Michigan local governments largely satisfied with privatized services

November 13, 2014
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ANN ARBOR—Despite some concerns about a lack of cost savings and negative experiences with privatized services, nearly three out of four local officials in Michigan are satisfied with the outcomes, according to a poll by the University of Michigan’s Ford School of Public Policy.

In Michigan, 65 percent of local governments outsource some service. Key drivers include wanting to decrease costs and a lack of in-house expertise.

“Satisfaction with outsourcing is high among local leaders of all party identifications: Republican, Independent and Democratic,” said Tom Ivacko, administrator and program manager for the Ford School’s Center for Local, State, and Urban Policy.

Increases in privatization appear to be slowing down. The poll found that just 10 percent of Michigan jurisdictions are planning new or expanded privatization efforts, the lowest level since 2009. Plans to increase outsourcing peaked at 18 percent overall in 2010 at the height of the statewide local government fiscal crisis.

The poll, part of the Michigan Public Policy Survey series at the Center for Local, State, and Urban Policy, reports:

  • For jurisdictions that outsource, the most frequent areas of service or operations privatized include attorney/legal services (83 percent), engineering (51 percent) and waste/recycling (45 percent). The least frequent areas are parking meters (2 percent), tax collection (3 percent) and health and human services (7 percent).
  • Just 25 percent of jurisdictions conduct evaluations of their outsourcing.
  • Statewide, 15 percent of officials from jurisdictions that outsource reported bringing some service(s) back in-house.

The study, conducted in April-June 2014, involved surveys sent via hardcopy and the Internet to top elected and appointed officials in all municipalities in Michigan. A total of 1,344 jurisdictions returned valid surveys, resulting in a 72 percent response rate. The survey had a margin of error of 1.4 percentage points.

 

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