The government of Maryland is being rented, leased and outright sold to the highest bidder:
The $200 million Seagirt Marine Terminal is operated by a private company that's being paid $6 million a year to do it.
Most of the financial examination of insurance companies that do business in Maryland is conducted by private companies.
Almost $200 million in annual contracts to run the state's developmental disabilities programs are held by the private sector.
Even the people who administer employment exams to state job applicants are not themselves employed by the state.
These are the fruits of an attitude that is fast gaining ground in Maryland. In an effort to improve efficiency and save money, the state is willing to consider bringing free-market forces to bear on just about anything the government does, even areas traditionally considered basic state services such as education, security and snow removal.
This effort has been spurred by the creation last year of the Governor's Advisory Council on Privatization. The council's job is to solicit ideas from companies, and encourage state agencies to look for privatization options wherever feasible -- not by selling off state assets, but rather forging partnerships with private businesses. And if those companies can make a profit, more power to them.
"What's happened in this fiscal climate is that the voters and the taxpayers . . . have said, 'We want more efficient government," said Mark L. Joseph, chairman of the advisory council, and president of Yellow Transportation Inc. in Baltimore.
"You do that by not looking at it from a protectionist standpoint of saying, 'We're going to protect the [state] jobs because they're there,' " Mr. Joseph said.
For businesses, this movement is a bonanza. The privatization council has identified more than 30 projects that were targeted for a shift to the private sector in the last year alone. Another 50 or so contracts -- some ongoing and others one-time -- are being considered, covering everything from managing the agriculture department's fleet of vehicles to running a recreation area at Fort Tonoloway State Park in Washington County.
"We heartily support it," said Gene Bracken, spokesman for the Maryland Chamber of Commerce. "Most of our members would argue, with some exceptions . . . that business can do a better job than government most of the time."
But some of the opponents are incensed. They include state administrators whose turfs may be targeted, state employees afraid for their jobs and the standard of living in their communities, and some citizens who depend on state services, whether or not they turn a profit.
They point to some recent fiascos that have eroded public trust in privatization. Baltimore County Executive Roger B. Hayden may have a tougher re-election bid because of the mixed job some private contractors did in Baltimore County snow removal. And the failure of a company to maintain security at the Charles H. Hickey Jr. School for juvenile offenders led the state to take the facility back in 1992 (the contract was later given to a second company, and the complaints have since dropped off).
Privatization will "work only if as a society we're willing to accept a lesser quality of service," said John F. X. O'Brien, executive director of the Maryland Classified Employees Association, which represents about 25,000 mostly state employees.
Mr. Joseph's response is that to a surprising degree, it's already working. His council's 1993 report on privatization tracked almost $11 billion in state spending last year (out of a total $13 billion operating and capital budget). The report found that $2.5 billion of the money detailed in the study was spent directly on private companies; and much of another $3 billion that flows to local governments and institutions also ends up in private hands.
The story is much the same across the country. Juvenile justice systems in more than a dozen states have been privatized. Some 15 percent of the nation's auditoriums and public arenas are run by private companies, including the USAir Arena in Landover. And privately built highways and toll roads are underconstruction or consideration in five states.
Private companies have made deeper inroads in some Maryland agencies than others. For instance, they received less than 10 percent of the nearly $650 million public safety operating budget last year. But close to three-fourths of the health department's $2.8 billion operating budget was spent on the private sector.
Privatization's fans, Mr. Schaefer among them, include those who preach the virtues of "reinventing government," as well as the companies looking to crack this new market. In a chapter he contributed to a forthcoming Temple University textbook, Mr. Schaefer explains the logic behind the drive to downsize government, a movement toward what he calls "one sector." "Government, according to the 'downsizer's' refrain, should be run like a business," he writes, "and services that could be turned over to the private sector should be turned over to the private sector."
While the state budget has grown from about $9 billion to $13.3 billion during Mr. Schaefer's term, the number of state employees spending that money has waxed and waned. The work force started at 68,728 in fiscal 1987, hit a peak of 73,528 three years later and had fallen to 68,244 last June. Many of those employees have been replaced by private contractors.
The campaign to join those private sector servants generated some heat last week in a comfortable conference room at the airport, where a succession of businesspeople trooped before the governor's privatization council to sell their wares.
Bethesda developer Larry Demaree proposed to run food and retail concessions at large state facilities, noting the success he's had at National Airport in Washington. Lisa Renshaw, president of PENN Parking in Linthicum, argued that it's time for a private firm to raise public money by operating Maryland's rail station parking lots.
"Government by its very nature is unable to make the hard decisions required to achieve economic efficiencies," declared Weldon M. Howard, whose company, Areawide Security Services Inc., would like to provide security guards at state buildings.
"It cannot fire incompetent workers, or hire productive ones," he said. "It cannot react quickly to the marketplace."
The meeting went along quietly until late in the afternoon when a lawyer who represents an association of private bus companies suggested handing over several inter-city bus routes to her clients.
At that point, James W. Allen Jr., business agent for Local 689 of the Amalgamated Transit Union, stood up in protest. He criticized private
bus companies for avoiding the less profitable inner city routes. And then he got to the point.
"The bottom line is your companies will put our people out of work, and they're doing it," Mr. Allen asserted. "You can't say that the union doesn't lose jobs."
Union opposition is probably the most formidable obstacle to privatization. And because many of the jobs that top the list of candidates, such as bus drivers, maintenance workers and security guards, are held by minorities, the debate cannot avoid a racial undertone.
For that reason, said University of Wisconsin professor Donald F. Kettl, governments must be sensitive to the potential job dislocations, and resulting political pressures, when they try to privatize.
Even more important, he insisted, governments must not lose control over their basic planning and assessment abilities, or fall victim to one powerful vendor.
Mr. Joseph, who chairs the privatization council, maintained the state can avoid those pitfalls.
"The proper stance is to say, 'Wait a second, no one said the government can't compete with the private sector,' " Mr. Joseph explained. "It's to say, 'How can we make government more competitive?' And the only way to do that, I think, is to create competition for the government."