Ray Sullivan, communications director for Perry’s presidential campaign, has been a lobbyist for HNTB.

The firm is one of 139 major “crossover donors” identified by Texans for Public Justice who have contributed substantial sums to Perry and the Republican Governors Association, which Perry has twice chaired. According to campaignmoney.com, HNTB and its executives have given more than $500,000 to the association, which has sent $4 million to Perry’s political campaigns.

Business as usual. I’m so inured to this that the only aspect of it that’s making me raise an eyebrow is that this was an out of state firm. What, there’s no one in Texas good enough for Rick Perry to funnel government money to? I don’t know what else to say. Read the whole thing, and kudos to the Statesman for putting it together. Forrest Wilder, who’s written before about our disastrous hurricane relief efforts, has more.

We’re running out of helium

Am I the only one that finds this a little disturbing?

Deep beneath the dry, dusty ground outside this Panhandle city lies something lighter than air: helium.

But the supply of the gas that inflates balloons, cools MRI machines and detects leaks in NASA space shuttle fuel tanks isn’t infinite.
There’s only so much helium in the world, and some fear that a shortage is coming.

“Once it’s used up, it’s gone,” said Rasika Dias, professor and chairman of the chemistry and biochemistry department at the University of Texas at Arlington. “What we have is what we have.”

Still, nearly two dozen underground wells about 15 miles northwest of Amarillo work round the clock to retrieve helium and pump it to customers connected to a nearly 450-mile pipeline that stretches from the Panhandle through Oklahoma and to Kansas.

This site — thousands of acres where cows and antelope roam — is home to underground gas fields and the country’s only Federal Helium Reserve.

More than one-third of the world’s helium supply comes from this site, including nearly half of the U.S. supply.

But even helium officials in Amarillo say that after more than a half-century of steadily providing the world with helium, the facility’s production days are numbered.

“There is just a finite amount of helium out here,” said Leslie Theiss, field office manager for the Bureau of Land Management’s Amarillo field office. “There’s only so much we can do.

“The clock is winding down on this place.”

That seems to be what the government wanted more than a decade ago, when Congress passed the Helium Privatization Act of 1996, calling on reserve officials to sell off most of their helium by 2015. The latest projections show that all the helium won’t be sold on time, but it could be gone by 2020.

And then we’ll buy it from someplace else, like Russia, until all that runs out, too. It’s an interesting story, but other than the obvious effect on balloons and silly voices, it’s not clear what the implications of this are. Maybe it’s no big deal, I don’t know. But I still get nervous when I see headlines about the earth running out of things.

Who wants to help build the Grand Parkway?

The State of Texas wants to know.

The Texas Department of Transportation, which has responsibility for the parkway in Harris, Montgomery and Chambers Counties, is moving toward use of a public-private partnership to get faster funding for the multibillion-dollar, 184-mile project.

[…]

This spring, the Legislature renewed the public-private option for building the Grand Parkway when it passed a bill that extended TxDOT through 2015. An amendment to the bill authorized public-private partnerships to develop the Grand Parkway, U.S. 249, U.S. 290 and Texas 288 in the Houston area as well as three Dallas-area projects.

TxDOT issued a Request for Information June 10 regarding development of the Grand Parkway and Interstate 35-E in Dallas. Grand Parkway responses are due Wednesday.

Agency spokeswoman Kelli Petras said TxDOT is open to any idea but is leaning toward a public-private deal, also known as a P3 agreement, because of the state’s budget woes.

“An RFI is searching for any method that we could (use to) build the road,” Petras said. “Obviously, with funding limited, it is assumed that a P3 model will be the one selected.”

Gornet said TxDOT’s request for information was not intended to emphasize a particular method of building the parkway.

“If a P3 ends up being the best value for the citizens, so be it,” said Gornet, director of the nonprofit association established by TxDOT in 1984 to facilitate Grand Parkway development.

I don’t have any problems with the concept of a public-private partnership; McBlogger would disagree with that, but I don’t think it’s necessarily a bad idea. What is a bad idea is spending billions of dollars to build a road in the middle of nowhere when there are far more pressing needs elsewhere. If we’re going to engage in urban planning on such a massive scale, we ought to do so in a way that gets a much bigger immediate return on the investment.

By the way, I wonder what happens if TxDOT doesn’t get any worthwhile responses. I presume they’ll just extend today’s deadline and encourage those that had responded to step it up. Still, something to think about just in case.

Council approves deal to spin off Convention Center

Meet Houston First, which merges the city’s Convention and Entertainment Facilities Department and the Houston Convention Center Hotel Corporation, which runs the Hilton Americas.

The corporation will not have to come to the council to get expenses approved. The unionized work force of the city department will become private-sector employees of the corporation. The corporation is free to take chances by, for example, launching new trade shows without worrying that taxpayers are on the hook if the event is a bust.

Houston First will rent the GRB, Jones Hall and the Wortham Center from the city.

[…]

The concept has been talked about for a decade, but the plan approved on a 14-1 vote by City Council on Wednesday came together in recent months as Mayor Annise Parker’s administration looked for ways to close a $75 million budget gap without raising taxes.

The budget proposal she released last month banked on council approval of the merger and the $10 million in rent and fees the corporation will pay the city in the fiscal year that begins on July 1.

See here for some background. The story notes that the Mayor’s office overcame some initial skepticism from various Council members, including CM James Rodriguez in whose district the Convention Center is and who was unhappy about not being briefed before the plan came to light. If the end results are similar to those of the Houston Zoo, which was spun off in 2002, then this should work out fine.

More on the city’s convention center spinoff proposal

This press release from the Mayor’s office about the proposed spinoff of the city’s convention business hit my inbox this afternoon:

Mayor Annise Parker today recommended consolidation of the city’s Convention & Entertainment Facilities Department (CEFD) into the Houston Convention Center Hotel Corporation (HCCHC). The proposal, if approved by City Council, would provide the city an extra $10 million in the next fiscal year, thus helping to avoid some planned layoffs.

Under the proposal presented to City Council’s Fiscal Affairs Committee today, the newly renamed organization, called Houston First Corporation, would lease CEFD properties from the city for an $8.6 million pre-payment of rent, payable in the next fiscal year, which starts July 1. In addition, an annual lease payment of $1.4 million would also begin in FY12. Future increases in the lease payments would be tied to the Consumer Price Index.

CEFD properties include the George R. Brown Convention Center, Wortham Theater Center, Jones Hall for the Performing Arts, Jones Plaza, Miller Outdoor Theatre, Sesquicentennial Park, Root Memorial Square and several other smaller park and performing arts facilities.

“This is somewhat different from 2002 when the city created a non-profit organization to manage the Houston Zoo because this time the city will receive annual revenue from leasing these facilities.” Mayor Parker said. “Those monies will help the city’s bottom line and, in turn, reduce the number of hard-working employees we have to layoff.”

“Our facilities bring in revenues, but their primary purposes are to serve as economic generators for the city by increasing the levels of convention and tourism business,” said CEFD Director Dawn Ullrich, who would serve as president of Houston First. “We could operate more efficiently as part of Houston First, which would enable us to generate more revenues to the city through increased bookings in the long run. The increased revenues will also allow us to continue to maintain all of our facilities in first-class condition.”

“With consolidation, we create a single entity that’s focused on the operation as a whole for the long term,” said HCCHC Chairman Ric Campo, who would chair the board of Houston First. “We can develop a unified, campus-like approach to soliciting convention business for both the convention center and the Hilton Americas.”

The city is working with the HOPE Union on arrangements for the CEFD employees who will become employees of Houston First Corporation.

The Mayor would appoint and City Council would confirm Houston First’s nine board members. The Mayor recently appointed or reappointed current members of the HCCHC board, who would simply remain in place for the duration of their terms.

The city created the HCCHC in 2000 to govern the construction and operation of the Hilton Americas-Houston.

City Council approval of the merger is tentatively scheduled for May 18.

That addresses some of the concerns raised by Hair Balls and Nonsequiteuse, though not all. I am certain that this will get tagged by someone on Council on the 18th, so there will at least be some time to discuss the remaining issues. If the city really is working with HOPE and they are agreeable to the plan, that will cover a lot of it for me. We’ll see what happens in Council.

UPDATE: Hair Balls reports on Council’s reaction.

Spinning off the convention business

The city is looking to get out of the convention and entertainment business and maybe make a few bucks in the process.

The city’s Convention and Entertainment Facilities department currently runs the George R. Brown Convention Center and other city-owned venues downtown. A plan on its way to City Council next week would make the department a separate corporation that does not need council approval for its purchases. About 120 people who work for the department no longer would be city employees and would lose their union protections under the plan.

A summary of the plan obtained by the Houston Chronicle outlines the creation of Houston First, a merger of the city department with the Houston Convention Center Hotel Corporation, a city-created nonprofit that runs the Hilton Americas hotel adjacent to the convention center. Houston First would have its own board of directors and lease the convention center and other buildings from the city for $2 million a year. It would pay the first five years’ rent up front during the fiscal year that starts on July 1.

That cash infusion would bring down next fiscal year’s projected budget gap to $75 million, a shortfall that had been as high as $130 million but has steadily shrunk as the city lays off employees, consolidates operations and finds other savings.

[…]

The new corporation also would run the Wortham Center, Jones Hall and the Miller Outdoor Theatre.

I’m generally not a fan of privatization – Lord knows, the track record of it in this state sucks – but this doesn’t seem unreasonable to me. Unlike handling food stamps and other state benefits, running these facilities doesn’t strike me as a core function of government, and there’s no reason why a private non-profit couldn’t do a perfectly good job. As the story notes, the city spun off the zoo in a similar fashion in 2002, and I daresay it’s none the worse for wear. I’d like to know what happens at the end of the 15-year lease – do the terms get renegotiated, or does the non-profit get the businesses free and clear? – but otherwise I’m not particularly alarmed. What do you think? Nonsequiteuse has more.

Jail privatization

Does anyone really think that privatizing the Harris County Jail would be a good idea?

The suggestion comes from Commissioner Steve Radack, who said the item is a way for the county to examine all ways of cutting costs as budget cuts take hold and scores of county workers are laid off.

“We need to look at trying to save taxpayers’ money and try to see if there’s a cheaper way of operating the Harris County jails,” he said. “I think the best way to do that is to put the request for proposals out on the street to see who’s interested and what their proposals are.”

The resulting ideas could result in a limited contract — for food or medical services, for instance — or total privatization, Radack said.

Anybody got a phone number for Accenture handy? I’m sure they’ll be happy to do a proposal.

County Judge Ed Emmett said it never hurts to seek efficiencies, but said he has reservations about the proposal.

“I wouldn’t be in favor of moving forward at all until somebody comes forward and says, ‘This is why privatization would be good,’ and gives me some concrete examples,” Emmett said. “Clearly, it would be a massive change that would be undertaken neither lightly nor quickly. … It’s one thing to say we’re going to privatize a jail in a very small rural setting, but to talk about a jail like ours, where not only is it a jail but it’s currently the largest mental health facility in the state of Texas — this is a large undertaking.”

As Grits points out, any savings would likely come from the privatizer paying guards less. Hey, that profit margin has to come from somewhere. Given the poor history of the jail with things like inmate deaths, sanitation, and access to health care back when Radack’s buddy Tommy Thomas was running things, this does not sound like a recipe for success to me. This proposal is really just another attack by Radack on Sheriff Adrian Garcia, since Radack never gave a damn about costs before Garcia’s election in 2008. Hopefully, this idea will get the quick burial it deserves.

More on paying for roads and other forms of transportation

Given that the private toll road debate is set to gear up again in Texas, it is fortuitous that the Texas Public Interest Research Group, a/k/a TexPIRG, chose last week to release a report called Do Roads pay For Themselves? You can read the whole report, or you can skip to their press release for a preview of the answer to that question.

Among the findings of the report:

  • Federal gasoline taxes were originally intended for debt relief, not roads.
  • Highways, roads and streets have received more than $600 billion in subsidies over the last 63 years in excess of the amount raised through gasoline taxes.
  • The amount of money a particular driver pays in gasoline taxes bears little relationship to his or her use of roads funded by gas taxes. Drivers pay gasoline taxes for the miles they drive on local streets and roads, even though those proceeds are typically used to pay for state and federal highways.
  • Most state gas taxes are partly offset by subsidies that exempt gasoline from sales taxes.

“Texas needs to make difficult choices about how to fund our states’ troubled transportation system. The first task is to discard common myths about how roads are paid for,” said Slatter at TexPIRG.

The transportation finance system in Texas is broken. Officials at the Texas Department of Transportation (TxDOT) have admitted there isn’t enough money for basic road repairs. The process by which the gas tax is allocated is corrupt and lacks transparency.

“The state’s gas tax has been placed in a cookie jar and lawmakers help themselves to as many as it takes to pretend they’ve balanced the budget,” said Slatter. “The process discourages transparency or accountability.”

“This dishonest charade only encourages state officials to seek indirect and short-sighted methods to fund road projects,” Slatter continued. “In Texas, that means pushing the same unpopular private toll road agenda the state has been pushing for close to a decade.”

While toll roads are the closest thing to a user fee, in Texas, the state has turned to privatizing toll roads in order to fund most major highway projects. Privatization deals are fraught with problems and characterized by the same leveraging of debt, reckless shifting of risk and conflicts of interest that caused the financial meltdown on Wall Street.

“Looking ahead to the 2011 legislative session, Texas lawmakers will be faced with serious challenges to fund smart transportation projects,” concluded Slatter. “This report shows that highway spending has been wrongly portrayed as financially conservative. Sound transportation policy requires honest investment in transportation infrastructure that advances long-term needs, rather than continuing on the wrong path towards more debt and waste.”

I should note that there’s already some thought being given to alternatives to the gas tax, and as there has been many times before there’s talk about ending the diversions of the gas tax to other things like education and the Department of Public Safety. Given the extreme unlikelihood that a suitable alternate funding mechanism for DPS would be found this session, I wouldn’t bet on anything happening, but there you have it.

The question of tolls is addressed in a sidebar on page 10:

What About Tolls?

There are, of course, real “user fees” assessed on some American roads: tolls. Unlike gasoline taxes, tolls are true user fees—users pay them, non-users don’t, and users generally pay in proportion to the amount of the service they consume.

The problem with tolling, however, is that only a small portion of the nation’s highways could truly “pay for themselves” in this way. In other words, if the true cost of building, say, Boston’s Big Dig or a rural highway in Idaho were to be charged to its users, the tolls would be so high that they would deter some or all drivers from using them—defeating the purpose of building the highway in the first place.

The recent track record of privately financed toll roads in the United States—which includes the financial struggles of roads such as California’s SR-91 express lanes and Texas’ Camino Columbia toll road—underscores just how iffy a proposition it can be to self-finance modern highways with toll revenue—especially since the private companies have relatively high capital costs and must skim off a profit
share to investors.

The inadequacy of tolling for building a truly national system of highways was recognized by the architects of the Interstate Highway System. A 1938 federal report found that the amount of expected long-distance traffic was insufficient to support toll highways. In the 1950s, experts estimated that no more than 9,000 miles of highway (compared with the more than 3 million miles of highway in existence at that time) could support themselves with tolls.

Just some more data to keep in mind when and if the toll road issue resurfaces. The national PIRG organization has also touted this study, mostly as a way to advocate for a bigger and better funding mechanism for public transportation, a goal with which I heartily agree. Grist has more.

Will we re-fight the toll road privatization battle?

Maybe. I’m a little dubious, however.

Over a long July Fourth weekend two years ago, with time running out on a chaotic special session, the Legislature refused to extend authority for the Texas Department of Transportation to contract with private toll firms beyond Aug. 31, 2009.

Since then, the privatization of toll roads, long a centerpiece of Gov. Rick Perry’s ambitious and controversial transportation agenda, has been on hold in Texas, even as some grandfathered projects like Dallas’ LBJ Freeway and the North Tarrant Express continued.

Now the issue is set to be debated again as lawmakers return to Austin, ready to confront rising construction needs even as they grapple with commitments to keep taxes low and a frighteningly large budget shortfall.

Immediately after the last session adjourned, Perry’s chief transportation aide promised a hard push to restore the authority to enter into so-called comprehensive development agreements in 2011.

“Absolutely, the governor is going to keep pushing, pushing for putting this tool back in the box,” then-deputy chief of staff Kris Heckmann said.

And in an interview with The Dallas Morning News just before his re-election in November, Perry said he would ask lawmakers to renew authority for the state to partner with private toll firms.

“Now is not the time to leave any tool out of the box,” he said, noting the revenue shortfall that the Legislature will confront and the state’s growing list of unfunded highway needs.

I dunno. As I remember it, there were a lot of Republicans who didn’t much care for the Trans-Texas Corridor. Has that changed all that much since then? Plus, as the story notes, it’s not clear that the private investors will be lining up to provide the funding right now. The track record of private toll roads as an investment is spotty; it’s an inherently risky business, with a lot of cash up front, and the payoff is long term. I can certainly see there being support for some local projects, as indicated for North Texas, but color me skeptical that this is going to fly again as the ultimate solution for our future highway needs.

State officially begins the IBM termination process

Been a long time coming.

The state gave notice to IBM [last] week that it will terminate the troubled $863 million data center consolidation contract. The process could take a full two years as the Department of Information Resources finds companies to finish the mammoth job and they take over the merger of 28 state agency data centers.

In the meantime, the existing contract requires IBM to provide “termination assistance” by maintaining staffing and providing the necessary information to ease the transition, said Ed Swedberg, DIR’s deputy executive director.

This break-up was telegraphed months ago when DIR said it would restructure the project and seek new companies to do the work. The restructured project will be broken up into several smaller, more manageable pieces in contrast to the the huge IBM-led effort.

That rebidding process will hit a critical milestone in January when interested companies must submit their plans. The objective is to have the new companies selected in August.

Swedberg said that process is now far enough along that the state felt comfortable starting the two-year clock on dismantling its relationship with IBM.

The first signs of trouble were reported two years ago, and after an attempt to fix things in January, it all fell apart in a hail of fingerpointing, with the beginning of the end in August. Let’s have a moment of silence for yet another failed privatization project on Rick Perry’s watch.

We can learn from Indiana’s example

The state of Indiana decided a couple of years ago that it was paying too much for Medicaid, so they created to create a program called Healthy Indiana that provided vouchers for low income people to use to purchase private insurance. How has it worked out for them? About as you might expect, if you had any common sense.

First, many beneficiaries have to pay a lot more out of pocket than they would if they had traditional Medicaid coverage. Nonpayment has been the No. 1 reason for terminating beneficiaries from Healthy Indiana since the program began in 2008, with up to 35 percent of beneficiaries in certain income levels failing to make their first payment.

Second, providers serving Healthy Indiana beneficiaries have indeed been paid more than they would have if the beneficiaries had been covered under Medicaid. However, Healthy Indiana covers only about 44,000 Indiana residents, while more than 830,000 Indianans are uninsured. And in order to pay for the 44,000 Indianans in the Healthy Indiana Plan, the state took $50 million from funds that it uses to help reimburse hospitals for uncompensated care. In other words, 40 percent of the state’s uncompensated care funds were spent on only 5 percent of Indiana’s uninsured population.

But maybe this was still a much better deal for everyone. Maybe most of Indiana’s uninsured population doesn’t need health care, and those who do got a much better deal through the Healthy Indiana Plan than they would have if they’d been in traditional Medicaid.

Unfortunately, neither premise is correct. Healthy Indiana’s waiting list is longer than the number of enrollees it has. And uninsured Indianans, whether eligible for Healthy Indiana or not, continue to need health care. Meanwhile, for those actually in the program, the state paid $75 more per month in 2009 for the healthiest group of Healthy Indiana enrollees than it did for comparable adult Medicaid beneficiaries, even though Healthy Indiana beneficiaries are ineligible for many expensive services, such as maternity care, that Medicaid beneficiaries receive. That doesn’t include the cost that Healthy Indiana beneficiaries must pay out of their own pockets: up to $1,100 per year.

There is no evidence that Healthy Indiana beneficiaries are getting better care than Medicaid beneficiaries. However, the care they are receiving costs more, and leaves less for reimbursing uncompensated care for the remaining 95 percent of the uninsured.

But other than that, it worked great. This is the Republican way – make poor people pay more to get less so that Dan Patrick can get a property tax cut. The same basic ideas of vouchers for private insurance, in this case as a replacement for Medicare, is a cornerstone of Paul Ryan’s blueprint for cutting the national deficit. One must admit, simply not providing a needed service will allow governments to cut their expenditures. Too bad the need for those services doesn’t go away.

UPDATE: Corrected first sentence based on comments from Hope.

Bye-bye, IBM

Better luck next time.

The Department of Information Resources appears to be giving up on IBM — once and for all. The agency isn’t formally terminating its contract with the information technology and business consulting giant, which was supposed to coordinate the data centers and disaster recovery operations of 27 state agencies. But state officials sent a letter to IBM [Wednesday] saying they have no other choice to rebid the contract because they believe the company has failed to meet almost all of its obligations.

May the next outsourcer have better success. I mock, because it’s easy and fun, but outsourcing is hard. There’s a million reasons, and a million ways, things can go wrong. Still, it’s important to keep the mockery in mind for the next time some state official makes a grandiose pronouncement about how much money an outsourcing arrangement will save. Betting against it is the more likely winner.

One more thing about outsourcing in general, from the Statesman story.

IBM ran into problems from the very beginning, slowing progress and fueling frustration among the agencies. IBM has laid responsibility for the persistent problems at the feet of the participating state agencies, in particular, the Department of Information Resources.

“Ceding control of their individual (information technology) environments in favor of a centralized, common system was (and continues to be) unpopular with the constituent agencies, and without strong leadership from DIR, those agencies not only failed to cooperate, but in many cases actively resisted the project,” IBM wrote in a letter last week.

The main conceit of this kind of project is that you can save money by centralizing and standardizing. And that’s certainly true, although in some ways it’s basically a tautology. If you force everyone onto the same desktop, and you force all of your server-based applications onto the same back end, you will certainly spend less money on your IT. If that means that some specialized applications that a handful of people used to do their jobs are no longer available, or if it means that some specialized processes that were used to manage or present data are no longer allowed, well, that’s just the cost of saving money. One size seldom fits all, but you can pretend it does if it makes the bottom line prettier.

Anyway. Here’s a more recent letter from IBM disputing what DIR has to say. Again, I don’t know who’s right or wrong in this fight. I strongly suspect both sides have some validity to their claims. What I do know is that any outsourcing project is hard enough if everyone works together well. When communications break down like this, they’re impossible.

The State of Texas versus IBM: IBM responds

In July, the state gave IBM thirty days to respond to various charges relating to its ability to fulfill outsourcing contract obligations. IBM has now given its response.

In a letter released [last] Friday, IBM executive Cynthia McLean defended the company’s performance and said it will continue to meet with the agency to resolve issues in the 7 ½ -year, $863 million contract with the Texas Department of Information Resources.

[…]

Instead of a formal response, McLean said IBM would meet with state officials and attempt to hammer out a plan.

“As you know, we do not agree that IBM is responsible for the problems that you outline in that letter,” McLean wrote, adding that the company nevertheless recognizes that the information resources department, “is dissatisfied with the current state of the project.”

IBM said earlier that the department delivered too few of the state IT experts it promised and has balked at pushing 27 leery state agencies into consolidating their computer, Internet, printing and mailing services into two privately managed data centers.

Once again, we have to wonder if this marriage can be saved. And perhaps if it’s worth the bother.

In 2005, the Legislature forced more state agencies into the privately serviced IT pool. The new effort was supposed to save the state $178 million from April 2007, when IBM took over from previous vendor Northrop Grumman, to August 2014.

However, last year Grant Thornton, a consultant hired by the department, estimated that the state saved only about $10 million during the contract’s first two years.

Our Republican leadership in this state fervently believes that the private sector can always do better than government. I guess that’s true if you use government run by them as the basis for comparison. It’s certainly a low enough bar to clear.

The State of Texas versus IBM: Down dooby doo down down…

It just keeps getting worse, doesn’t it?

All the finger-pointing and fault-finding over the state’s troubled data center contract has technology analyst Tom Starnes wondering if Texas and IBM Corp. want this marriage to work.

“It’s like they don’t want to be together and that’s bothersome to me,” said Starnes, who has been researching public-private technology partnerships, including Texas’ $863 million data center consolidation project.

Breaking up, Starnes said, will do no one any good.

IBM’s business reputation would take a hit, Starnes said.

And the state would have to start all over again with another vendor to merge the data centers of 28 state agencies into two updated and secure facilities. There is no guarantee the next relationship will work any better, he said. In the meantime, the agencies are stuck in a technological limbo.

But a split might be imminent.

You know where I’m going with this, right?

You just can’t go wrong with Neil Sedaka, I always say.