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Privatization's hefty price tag

There is good news and bad news from emerging research into child-welfare privatization. The good news is that privatization, done right, has the potential to offer abused and neglected children more protection than Florida's traditional state-run system. The bad news is that privatization is proving a far more expensive proposition than state leaders had expected.

If Gov. Bush and Florida lawmakers remain intent on privatizing child welfare statewide by 2003, as current law now provides, they need to acknowledge that fiscal reality and be prepared to fully fund this massive, fundamental change.

The latest study to document the promise _ and heavy price tag _ of privatization comes from the Office of Program Policy Analysis and Government Accountability, an independent research arm of the Legislature. In a recent report, OPPAGA assessed early results from four private coalitions that for several years have managed protective, foster and adoption services for abused and neglected children in their counties.

The results were mixed but generally encouraging. Most of the coalitions contacted at-risk children more quickly and visited them more often than had state workers previously, and most foster parents and former state employees rated the private system better overall. In Sarasota County _ a high-income area with well-organized children's services, not necessarily representative of the rest of the state _ private caseworkers have made dramatic strides in cutting the length of foster-care stays and in increasing adoptions.

But achieving those preliminary results has not come cheaply. Uniformly, the cost of providing services has outpaced even the most generous estimates.

Officials in Kansas could have told Florida it would. The primary model for Florida's "community-based" move is Kansas, which privatized most child welfare services in 1996. Since then, Kansas lawmakers have put an additional $80-million into the work of the private providers, and state funding continues to grow faster than the caseloads. That fits the national pattern. In a number of states and counties that have privatized child welfare, overall spending has increased, according to the U.S. General Accounting Office.

The added expense is even more stark in the few Florida counties, including Pinellas and Pasco, where sheriffs have taken over child-abuse investigations. Sheriffs' investigations are 39 percent costlier than those performed by state investigators, according to OPPAGA and a recent Senate Appropriations Committee report. Florida lawmakers would have to allocate millions in start-up dollars _ plus an extra $32-million every year _ to fund a transfer to sheriffs statewide. Overall, the sheriffs' success has been modest. The cost has not.

When Florida embarked in 1998 on statewide privatization, many lawmakers were motivated by a desire to control costs. But the mounting evidence suggests that privatization is no money-saver, at least in the short term. Since then, the Legislature has, with Gov. Bush's urging, invested more in child welfare and extended some fiscal and legal protection to private providers. Those constructive early steps should be viewed as Florida's down payment on privatization, not its final settlement.