Wisconsin To Stop Doing Cost-Benefit Studies Because They Find Public Is Better

Back in 2005,  Wisconsin state agencies were found to be spending more contracting out for services than if they were done by existing public employees.  In response the legislature, with bipartisan support, passed a bill requiring agencies to conduct a cost-benefit analysis before privatizing large public contracts.

By far the biggest state government outsourcer was and Wisconsin’s Department of Transportation (DOT).  Privatization has been proceeding rapidly at DOT for more than a decade.  Consulting payments soared from 8 percent of its budget in 1988 to a remarkable 63 percent in 2008.   In 2010 the state spent $308 million on highway engineering projects.  Nearly two-thirds went to consultants.

Numerous studies after 2005 confirmed that the DOT was wasting millions of taxpayer dollars by using private consultants.  A 2011 analysis by WISC-TV News for example, based on just a sample of DOT contracts found it had spent nearly $14 million more on highway engineering design projects because it outsourced them to private consultants.

So what has been the Republican dominated, let’s-make-sure-the-taxpayer-gets-the-most-bang-for-his-buck state government’s response?  To change Wisconsin’s law so that DOT will no longer have to do apriori cost-benefit analyses! The bill to accomplish this is steadily wending its way through the legislature.

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David Morris

David Morris is co-founder of the Institute for Local Self-Reliance and currently ILSR's distinguished fellow. His five non-fiction books range from an analysis of Chilean development to the future of electric power to the transformation of cities and neighborhoods.  For 14 years he was a regular columnist for the Saint Paul Pioneer Press. His essays on public policy have appeared in the New York TimesWall Street Journal, Washington PostSalonAlternetCommon Dreams, and the Huffington Post.