It’s just good old privatization. What’s the problem?

18 Nov 2010 03:38 pm
Posted by: Donna

The AZ Republic is running a week long series wherein they hyperventilate over the state pension system. It’s even got a nifty logo:


Ooh, that has me deeply concerned. The deal in today’s installment is that some teachers are teaching in schools as contractors while also drawing retirement pay. And because they are on retirement the teachers and their employers are prohibited from contributing into the retirement system, meaning less money going into the pension fund that has to pay future retirees. Is this a problem? Sure. Is the article overstating the magnitude of it? Yep. But what’s frustrating is how the real cause of this particular problem – privatization – is ignored in the rush to attack teachers and other public employees.

The AZ State Retirement System, unions, and retiree groups worked on legislation to modify the system so that you wouldn’t have people retiring and then immediately returning to work in the exact same job. The bill, HB2390, was sponsored by Rep. Tom Boone (R) in 2010 but never made it out of committee. What happened to that legislation?

The official story is that the budget crisis stopped the bill from moving forward. But people close to the situation will tell you that a Republican lobbyist named Kevin Demenna got the bill killed on behalf of Smart Schools Plus, the private company he represents. (The Republic story reports that the company now supports the changes.)

This is yet another demonstration of the gaping disconnect between the rhetoric of conservatives and the reality of their policies. They promote privatization as a way to streamline big, bloated government and improve services. But more often than not the privatization schemes are conduits for former Republican politicians and lobbyists to enrich themselves with no measurable improvement to the government function they took over and often a decline in the quality of the work (see: private prisons). Meanwhile, the demonization of government workers and unions continues apace. A mostly unsuspecting public buys it because they’ve been manipulated for 30 years to see some vague amorphous entity known as “government” as the source of most problems.

Privatization is popular because it sounds free market-y. And based on several conversations I’ve had with voters while working on campaigns, it seems that a lot of people think that if a government function is privatized it no longer costs the taxpayers anything. The cost of that function magically disappears from the public ledger while those clever and sensible business people transform it into a self-supporting and profitable venture. Conservatives are especially prone to have this blind spot, as I’ve discovered when I try to explain to them how funneling billions to Halliburton in no-bid contracts is not the most optimal use of tax dollars. I might as well be talking to a tree stump. It doesn’t seem to occur to them that money going to defense contractors is tax money just like the money going to schools and social services. This public ignorance is what enables lobbyists and assorted scam artists to concoct schemes to bilk taxpayers that they call “reform”. Generally speaking anything called “reform” of a public institution can usually be defined as “rich people have figured out yet another way to get their hands on public money and ensure that we the people get even less of the service we’re paying for.”

We keep hearing how drastic budget cuts need to be made to get Arizona out of the hole we’re in. We must examine all programs and determine where waste can be eliminated, we are told. May I suggest starting with a thorough evaluation of every Republican privatization boondoggle currently operating in AZ? Not that it’s likely to happen but a Diva can dream.


  1. Comment by Neil on November 19, 2010 9:01 am

    Whether or not public employee pensions should be privatized is not the issue.

    The issue is that ASRS is currently running a massive deficit. It is paying out $2 billion while only collecting $1.6 billion in contributions.

    Who is on the hook for the shortfall once the reserve funds are tapped?

  2. Comment by Alan Scott on November 19, 2010 6:21 pm


    With all due respects, you seem to be woefully misinformed about the magnitude of the unfunded pension liabilities for public school teachers. Most Liberals are.

  3. Comment by Cheri on November 19, 2010 10:11 pm

    Donna….Wow! That’s rich…Alan says we liberals are woefully misinformed, but then proceeds to give no details backing up his statements regarding unfunded pension liabilities….damn. Where have I seen THIS before???

  4. Comment by Alan Scott on November 20, 2010 9:55 am


    ” Donna….Wow! That’s rich…Alan says we liberals are woefully misinformed, but then proceeds to give no details backing up his statements regarding unfunded pension liabilities….damn. Where have I seen THIS before??? ”

    In your case, when I said ” woefully misinformed ” I was understated the facts.

  5. Comment by State Rep. John Kavanagh on November 22, 2010 10:34 pm

    Smart Schools Plus is not privatized education. Private and parochial schools are privatized education and charter schools are semi-privatized education. Smart Schools Plus is a gimmick that public schools use to cut costs and sometimes reward long-time public school teachers. When we tried to end the program, the loudest protests came from the public schools who created the program and save money using it to the detriment of the pension system and new young teachers who are deprived of job openings to fill.

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