By Nathan Newman and Gordon Lafer

In order to comply with new transparency requirements under the American Recovery and Reinvestment Act (ARRA), state governments across the country are scrambling to report to the public how they spend recovery dollars. In just the last week, the White House’s count of state transparency websites has jumped from 10 to 25. Unfortunately, none of the state and government websites that are accounting for the recovery funds report the number of jobs created by private contractors -- but without such data, the sites are close to meaningless.

Fortunately, Oregon is leading an effort to require contractors to report the number of jobs they create, as well as the hours worked and wages received by their employees. These proposed requirements would provide Oregonians a website that ensures their tax money actually goes toward creating quality jobs.

The benefits of such a site are clear. If contractors are creating quality jobs with recovery money, they will get more. If they aren’t, the state can stop funding them and target resources to contractors that are creating jobs. If we are serious about using recovery dollars to turn the economy around, we must make it a top priority to adopt these new standards.

Moreover, such standards will make Oregon a model state in terms of the criteria for receiving federal stimulus funds. The section of ARRA outlining the federal Accountability and Transparency Board requires that, as a condition of further funding, all state governments report quarterly on the number of jobs created by contractors.

Finally, such accountability is clearly demanded by the public. In a January poll by Lake Research Partners, 76 percent of Americans said they considered it “extremely” or “very important” that state governments maintain websites tracking “what companies and government agencies are getting funds, for what purposes, and the number and quality of jobs being created.”

If Oregon lawmakers move to enact such provisions they will be in a strong position to fund more projects when further federal funding becomes available. Without such standards, they will have hampered the state’s ability to attract federal funds, and will have disappointed the voters who demand accountability for how their tax dollars are spent -- now more than ever.

The need for such standards has never been more urgent. Transportation and health and human services projects are two of the central focuses of federal recovery funding. But both of these are areas in which public work -- in states across the country -- has increasingly been outsourced to private contractors, often resulting in little or no job creation and waste of taxpayer dollars.

In 2006, for instance, the private firm Accenture suffered a database crash that caused 30,000 children to drop off the rolls of Texas’s Children’s Health Insurance Program. Last year, Indiana terminated a deal with IBM to deliver its welfare benefits after 59 of the state’s 92 counties claimed it had become more difficult for citizens to obtain benefits. In Massachusetts, outsourcing oversight of the Big Dig construction project to Bechtel has resulted in millions of wasted taxpayer dollars.

Here in Oregon, the state’s Department of Administrative Services estimates that Oregon spent over $4 billion on private contracts in just the last 22 months, with approximately 40 percent of Portland-area Multnomah County’s budget going toward private contracts. With such colossal failures piling up in other states, Oregonians must be sure they are receiving quality service and quality jobs in exchange for the huge sums provided to contractors.

As they move to direct over $6.48 billion in recovery funds toward “shovel-ready” projects in the next few months, Oregon lawmakers have a rare opportunity to make a huge difference in the state’s economy, at a time when it is desperately needed. By insisting that contractors have the same accountability as government agencies, lawmakers can put measures in place to ensure that money goes into the hands of the hardworking families who have been hardest hit by the recession.

If Oregon legislators pass the proposed provisions they will have safeguarded the interests of all Oregonians, and made the state a model for the country as a whole.
Newman is Interim Executive Director of the Progressive States Network. Lafer is a professor at University of Oregon’s Labor Education and Research Center.
Copyright (C) 2009 by the American Forum. 3/09


Anonymous said...

It's good thought which will develop resources, But govt. need to take part of it...

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