Privatization oversight advanced by the Louisiana Senate _lowres

Advocate staff photo by STACY GILL -- Rep. Kenny Havard, R-Jackson, in February discussing state budget issues with Zachary Rotarians.

Louisiana legislators would get greater say in the contracts that the administration enters to privatize government functions under a bill approved Saturday by the Senate.

House Bill 137 needs to return to the House for its agreement to a few amendments added during the measure’s trip through the upper chamber. But sponsor Rep. Kenny Havard, who watched the 32-3 vote from the side of the Senate chamber, said smiling that this vote is the furthest the measure has gotten in three years of trying.

He didn’t oppose the Senate’s amendments and projected swift confirmation by the House of the changed wording. The House approved the measure May 20 on a vote of 93-0.

But when it gets to Gov. Bobby Jindal, while hopeful, Havard is not as optimistic.

“They’re the only ones who put in cards against the bill each time it was heard over the last three years,” Havard, R-Jackson, said.

Asked about the governor’s intentions and possible objections, Jindal’s spokesman, Mike Reed repeated in an email his response to all similar queries about legislation headed to the governor: “We will review the bill.”

HB137 would require that agreements with the private sector — valued at more than $5 million — that would take over tasks being done by government would first have to go through the competitive bidding process; require the legislative auditor to analyze the costs, including the so-called “legacy” expenses, such as insurance and pensions of state employees; and require legislative oversight of the contract. The bill also would require the records related to the privatization contract be available under the state’s public records law.

The Legislative Fiscal Office reports, for context, that the state has 44 contracts valued at more than $5 million. HB137 would not apply to existing contracts.

“Everybody is fed up. They know we should have reviewed those contracts” already entered into, Havard said after the vote. “We’ve wasted a lot of money.”

During Senate debate, Sen. Fred Mills, R-St. Martinville, ticked off a list of contracts that hired private contractors to perform previously public services. He then mentioned those that have raised significant questions.

The contracts LSU entered to hire private administrators to run the state’s charity hospitals have ended up costing about twice what was promised initially. And the state spent millions of dollars surrounding the cancellation of a contract with CNSI, which would have handled Medicaid contracts, after state and federal grand juries investigated the awarding of the deals and former Department of Health and Hospitals Secretary Bruce Greenstein was indicted on perjury charges.

“Looking back, if this legislation would have been in place, maybe we’d be in a different situation now,” Mills told his colleagues.

Jindal’s Division of Administration estimates the cost of hiring a consultant to complete the required analysis on the privatization bid would be approximately $300,000 per study, according to the fiscal note. But the Legislative Fiscal Office reported its belief that the analysis could be completed by current state employees.

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