Maryland legislators, impatient with the state's difficulties in collecting child support payments, want a private company to take over some of the work.
A controversial proposal to privatize all child support collection efforts in Baltimore and one county, to be designated later, already has passed the House of Delegates. It will be heard by a Senate committee Wednesday, just five days before the assembly is to adjourn.
Top officials at the state Department of Human Resources are worried that the proposal is too broad and moving too fast. And state employee unions are howling about the potentially harmful effect it could have on the jobs, salaries and pension benefits of hundreds of state workers.
Opponents claim the sudden move to turn over child support collection efforts to a private company is being driven in part by former Senate aide John R. Stierhoff, now a lobbyist for Lockheed Martin Corp.
The defense industry giant has diversified in recent years and now has a subsidiary that handles child support collections in other states. It is interested in doing the same thing here.
House Bill 1177, which passed the House last week, 92-40, would direct Human Resources Secretary Alvin C. Collins to turn over to a private contractor "all aspects of child support enforcement functions of the department" in Baltimore and in one county that he would select. The pilot project could not begin until July 1996.
The state collects and disburses child support payments for people whose court orders are referred to the state or who ask for help in enforcing such orders. But the contractor's responsibilities would go well beyond just collecting and disbursing the payments.
The firm also would have to locate absent parents, establish the paternity of children who need child support and go to court on behalf of parents to obtain support orders or to modify existing ones.
The legislation also would direct Mr. Collins to designate another county to serve as competition for the two privatized jurisdictions for comparison. The secretary would be permitted to offer state employees there private-sector style incentives in an effort to make the competition more even.
The theory behind the proposed legislation is that too many parents -- especially fathers -- abdicate their responsibility for their children, often forcing the other parent to turn to government welfare programs for financial support. If more money was collected for child support, the state would pay less to welfare recipients, backers of the bill say.
"There is an enhanced view that we should have individual responsibility by parents, generally the father -- the 'deadbeat dads.' But that is not happening," said Del. Donald C. Fry, the Harford County Democrat who sponsored the bill.
The move toward privatization of child support collections, while consistent with the national trend to "reinvent government," would not be the first time the state has turned to the private sector for help.
In recent years, the state has hired private contractors to run Maryland's juvenile delinquent detention center in Baltimore County and has turned the University of Maryland Medical System into a private, nonprofit corporation.
Employee unions objected to those privatization efforts, just as they are now lobbying hard against the child support legislation.
It is the child support collection rate, coupled with concerns about the cost of welfare programs, that has caught lawmakers' attention.
Last year, the state was collecting payments from only a third of its 255,000 cases statewide. In Baltimore, the collection rate was just 14 percent, according to state statistics.
Secretary Collins said his department is not opposed to experimenting with hiring an outside firm to try to improve collections. But he expressed concern that the experiment would begin in Baltimore, which, with 138,000 cases, has about half the state's caseload.
Human Resources officials say Baltimore is one of the most difficult jurisdictions in which to collect the payments because so many of the city's single parents are poor and their partners often are as well.
Secretary Collins said the department has not had a chance to review how well private collection efforts have worked in other states. "It's a question of how soon and where you implement the pilot," he said. "We haven't even seen a feasibility study."
The legislation would require a contractor to offer state employees who now do the work a job for at least two years at "terms deemed by the secretary to be fair and equitable" and at a "benefit level comparable to the contractor's other similarly situated employees."
Such assurances have not been enough to placate the 350 or so state employees in the city whose jobs are in jeopardy, nor their union representatives. They worry that veteran employees, some them nearing retirement, could find themselves out of work once the job guarantee expires. Those who do stay on, they say, will almost certainly end up with lower salaries and will lose generous state pensions and other benefits.
Andrea Hunt and Sue Esty, lobbyists respectively for the Maryland Classified Employees Association and the American Federation of State, County and Municipal Employees, say they believe Lockheed is the moving force behind privatization, not just a desire by lawmakers to improve collections.
"Lockheed is the only company that has been lobbying in Annapolis for this legislation. They're the only one that testified for this legislation. They're the only ones here that are visible," said Ms. Esty.
House Appropriations Committee members were "referring to [the bill] as the 'Lockheed solution,' " she said. Mr. Stierhoff said Lockheed performs child support collection duties in 15 states, but said Delegate Fry's bill was "not put in on behalf of Lockheed."
Even if the bill passes, said Mr. Stierhoff -- a former top aide to Senate President Thomas V. Mike Miller Jr. -- there is no guarantee Lockheed will bid on the project, although he concedes the company's obvious interest. As a private company, he said, Lockheed is more likely to focus attention on cases in which collections are not currently made.
By contrast, he said, state agencies tend to focus on "assuring a certain level of service for people already receiving money -- their check is late, or the check is not for the right amount. A lot of time is spent correcting problems."
Private companies, he said, have advantages because they can offer their employees better incentives to succeed and can respond more quickly to changes in caseloads or the need for computer equipment or personnel because they are not constrained by the budgetary, procurement and hiring and firing restrictions faced by public agencies.
"There are some things that the private sector can do better than state government, and this is one of them," Mr. Stierhoff said.
The privatization effort comes as the Department of Human Resources is struggling to make a mammoth computer system that handles payment of child support checks work in Maryland's largest counties.
Officials had to roll back their schedule for bringing up the Client Information System after two attempts in Montgomery County, the first large county to go on-line, resulted in delayed checks and inaccurate data. They have said other large jurisdictions would not join the system until those problems are fixed.