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E-mail Print Wally’s World, or, The Waste Land
Capital Ideas
By: K. Lloyd Billingsley
1.25.2002

Capital IdeasCapital Ideas

SACRAMENTO, CA - The big stories about government waste at the Pentagon, HEW, HUD, and, of course, the United States Department of Education, whose entire existence is a waste, make for the best news copy. This means that some lower-level stories, with more shocking examples of government waste, don’t get as much ink as they should. Consider two cases, beginning with the city of Folsom, a short jump from the capital.

The famous Folsom Prison is there all right, along with a small prison operated by the city. It houses only 380 inmates but last year director Wally Smith was paid $163,922, more than any warden of any prison in California, including 6,500-inmate San Quentin. Mr. Smith, who conveniently retired when the state Inspector General began an audit last year, had plenty of time to spend the money.

He came in at 10 a.m. and left at 2 p.m. but still managed to save room for an extended lunch. Perhaps that is why not much got done. The audit revealed that the prison’s front door could not be locked and security cameras did not work. But for a time security was tight enough to keep investigators off the premises. Expenses included $600 for a uniform, for a canteen manager who, it turns out, does not wear a uniform at all. But the city hired lawyers to battle the state for even more money to run the prison, which may be shut down.

Meanwhile, after four bond and tax issues that raised more than $300 million, the San Francisco school district could not finish, or in some cases even start, the very projects for which the bonds were issued. In fact, they were using money from the most recent bond measure to pay for projects authorized by the previous ones, kind of like a Ponzi scheme, or Social Security. It seems that the district spent about $100 million of the bond money on salaries, benefits, and perks. One facilities manager was getting $1000 a day, about twice as much as the governor of the entire state. Some employees are under indictment and the district facilities are in a shambles. But not to worry. Superintendent Arlene Ackerman has proposed fix it all through another bond issue.

A common feature of these cases is a revenue stream with a source in the government. In this system, workers rise to their highest level of incompetence, and stay there. Whenever problems arise, the cry goes out for more money.  There is a better solution - privatization.

School fraud and corruption could be cured if parents were empowered to send their children to the school of their choice. Private companies such as Edison are proving that they can manage schools better than the government monopoly system. Many school services could also be done more cheaply and better by private companies. And the case for privately run prisons is gaining support, and will get more after the Folsom fiasco. Most private companies would install a front door that locks.

Privatization tends to be supported by taxpayers in favor of fiscal responsibility and opposed by those who profit from the current system. Level with me. If you were Wally Smith, bagging $163,922 a year for less than four hours work a day, would you want a private company to take over operations?



K. Lloyd Billingsley is editorial director of the Pacific Research Institute in San Francisco. He can be reached via email at klbillingsley@pacificresearch.org.


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