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					                        the jourNal
                  of the jaMes madisoO institute

                                              summer 2001
                                               number 17


Message from the Publisher — J. Stanley Marshall . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2



                                          CoVer Story
Rhetoric and Reality in the Teacher Unions — J. Stanley Marshall . . . . . . . . . . . . . . 4
   A report on a study of teacher union contracts and collective
   bargaining in Florida school districts.


                                              articLes
Floridians Look Back at Election 2000
and Look Forward to Major Reforms — Susan A. MacManus . . . . . . . . . . . . . . . . . . 10
    The last election uncovered a plethora of inadequacies
    and the Florida Election Reform Act of 2001 was
    “must pass” legislation.


The Revolution in Privatization — Lawrence W. Reed . . . . . . . . . . . . . . . . . . . . . . . . . 20
   Privatizing is happening at a feverish pace and the more it is
   done, the more we are learning how to do it right.


Dodging the Bullet: Florida Nursing Homes
Get Eleventh-Hour Litigation Relief — Peter Doherty . . . . . . . . . . . . . . . . . . . . . . . . . 25
   With time running out, the 2001 Florida legislature took
   decisive steps to save the state’s nursing home industry.




     The James Madison Institute is a Florida-based nonpartisan, nonprofit research and educational
     organization dedicated to advancing such timeless ideals as economic freedom, limited government,
     federalism, traditional values, the rule of law, and individual liberty coupled with responsibility.
                                 the jourNal of the james MadisoO institute


The Journal is a quarterly magazine
provided to members and


                                            Message
supporters of The James Madison
Institute, to members of the Florida
Legislature, and to others who
share the Institute’s conservative
philosophy. The Journal is intended            from
to keep Floridians informed about
their government, to help advance
practical public policy solutions,
and to recognize individuals who
                                          the pubLisher
exemplify civic responsibility,
character, and service to others in           j. stanley marshall
their lives.
Publisher    J. Stanley Marshall
Editor       Rosemary Dupras
Designer     TypeStyle Graphics Studio
Reprint permission. Ask in writing
and allow at least a week for a reply.
Replacement copies are available
                                         P    eter Jennings, in the April 3rd edition of ABC-
                                              TV’s World News Tonight, reported on the short-
                                         age of substitute teachers in our public schools. On
upon request.
Membership information appears
                                         any given day, he reported, five million students
on the back cover.                       require a substitute—that’s because 10 percent of the
Contact us. We welcome comments,         teachers have taken the day off, which is almost three
suggestions, and questions, and          times the rate of absenteeism for any other profes-
value the partnership we have with
our members.                             sion. Pay for substitute teachers is notoriously low in
Contributions are tax-deductible to      Florida, as in most other states, and there are no
the full extent of the law.              fringe benefits. Jennings told of Ellen Watkins, a
Board of Directors                       19-year-old high-school graduate in Fort Myers who
Mallory E. Horne, Chairman;
J. Stanley Marshall, Founding            had been hired as a substitute. The report went on to
Chairman; Edwin H. Moore,                say that Ms. Watkins was reported to be a good
President; Carlos J. Alfonso;
Hoyt Robinson Barnett; Chris             teacher despite the fact that she had no formal
Corr; T. Martin Fiorentino Jr.;
George W. Gibbs III; Linda Gill;
                                         professional qualifications and was not, of course,
William G. Harrison Jr.; Michael R.      state certified. We are all familiar with classes taught
Hightower; Alfred Hoffman Jr.;
Jeffrey F. Jones; James M.
                                         by students—sometimes students in the same classes
Lombard; Patrick K. Neal;                as the other children they are teaching, and doing an
Jon B. Rawlson; John D. Rood;
Thomas W. Sylte; Rebecca Walter;         excellent job. Instructions in computer technology
Preston A. Wells Jr.                     come to mind, an area in which 12-year-olds may
                                         know more about the subject than any of the teach-
                                         ers in the school and who, despite no certification,
                                         are good teachers.
                                           While ABC-TV’s focus was on substitute teachers,
                                         the report brought to mind the extent to which the
                                         schools are denied the services of well-qualified
    The James Madison Institute
           P. O. Box 37460
                                         teachers because those people lack state certification.
     Tallahassee, Florida 32315          While there has been some loosening of certification
        Voice 850-386-3131
     Toll free (1) 800-376-1119
                                         requirements in a few states, the education establish-
         Fax 850-386-1807                ment, overall, has steadfastly kept a tight rein on the
   Web www.jamesmadison.org
   E-mail jmi@jamesmadison.org           formal requirements, and the teacher unions are the


[2]                                                                                   summer 2001
                    the jourNal of the james MadisoO institute


core of the problem, as they are with       year’s merger of the two teacher
most other education reforms.               unions—the state affiliates of the
  The lead article in this issue            NEA and the AFT—means that any
of The Journal reports on a just-           Florida teacher who joins the FEA
concluded study of collective bar-          automatically becomes an affiliate of
gaining in Florida’s school districts.      the AFL/CIO. And that may not set
The study dealt with 12 issues that         well with many teachers who still
the study’s author, a                                    think of themselves as
widely respected authority                               professionals.
on collective bargaining in                                 Public education in
America’s public schools,         The teacher            Georgia has made great
recommends the Florida                                   strides in recent years.
                                  unions are the
legislature address.                                     Tax support for the
Teacher certification was         core of the            schools has surpassed
not one of those and it           problem, as they Florida’s, and teachers’
didn’t make the cut only          are with most          salaries are higher.
because there are other           other education        Georgia does not permit
issues directly tied to union                            public sector bargaining
intransigence. Substitute         reforms.               and, while the teacher
teachers and their place in                              unions exist, their mem-
our children’s schooling                                 bership is about half that
deserve more attention                                   of the nonunion profes-
from the education establishment            sional teacher organization, and the
than they have received. Try asking         unions play a minor role with the
students of your acquaintance about         Georgia legislature.
the people who substitute in their            The role of the newly merged
classrooms, as I have done. That can        teacher union in Florida is yet to be
be a sobering experience.                   determined and the state legislature
  The future of the teacher unions is       is justified in examining closely its
a topic of great interest in much of        influence on the extent to which it
the country. Internal union dissent         affects the quality of teaching and
in many states is strong and union          learning in our schools. The issue is
leaders in several states have begun        one that merits the attention of all
to reexamine the role of the unions.        Floridians.
The central question in Florida is
whether the Florida Education
Association (FEA) will become more          NOTE: A complimentary copy of the
of a professional organization or will      Collective Bargaining in Florida
remain a labor union, much like its         Public Schools report can be obtained by
sister unions in the AFL-CIO. Last          calling or writing the Institute.




summer 2001                                                                       [3]
                         the jourNal of the james MadisoO institute



                                      COVER STORY




             Rhetoric and Reality
            in the teacher unioNs
                              by j. stanley marshall



                                T     he teacher unions have been prominent in the
                                      national news lately. In Hawaii, the unions have
                                settled a bitter and costly strike that included profes-
                                sors in Hawaii’s state university system. Many Ameri-
                                cans believe teachers—like firefighters and police—
                                should not go out on strike, and the fallout from this
                                one may cost the unions dearly. It has been described
                                as the most extensive action of its kind in the history
                                of American public education. The policies and
         Twelve concerns        practices of the teacher unions have been under
             Miami-Dade
          about collective
           County Mayor
                                increased scrutiny and their role in setting public
          bargaining with       policy in education is being more closely examined.
             Alex Penelas
              state school        Here in Florida, the newly merged union (the state
        nearly got voters
      boards along with
               to approve       affiliates of the National Education Association [NEA]
      recommendations
               a one-cent       and the American Federation of Teachers [AFT]
            for legislative
       “Transit Not Tolls”      combined last year) has resisted several attempts by
                correction
        referendum until
                of abuses.      legislators to curb its power and require of it some
             he ran into a
              determined
                                measure of accountability to its members. But the
           private citizen.     bullet it has managed to dodge so far may come
                                around again in state legislatures in Florida and
                                elsewhere. It’s a safe bet that the truth will catch up
                                with the union, and when it does, the Florida legisla-
                                ture will very likely demand of the union leaders at
                                least two changes: that they open their financial
                                records to their members, and that school districts—
                                meaning the taxpayers—stop withholding from teach-
                                ers’ paychecks dues and special assessments used by


[4]                                                                         summer 2001
                     the jourNal of the james MadisoO institute


the union for political purposes.              come to believe that the teacher
  Mr. Harlan Hermele, a teacher in             unions are the major impediment to
Palm Beach County, wanted to                   school reform and we at the Institute
resign from the union and join PEN             have, therefore, attempted to learn
              1
of Florida. So, in September 2000,             more about the unions and how they
Hermele sent his letter of resignation         operate. Teachers and school admin-
to the union as required by the union          istrators have called our attention to
contract and received the                                  policies and practices of
following reply from the                                   the unions that are clearly
president of the Palm                                      detrimental to the im-
Beach Classroom Teachers             Most teachers         provement of our schools.
Association (CTA):                                         School board members
                                     do not know
   Per contract, the District’s                            have expressed frustration
   payroll office will deduct        how their dues        over their attempts to
   the entire balance of your        and special           persuade union leaders to
   annual dues ($493.58 minus
   what you’ve had deducted          assessments           consider the welfare of
   already) from your next           are spent.            students in contract
   paycheck. Per CTA policies,                             negotiations and, indeed,
   when CTA receives this                                  to bring the interests of
   deduction (usually about a                              teachers more promi-
   month after it is deducted)                             nently into collective
   we will reimburse you one-half of
                                               bargaining. (Of course the standard
   the dues amount you would have
   paid for the full year ($246.79).           union response is that teachers are
  Yes, that’s what the letter says:            active participants in union deci-
Hermele’s union dues for the full year,        sions, but the more truthful state-
less what he had already paid, would           ment is that teacher participation is
be withheld from his next (October)            limited to a relatively small number
paycheck. He would get half of it back         of union leaders.) Most teachers do
in a month or so and the other half            not know how their dues and special
would remain in the union’s coffers.           assessments are spent, what political
  The contract provision cited by              candidates and causes the union
Shelley Vana, the Palm Beach union             supports, the amount of compensa-
president, is so draconian as to insult        tion union officers receive, or the
the Palm Beach County School                   amount of their dues that is sent to
Board that agreed to the contract              the union’s national headquarters.
and indeed to the union negotiators              As a result of our concerns for
who proposed it. But as Hermele can            these and related questions, the
attest, it’s in the contract and Palm          Institute has recently undertaken a
Beach County teachers are inden-               review of teacher union contracts in
tured by it.                                   Florida school districts in an effort to
                                               learn more of the details of collective
A Review of Union Contracts                    bargaining and the effects of the
Many advocates for reform have                 contracts on the quality of education

summer 2001                                                                         [5]
                    the jourNal of the james MadisoO institute


in our public schools. The Institute       action committees. This service is
contracted with Dr. Myron                  provided to the union at no cost.
Lieberman, chairman of the Educa-            Remedy: Raising or collecting
tion Policy Institute in Washington,       funds for political purposes is an
D. C., to conduct the study.               inappropriate function of govern-
Lieberman is the country’s foremost        ment. Florida’s statutes should
expert on teacher unions, having           prohibit school board participation
published several books on the             in political fundraising. School
subject along with service as contract     boards should be prevented by law
negotiator for over 200 school boards      from collecting and/or distributing
across the country. He is a life           political contributions by payroll
member of the NEA and, as a high-          deduction or participating in any
school teacher during the time the         way in political fundraising. The
teacher unions emerged, he was a           unions would, of course, be free to
leader in the union movement. All of       do their own fundraising for political
that changed, however, as the nature       purposes.
of the movement changed and the
methods and tactics of union leaders       2. Taxpayer subsidies to teacher
were revealed. Lieberman has, for              unions.
the past 30 years, done scholarly          Problem: Most Florida school boards
research on teacher unions and has         provide substantial subsidies to the
been a leading critic. His views on        teacher unions by absorbing the
the subject are widely sought              costs of various union operations,
throughout the country.                    especially the cost of paid leave for
  The study lists 12 separate con-         the conduct of union business.
cerns about collective bargaining            Remedy: School employers—the
with school boards and identifies, in      school boards—should not directly or
each case, practices that we have          indirectly provide released time with
called to the attention of Florida         pay for service as union representa-
legislators, school board members          tives to conduct union business.
and school administrators and the          School boards should be prohibited
general public. Each of the concerns       from releasing employees from
is described below, along with our         regular duties to serve the unions for
recommendations for legislation to         more than one school year; and,
correct the abuse.                         during that time, the union should
                                           be responsible for the full cost of the
1. Payroll deduction of political          salary and benefits of the employees.
   action committee (PAC)
   contributions by Florida                3. Access to school district
   school boards.                              facilities.
Problem: Many Florida teachers             Problem: Florida teacher union
make PAC contributions by payroll          contracts render it virtually impos-
deduction to teacher union political       sible for teachers with an interest in

[6]                                                                    summer 2001
                    the jourNal of the james MadisoO institute


being represented by a different             collective bargaining simultaneously.
labor organization to communicate            This provision has no counterpart in
with other teachers to consider that         private-sector collective bargaining
possibility. Most union contracts            and provides major union advan-
provide for exclusive use by the             tages over private-sector workers who
union of the use of district facilities,     do not have access to political as well
services, and communica-                                as bargaining means of
tions, including use of the                             achieving their objectives.
district mail system, the                                 Remedy: If the terms and
right to meet in schools, and There are many conditions of teacher
access to bulletin boards.        issues on which employment are to be
  Remedy: Access to district the unions’                resolved locally, it is only
facilities, services, and                               fair that the state statutes
communications should be
                                  agenda differs        not be used as the floor for
available on equal terms to       greatly from the collective bargaining
any organization that is          concerns of           proposals. Any provision in
supported by at least 10          teachers.             the statute covering wage,
percent of the teachers in                              hour, or other benefits of
the bargaining unit. (See                               employment provided by
Item 4 below.)                                          statute should be a prohib-
                                                        ited subject of bargaining
4. Choosing an exclusive                     at the school board level. Likewise, if
    representative.                          the matter is to be the subject of
Problem: Incumbent unions in                 bargaining, it should be prohibited
Florida have a monopoly over access          as a subject of legislation.
to school district facilities and
services. As a result, teachers have         6. Final and binding
been deprived of their statutory right           arbitration of grievances.
to choose a different representative.        Problem: Florida statutes require
  Remedy: Because of the difficulties        “final and binding arbitration of
faced by teachers who want to                grievances.” Thus, when grievances
consider a different representative,         cannot be resolved by the parties
the percentage of teachers required          involved, the matter is turned over to
to call a representation election            an arbitrator chosen jointly by the
should be reduced from the present           two parties. The reality is that the
30 percent to 10 percent of the              arbitrators often act like judges who
teachers in the bargaining unit.             make the law while claiming they are
                                             only interpreting it. The findings of
5. The dual system of                        the arbitrators, who are not account-
    teacher union benefits.                  able to the electorate, may establish
Problem: Florida bargaining statutes         policies that are opposed by elected
permit the unions to pursue the same         representatives, and their decisions
objectives through legislation and           have the force of law for the duration

summer 2001                                                                      [7]
                    the jourNal of the james MadisoO institute


of the contract. This, in turn, gives      several months. This often results in
them greater force than statutes, for      year-around conflict. School districts
statutes can be changed at the next        pay a heavy price in the quality of
legislative session but decisions by       classroom instruction by the absence
arbitrators cannot.                        of teachers who are union negotia-
  Remedy: Florida legislature should       tors over a period of weeks or
prohibit rather than mandate final         months.
and binding arbitration of griev-            Remedy: Negotiations between
ances. Grievance procedures should         school boards and unions shall
be developed by the school board           commence no earlier than 60 days
and the union, and must not include        before the end of the contract and
binding arbitration by a mutually          shall be completed no later than
selected agent.                            30 days after the expiration of the
                                           contract.
7. Public input before
    ratification of the contract.          9. Teaching positions in areas
Problem: School boards do not                  of scarcity.
normally release information about         Problem: School boards cannot
their tentative labor agreements until     recruit an adequate number of
agreements are ratified by the union;      teachers in certain fields (science and
then the agreements are ratified by        mathematics) because the boards
school boards before the public has        ignore supply and demand in teacher
had adequate opportunity to under-         compensation. Unions demand that
stand and react to what the contract       teacher compensation be determined
stipulates. Once ratified by the           by length of service and academic
school board, the contract is policy       degrees and that teacher shortage in
for its duration.                          certain fields must not be taken into
  Remedy: School boards should             account in compensation.
provide at least seven working days          Remedy: Because it is an unfair
for public assessment and input after      labor practice for school boards to
the contract has been ratified by the      bargain with anyone except the
union. School boards should develop        teacher unions on terms and condi-
a procedure to receive public input at     tions of employment, so local school
least three working days before            boards may not pay teachers in
ratification by the board.                 scarce fields more than others. But
                                           the Florida State Department of
8. A professional approach to              Education could pay stipends to
   negotiations.                           teachers in scarce fields apart from
Problem: Negotiations between the          the salaries they are paid by the
union and school boards often              school district.
consume excessive amounts of time
and school district resources because      10. Parent Involvement.
they take place over a period of           Problem: In many school districts,

[8]                                                                   summer 2001
                    the jourNal of the james MadisoO institute


parents are treated as complainants        ers and filed with the Public Employ-
to be avoided, not as consumers who        ees Relations Commissions.
should be encouraged to express
their views on school district policies    12. Legislative oversight of
and practices. Typically, the parent is        Florida’s bargaining statutes.
required to put the complaint in           Problem: No organization, public or
writing and the teacher affected may       private, has assembled a reliable
be present at the first meeting            body of information on the problems
between the district staff and the         and outcomes of collective bargain-
complainant. Most union contracts          ing in Florida school districts.
in Florida are clearly intended to           Remedy: The Florida legislature
protect the teacher, not give due          should engage in continuing over-
consideration to the complainant.          sight of collective bargaining in the
  Remedy: Each school district             state’s school districts.
should adopt a grievance procedure
for parents. There should be no            Teacher Unions, Not Teachers
requirement that the complaint be          The study reported here is about
submitted in writing or that the           collective bargaining and teacher
affected person be present at the first    union contracts, not teachers. No
meeting between school officials and       opinions are expressed or implied
the complainant.                           about Florida’s teachers.
                                             The unions pretend that the
11. Payroll deductions for                 interests of teacher unions and
    out-of-state labor                     teachers are the same; hence to
    organizations.                         criticize one is to criticize the
Problem: Florida school boards             other. There are many issues on
routinely collect and transmit dues        which the union leaders seem
to out-of-state labor organizations        indifferent to their members. The
that cannot be monitored or regu-          dues of union members in Miami/
lated by Florida authorities.              Dade County, for example, are
  Remedy: Out-of-state labor organi-       $820 per year. There is widespread
zations that serve as exclusive repre-     sentiment among teachers that the
sentatives in Florida school districts     amount is excessive and some
should provide the following to their      teachers have left the union over
members: a list of all contributors        this issue.
over a certain amount—say $99; a list        The dues structure in Florida
of all candidates for federal office by    school districts is surely a factor in
party affiliation endorsed or sup-         union membership. Union leaders
ported by the organization’s PAC;          maintain secrecy over the union’s
the amount spent for issue and/or          finances and even the membership.
policy advertisements in support of        The NEA Handbook for 2000-2001
political candidates; and access to        reports 57,700 members in Florida.
the dues and PAC contribution                                          To page 19 >
authorization cards signed by teach-
summer 2001                                                                     [9]
                    the jourNal of the james MadisoO institute




   floRidiaNs look back at
    election 2000 and look
  foRWard to major refoRms
                         by susan a. macmanus



                          N      o more jokes about chads—hanging, dangling,
                                 or otherwise, please! No more caricatures of
                          ballots with butterfly wings! No more accusations of
                          poorly trained and insensitive poll workers or intimi-
                          dating election officials. And let’s have no more
                          teasing from Aunt Winnie in Kalamazoo about our
                          state’s oversupply of inept voters.
       Election 2000:       Florida has taken a giant step toward redeeming
            Where do      itself in the eyes of the world with passage of the
        Floridians go     Florida Election Reform Act of 2001. The sweeping
          from here?
                          reform package has already been described as the
                          envy of the nation. For Floridians, it was “must pass”
                          legislation.

                          Public Opinion Survey Played Major Role in
                          Airing Voice of the People
                          A survey jointly sponsored by the Collins Center For
                          Public Policy and The James Madison Institute
                          played a major role in getting the will of the people
                          before the legislature. Four prominent political
                          scientists from state universities were tapped to
                          design and analyze the survey.1 Schroth and Associ-

                          Some of this article is drawn from the report written by the team of
                          political scientists who designed the April survey, but the interpreta-
                          tions reported here are those of the author.


[10]                                                                                  summer 2001
                    the jourNal of the james MadisoO institute


ates in Washington, D.C., conducted         There was far less consensus on the
the telephone survey of 600 adult         causes of problems than on the
Floridians April 3-8, 2001. The           urgency of reform. And opinions
margin of error is ±4 percent.2           varied considerably across groups of
  Floridians were somewhat split in       voters.
their assessments of what caused            Generally, African Americans,
all the presidential election-related     non-Cuban Hispanics, and Demo-
problems. But they were in agree-         crats cited government-related
ment (81 percent) that Florida’s          reasons (ballot design, voting
election system needed
revamping to make it                                Figure 1.
fairer and more accurate—           Major Reasons for Voting Problems
and the sooner the better                    in Election 2000
(no excuses, no delays—
just do it!). Three-fourths
said it was “very impor-
tant” for the state legisla-
ture to tackle reform of
our voting methods before
Election 2002.

Looking Back on
Election 2000
Was Florida unique with
its problems or did similar
problems exist in other
states but they just weren’t
uncovered? Similar prob-
lems existed elsewhere,
said 79 percent of those
surveyed.
  But what were the major
reasons for the problems
some Floridians experi-
enced when they voted last fall? As        machine inaccuracies and malfunc-
shown in Figure 1, confusing ballot        tions, poll workers, and government
designs (39 percent), voter careless-      officials) whereas white, Cuban-
ness (38 percent), and punch card          Americans, and Republican resi-
ballots (29 percent) were the most         dents more often pointed to
often cited reasons for “the amount        individual voter-based reasons
of problems that many Floridians           (carelessness, lack of experience
experienced when they voted last           using voting equipment, reading
November in Florida.”                      and language deficiencies).

summer 2001                                                                 [11]
                     the jourNal of the james MadisoO institute


Citizen Priorities
                                                     Figure 2.
for Election
                                     Support for Election Reforms
Reform3                               (Percent Strongly and Somewhat Favor)
Floridians first and
foremost want
standardization and
uniformity—of voting
machines, ballot
layout and design,
recounting rules (for
close elections and
for absentee ballots),
and poll closing
times.4 (See Fig-
ure 2.) There is also
significant support
for the creation of a
statewide voter
registration list to
help reduce fraudu-
lent voting by
ineligible persons,
better voter educa-
tion, better training
of poll workers, and
an improved voter
registration system.
Well over half of
those surveyed favor
prohibiting Florida
cabinet officials from being actively           ears tuned to public opinion regard-
involved in campaigns other than their          ing the urgency of election reform.
own, nonpartisan election of county             Gov. Jeb Bush (R) acknowledged that
supervisors of election, and outlawing          “The citizens of Florida spoke loud
punch card voting machines.                     and clear on this issue, and we have
  But only one-third support restor-            responded with this historic election
ing the voting rights of felons5 and            reform legislation.”7
fewer than one in five favor voting                The legislation restructures the
via the Internet.6                              roles and responsibilities of the
                                                voters, county supervisors of elec-
The Florida Legislature Closely                 tions, poll workers, the Florida
Follows Citizen Priorities                      Department of State and its Division
Florida’s elected officials had their           of Elections, other state agencies,

[12]                                                                     summer 2001
                    the jourNal of the james MadisoO institute


and canvassing board members at                 seas voters.
the local and state levels, among           • Clarify that vote totals are to be
others.                                         certified no later than seven days
  Some of the major requirements of             following a primary election and
                    8
the new law are to:                             11 days following a general
• Require the use of voting technol-            election.
   ogy that is precinct-                                  • Eliminate the second
   based and allows the                                      (or runoff) primary
   voter to correct mistakes                                 for the 2002 election
   made while voting.             Election 2000              cycle; gives the
• Prohibit punch card and         has convinced              legislature the option
   other antiquated voting        nearly two-                of deciding whether
   systems in Florida.                                       to permanently enact
• Provide Florida counties        thirds of all              the second primary
   with $24 million over          Floridians that            elimination.
   the next two years to          their vote “really      • Remove justification
   modernize their voting         does count.”               requirements for
   equipment.                                                absentee ballot
• Provide for the develop-                                   voting to increase the
   ment of a standardized                                    convenience of the
   and unambiguous ballot                                    voting process.
   design to be used in Florida’s           • Require the posting of a Voter’s
   primary and general elections.               Bill of Rights and Responsibilities
• Provide $6 million in funding for             in each polling place in Florida.
   the development of voter educa-
   tion programs and the recruit-             These reforms tracked closely with
   ment and training of poll workers.       those recommended by the
• Provide $2 million for the devel-         Governor’s Select Task Force and
   opment and implementation of a           with opinions expressed in the
   state-wide centralized voter             Collins Center/James Madison
   registration database by                 Institute public opinion poll of April
   June 2002.                               2001.9 (See the table for more infor-
• Allow a voter whose name does             mation on the implementation of key
   not appear on the voter registra-        proposals.)
   tion roll to vote a provisional
   ballot that will be counted if the       Not Now, but Maybe Later
   voter is subsequently found to be        Among the recommendations that
   property registered to vote.             were not adopted were two that a
• Clarify and provide standards for         majority of the population favored:
   the procedures to be followed            nonpartisan election of county
   when recounting votes.                   supervisors of election and prohibit-
• Facilitate absentee ballot voting         ing members of county and statewide
   by Florida’s military and over-          canvassing boards from being active

summer 2001                                                                    [13]
                     the jourNal of the james MadisoO institute


in partisan political activity while           in the next election cycle.10 Natu-
serving as members of these boards.            rally, Florida is the best place to ask
The legislature also failed to require         this question first.
the automatic restoration of felons’             We asked the survey respondents,
voting rights, but this reform was not         “Has the outcome of last November’s
as high a priority among the popula-           presidential election increased your
tion at-large as the other                                 belief that your vote really
two. It is highly likely that                              does count or has it raised
several of these reforms will                              doubts in your mind about
be revisited during next            A majority of          the importance of your
year’s legislative session.         all demographic vote?”
                                    groups believes           Election 2000 has
Looking Ahead:                                              convinced nearly two-
Voters Acknowledge                  correctly casting thirds of all Floridians
Individual Responsibility           a ballot is the         that their vote “really does
Now that Floridians have            complete                count.”11 Cuban-Ameri-
been put “through the               responsibility          cans (83 percent), Republi-
wringer” and been exposed                                   cans (81 percent), central
                                    of the individual
to extensive media coverage                                 Florida residents (71 per-
of balloting problems, how          voter.                  cent), white (70 percent),
much responsibility do they                                 and college educated
place on themselves to                                      (70 percent) residents are
“make sure their ballot is                                  the most likely to feel
properly cast”?                                more strongly that their vote matters.
  A majority of all demographic                  But 30 percent have had their faith
groups believes correctly casting a            in voting shaken by last fall’s presi-
ballot is the complete responsibility of       dential election. Those most likely to
the individual voter. Republicans              express this view are non-Cuban
(70 percent), Cubans (80 percent), and         Hispanics (65 percent), African
those not registered to vote (72 per-          Americans (59 percent), Democrats
cent) believe this most fervently. Those       (43 percent), and those who have
least prone to are African Americans           lived in the state fewer than five
(50 percent), Democrats (51 percent),          years (43 percent).12
and Independents (51 percent).                   What is the best news of all? More
                                               than 90 percent of those surveyed in
Does My Vote Count More                        April say they will vote in Elec-
Now or Less, and Will I Vote                   tion 2002.
in Election 2002?                                Judgment day will come rather
One of the most intriguing questions           quickly. All eyes will be on Florida
for political scientists across the U.S.       next year as the nation and Florid-
is whether the closely contested and           ians themselves judge the effective-
contentious presidential election              ness of this major election system
2000 will increase voter participation         overhaul.

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                           the jourNal of the james MadisoO institute


           Table. Elected Officials Adopt Reforms Preferred by Many Citizens


                                                                   CITIZEN RANKINGS
         MAJOR                                                         from survey;
                                          GOVERNOR’S                     1=highest
    ELECTION REFORM                       TASK FORCE               (% is strongly favor         LEGISLATURE
       PROPOSALS                        Recommendation              + somewhat favor)             Adopted

Standard recount rules
how and when                                      Yes                    1 (92%)                       Yes
     Dept. of State must adopt detailed rules prescribing recount procedures for each certified
     voting system;1 an automatic machine recount is required if the margin of victory in any race
     is one-half of 1 percent or less; a manual recount of the overvotes and undervotes is required if
     the margin of victory is one-fourth of 1 percent or less.
Same ballot layout/design—
all counties                                      Yes                    1 (92%)                       Yes
     Dept. of State responsible for rules prescribing ballot format2 for each certified voting system;
     postelection reports of voter errors due to problems with ballot design or instructions are due
     from county supervisors of elections to the Dept. of State no later than Dec. 15 of each
     general election year.
Same kind of voting machine—
all counties                                      Yes                    1 (92%)                  No, but…*
*…requires all counties to use a system certified by the Division of Elections
   Electronic or electromechanical precinct-count tabulation voting system (optical scan-precinct
   based; touch screens);3 Div. of Elections to play continuous role in certifying new voter
   technologies; calls for public preelection testing of equipment by county supervisors of
   elections; postelection reports of voter errors are due to the Dept. of State no later than Dec.
   15 of each general election year.
Standard rules for counting
overseas absentee ballots                        Yes                       2 (91%)                     Yes
   Defines overseas voter;4 instructs supervisor of elections to e-mail list of candidates to overseas
   voter when possible at least 30 days prior to an election; presumes date ballot mailed back from
   voter is the date stated and witnessed on the outside of the return envelope (not the postmark).
1
 At a minimum, the rules must address: a) security of ballots during the recount process; b) time and place
     of recounts; c) public observance of recounts; d) objections to ballot determinations; e) record of recount
     proceedings; and f) procedures relating to candidate and petitioner representatives.
2
 The rules must include: a) clear and unambiguous ballot instructions and directions; b) individual race
     layout; and c) overall ballot layout. The department must also graphically depict a sample uniform
     primary and general election ballot form for each certified voting system.
3
 Local governments have discretion as to the type of electronic or electromechanical precinct-count
     tabulation voting system to be purchased, provided that the system has been certified by the Division
     of Election. As of May, 2001, only the optical scan precinct based voting machine had been certified.
     But certification is pending for some touch-screen (DRE) systems is expected before the 2002 election
     cycle. The automatic tabulating equipment must provide the voter an opportunity to correct the
     ballot when the number of votes for an office or measure exceeds the number which the voter is
     entitled to cast (overvote) or where the tabulating equipment reads the ballot as a ballot with no
     votes cast (undervote).
4
 Overseas voter means: a) members of the uniformed services while in the active service who are
     permanent residents of the state and are temporarily residing outside the territorial limits of the U.S.
     and the District of Columbia; (uniformed services means the Army, Navy, Air Force, Marine Corps, and
     Coast Guard, the commissioned corps of the Public Health Service, and the commissioned corps of
     the National Oceanic and Atmospheric Administration); b) members of the Merchant Marine of the
     United States who are permanent residents of the state and are temporarily residing outside the
     territorial limits of the U.S. and the District of Columbia; and c) other citizens of the U.S. who are
     permanent residents of the state and are temporarily residing outside the territorial limits of the U.S.
     and the District of Columbia.



summer 2001                                                                                                  [15]
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                                                                   CITIZEN RANKINGS
         MAJOR                                                         from survey;
                                          GOVERNOR’S                     1=highest
    ELECTION REFORM                       TASK FORCE               (% is strongly favor         LEGISLATURE
       PROPOSALS                        Recommendation              + somewhat favor)             Adopted

Better voter education for
new registrants                                Yes                     2 (91%)                 Yes
   Not just for new registrants; $6 million; by March 1, 2002, Dept. of State must adopt rules
   prescribing minimum standards for nonpartisan voter education;5 each county supervisor of
   elections must implement the minimum voter education standards and by Dec. 15 of each
   general election year, shall send a report of the voter education programs that have been
   implemented to the Dept. of State; the Dept. of State must prepare a public report on the
   effectiveness of voter education programs and reexamine rules.
Same poll closing time
throughout the state                      Yes, but…*                   3 (87%)                 No
*…throughout the nation; send resolution to Congress
     Div. of Elections and the Florida State Assoc. of Supervisors of Elections must study the
     benefits and drawbacks of having uniform poll opening and closing times throughout the state;
     a written report must be presented to the legislative leaders no later than January 1, 2002.6
Statewide voter registration
list to reduce fraud                              Yes                      4 (86%)                 Yes
     Dept. of State can contract with Florida Association of Court Clerks to analyze, design,
     develop, operate, and maintain a statewide online voter registration database and associated
     web site to be fully operational statewide by June 1, 2002;7 Div. of Elections must provide
     quarterly progress reports to legislative leadership beginning July 1, 2001.
Better training of poll workers                   Yes                      5 (81%)                 Yes
     Better training and recruitment must be done by county supervisors of elections; 8 Dept. of
     State must create a uniform polling place procedures manual to be placed in each precinct on
     election day; 9 supervisors of elections must work with business/local community to recruit
     skilled inspectors and clerks.

5
  The standards must address, but are not limited to, these subjects: a) voter registration; b) balloting
      procedures, absentee and polling place; c) voter rights and responsibilities; d) distribution of sample
      ballots; and e) public service announcements.
6
  This report must at a minimum include a discussion of the circumstances surrounding the 2000
      Presidential election; changing the state to one time zone; changing polling times to coincide in both
      time zones; and having the Central Time Zone not recognize Daylight Saving Time.
7
  The database will be updated daily and will be used to determine if a registered voter is ineligible to vote
      and whether the voter’s registration is duplicated. If the county supervisor of elections determines a
      voter is ineligible, the voter must be notified by certified U.S. mail. The voter has an opportunity to
      respond. If the supervisor then finds the voter is indeed ineligible, the voter must again be notified of
      the reason by certified U.S. mail.
8
  Supervisors are responsible for conducting training for inspectors, clerks, and deputy sheriffs prior to
      each primary, general, and special election. No person shall serve as an inspector, clerk, or deputy
      sheriff for an election unless such person has completed the training as required. The minimum
      training requirements for clerks are: a minimum of six hours of training during a general election
      year, at least two hours of which must occur after June 1 of that year. Inspectors must have a
      minimum of three hours of training during a general election year, at least one hour of which must
      occur after June 1 of that year.
9
  At a minimum, the manual must include: a) regulations governing solicitation by individuals and groups
      at the polling place; b) procedures to be followed with respect to voters whose names are not on the
      precinct register; c) proper operation of the voting system; d) ballot handling procedures; e) proce-
      dures governing spoiled ballots; f) procedures to be followed after the polls close; g) rights of voters
      at the polls; h) procedures for handling emergency situations; i) procedures for dealing with irate
      voters; j) handling and processing of provisional ballots; and k) security procedures.



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                                                                      CITIZEN RANKINGS
          MAJOR                                                           from survey;
                                            GOVERNOR’S                      1=highest
     ELECTION REFORM                        TASK FORCE                (% is strongly favor           LEGISLATURE
        PROPOSALS                         Recommendation               + somewhat favor)               Adopted

Better voter registration system                                      6 (79%)                     Yes
    Notes: Revised procedures to be followed when a voter registration application is incomplete;
    required up-to-date statewide voter registration list.
Prohibit cabinet officials from
campaigning for others                         Yes                    7 (63%)                     No
Nonpartisan election of
Supervisors of Election                        Yes                    8 (62%)                     No
Outlaw/decertify
punch card machines                            Yes                    9 (61%)                     Yes
    Effective September 2, 2002
Restore felon
voting rights                     Further study needed               10 (33%)                     No10
    Governor and attorney general are studying the issue.
Allow voting over
the Internet                      Further study needed               11 (17%)               Yes (but…*
*…only under unusual circumstances)
    Dept. of State must adopt rules to authorize supervisors of elections to accept a voted absentee
    ballot by facsimile machine or other electronic means from overseas voters.11
Voters Bill of Rights
and Responsibilities                           Yes                                                  Yes
    Must be posted at each polling place.12
State funding (match or loan)
to upgrade equipment                           Yes                     52%…*                       Yes†
*…favored both state and counties paying
†(matching    grant)
     $24 million.13

10
   Such legislation was introduced in the 2001 session, but it was withdrawn to allow the governor and
      attorney general to further study how to resolve the issue.
11
   The rules must provide that in order to accept a voted ballot, the verification of the voter must be established,
      the security of the transmission must be established, and each ballot received must be recorded.
12
   The Voter’s Bill of Rights and Responsibilities informs each registered voter of his/her right to: a) vote
      and have his or her vote accurately counted; b) cast a vote if he or she is in line when the polls are
      closing; c) ask for and receive assistance in voting; d) receive up to two replacement ballots if he or
      she makes a mistake prior to the ballot being cast; e) an explanation if his or her registration is in
      question; f) if his or her registration is in question, cast a provisional ballot; g) prove his or her identity
      by signing an affidavit if election officials doubt the voter’s identity; h) be given written instructions to
      use when voting, and, upon request, oral instructions in voting from elections officers; i) vote free
      from coercion or intimidation by elections officers or any other person; and j) vote on a voting system
      that is in working condition and that will allow votes to be accurately cast. The individual voter’s
      responsibilities are to: (1) study and know candidates and issues; (2) keep his or her voter address
      current; (3) know his or her precinct and its hours of operation; (4) bring proper identification to the
      polling station; (5) know how to operate voting equipment properly; (6) treat precinct workers with
      courtesy; (7) respect the privacy of other voters; (8) report problems or violations of election law;
      (9) ask questions when confused; and (10) check his or her completed ballot for accuracy.
13
   Counties having a population of 75,000 or fewer based on the 2000 Census will receive a total of
      $7,750 per precinct based on the number of precincts certified by the Dept. of State for the 2000
      General Election; all other counties will receive a total of $3,750 per precinct based on the same
      criteria. Payments will be made in two equal installments, on July 1, 2001 and July 1, 2002.



summer 2001                                                                                                     [17]
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                                                                       CITIZEN RANKINGS
           MAJOR                                                           from survey;
                                              GOVERNOR’S                     1=highest
      ELECTION REFORM                         TASK FORCE               (% is strongly favor           LEGISLATURE
         PROPOSALS                          Recommendation              + somewhat favor)               Adopted

County election supervisors
appeal of budgets to state cabinet Yes                                                                 No
Design a statewide online
voter registration database                      Yes                                                   Yes
Change dates for primary
elections; but don’t eliminate
runoff or second primary                         Yes
    Eliminated runoff primary until January 1, 2004. The candidate receiving the highest number
    of votes cast for an office in the September primary will be declared nominated for that office.
Repeal current restrictions
on voting absentee                               Yes                                                   Yes
    Removes language requiring justification for voting absentee; recognizes absentee balloting as
    a form of voter convenience; extends the certification deadline to seven days after the primary
    election and 11 days after the general election. All returns that are filed late must be rejected.
Allow for provisional ballots;
to be counted if voter is found
to be properly registered                        Yes                                                   Yes
    Defines a provisional ballot; lays out steps to follow when voting and counting provisional
    ballots.14

Sources: The Governor’s Select Task Force on Election Procedures, Standards, and Technol-
ogy, Revitalizing Democracy in Florida (March 1, 2001); Collins Center/James Madison
Institute Survey of Florida Voters, April 3-8, 2001; Florida Election Reform Act of 2001 (S1118).

14
     A provisional ballot is a ballot issued to a voter by the election board at the polling place on election day
        for one of two reasons: a) the voter’s name does not appear on the precinct register and verification of
        the voter’s eligibility cannot be determined; or b) there is an indication on the precinct register that the
        voter has requested an absentee ballot and there is no indication whether the voter has returned the
        absentee ballot. Once voted, the provisional ballot must be placed in a secrecy envelope and sealed in
        a provisional ballot envelope and deposited in a ballot box. The county canvassing board will examine
        each provisional ballot to determine if the person voting that ballot was entitled to vote at the precinct
        in the election and that the person had not already cast a ballot in the election (via absentee).


Susan A. MacManus is Distinguished                                   held a press conference at the Florida Press
                                                                     Center on April 23, 2001 and released their
University Professor of Public Administra-                           report titled “Floridians Want Reform of the
tion and Political Science at the Univer-                            Election System…Now!” The full report is
                                                                     available from the James Madison Institute.
sity of South Florida and chair of the                          2
                                                                  The respondents were selected via a random sample
Florida Elections Commission.                                        of Florida’s adult population (18 and over) taken
                                                                     from listed telephone numbers. Over samples
                                                                     (n=125) of both the African American and
                      Endnotes                                       Hispanic populations were taken to afford a
1
    Dr. Susan A. MacManus, Distinguished University                  more representative view of these two sizable
        Professor, from the University of South Florida,             minority communities. These figures were then
        headed the team. Other team members were: Dr.                weighted to reflect overall composition in the
        Dario Moreno, Florida International University,              adult population. The margin of error for each
        Dr. Richard Scher, Robin and Jean Gibson                     of these groups is ±9 percent. The average
        Professor, University of Florida, and Dr. Henry              survey lasted 14 minutes.
                                                                3
        Thomas, University of North Florida. The team             Survey respondents were presented with a list of


[18]                                                                                                   summer 2001
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      suggested reforms, emanating from reforms                   the 2002 elections in Florida (57 percent) favor
      recommended by The Governor’s Select Task                   restoring felon voting rights. Republicans are the
      Force on Election Procedures, Standards, and                least likely to favor this reform (17 percent).
                                                          6
      Technology, and from hearings held by other           Opposition to this reform is heavy across all
      groups like the U.S. Civil Rights Commission.               demographic categories. But support is slightly
      They were then asked whether they strongly                  higher among younger cohorts (29 percent of
      favor, somewhat favor, somewhat oppose, or                  18-34 year olds) and among those with some
      strongly oppose each reform.                                college education (24 percent). The differences
4
  County election supervisors as well as many in the              of opinion on this reform are generationally
      general public have called for eliminating                  and educationally driven, rather than by
      inconsistencies in Florida’s key state laws. See            partisanship.
                                                          7
      David Wasson, “Retiring Punch Cards One               Jeb.bush@myflorida.com; May 4, 2001.
                                                          8
      Focus of Task Force,” The Tampa Tribune,              List taken from Jeb.Bush@myflorida.com.
                                                          9
      January 9, 2001; Debbie Salamone Wickham              The law also changed public financing of campaigns
      and Harry Wessel, “What’s a Vote? It Varies by              in Florida but that is not the major focus of this
      County,” Orlando Sentinel, January 28, 2001.                article.
5                                                         10
  By far the strongest support for restoring the voting      This question was already surfacing in early
      rights of felons comes from the African                     December, 2000. See Matthew I. Pinzur, “Faith
      American community (75 percent). Blacks feel                in Democracy Faltered in Election,” The Florida
      that have been unfairly impacted by our state’s             Times-Union, December 27, 2000.
                                                          11
      rather difficult process for having one’s voting       There is some early evidence to complement this
      rights restored. Other breakdowns show less                 finding, namely noticeable increases in the
      than a majority support for this reform.                    number of registered voters in some counties.
      However, higher than average percentages of                 See David Damron, “More Voters Spring Into
      Democrats (48 percent), 18-34 year olds                     Action,” Orlando Sentinel, February 19, 2001.
                                                          12
      (47 percent), non-Cuban Hispanics (46 percent),        It is likely that some of the frustration came from
      those who did not vote in the presidential                  the Electoral College dictating the presidential
      election last fall (45 percent), and persons who            winner rather than the popular vote.
      are undecided about whether they will vote in




teacher unioNs (Continued from page 9)
Union leaders in Florida often claim                      becomes more widely known by the
to speak for 120,000 teachers but                         people of Florida.
they have resisted requests for a
breakdown of membership or to                             J. Stanley Marshall is founding chairman
explain why the report in the Hand-                       of The James Madison Institute and
book is wrong.                                            publisher of this magazine.
  Our study reveals many instances
that support the claim that the                                                  Endnote
                                                          1
teacher unions stand in the way of                            PEN, the Professional Educators Network of
                                                                 Florida, is an association of educators—teachers
progress in school reform. Union                                 mostly—that represents an alternative to the
influence on education policy and on                             union. Among other benefits, PEN provides the
                                                                 liability insurance protection many teachers feel
the quality of teaching and learning                             they must have and which is the reason many
in our schools will diminish as the                              join the union.
truth about union goals and methods




summer 2001                                                                                                    [19]
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                       the RevolutioN
                       in pRivatiZation
                                by lawrence w. reed



                                 P     rivatization has become an important tool in the
                                       way we govern ourselves at the local level, and to
                                 some degree at the state level, but less so at the
                                 federal level. Twenty years ago the word
                                 “privatization” wasn’t even in the dictionary. But let
                                 there be no mistake about this fact: privatization in
                                 its various forms has now become nothing less than a
                                 revolution in governance all over the world. It is
              This article is    happening at a feverish pace, and the more it is done,
             adapted from        the more we are learning about how to do it right.
        remarks made by
                                   The broadest definition of privatization is the
       Lawrence W. Reed
         at the Legislative      transfer of services or assets from the tax-supported
               Orientation       and politicized public sector to the entrepreneurial
           program of the        initiative and competitive markets of the private
         Florida House of        sector. The superiority of the latter is now approach-
       Representatives on        ing the status of undisputed conventional wisdom.
          January 9, 2001.
                                 The private sector exacts a toll from the inefficient
                                 for their poor performance, compels the service
                                 provider or asset owner to concern himself with the
                                 wishes of customers, and spurs a dynamic, never-
                                 ending pursuit of excellence—all without any of the
                                 political baggage that haunts the public sector as
                                 elements of its very nature.
                                   In an interdependent world getting smaller through
                                 the speed of transportation and communications, no
                                 community of people can compete successfully
                                 without ridding itself of costly public enterprises and


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liberating the entrepreneurial spirit.       would argue that you should only do
  The theory is simple, but                  it when you’ve done your homework
grounded in profound truths about            and all the necessary research to
the nature of humans and their               determine that it is the best option to
response to incentives and disincen-         make sure that the needed services
tives. Tie up the performance of a           are provided. Rarely should you
task with red tape, bureau-                               privatize just for the sake
cracy, and politics within a                              of doing it or without
system that is guaranteed to                              much homework. A few
exist regardless of outcome,       Privatization          years ago Dayton, Ohio,
and the result is usually          harnesses the          seriously entertained the
mediocrity at great expense.       powerful market        notion of getting into the
Infuse competition, account-                              pizza parlor business.
                                   forces of
ability, and the fear of                                  They were going to have
losing valued customers            competition,           city-owned pizza parlors
into the task, and medioc-         accountability,        in Dayton. It never did
rity becomes the exception,        and incentive.         come to pass but if it had,
excellence the rule.                                      it would have been a good
  When it is handled                                      example of something to
properly and with care,                                   immediately privatize.
privatization harnesses the powerful         Delivering pizza is simply not a
market forces of competition, ac-            legitimate function of local govern-
countability, and incentive. It means        ment. There is plenty of provision
that government officials don’t have         for that in the private marketplace.
to be hemmed in by an indifferent            To the extent that governments go
bureaucracy; instead, they can take          beyond the core functions that they
advantage of the best available buys.        are supposed to perform and get into
State and local governments have             these other areas, then over time
routinely experienced costs savings          these functions and services begin to
of 10 to 40 percent through                  suffer. But by and large, do it after
privatization, often with significant        you’ve spent some time looking into
improvements in the way an asset is          the alternatives and see what might
managed or a service is delivered.           work best, and then you can see
When assets and services are left            whether it makes sense to keep
entirely in private hands from the           things as they are in-house with
very start and the government                government.
“middleman” is eliminated, even
greater efficiencies are possible.           Contracting Out
  Although I am in favor of                  By far the most common form and
privatization and a promoter of it,          the one every government at every
I’m not a knee jerk “privatize any-          level is doing to some degree is
thing and everything for the sake of         contracting out to private firms.
doing it” kind of person. In fact, I         That’s when government says, “We

summer 2001                                                                       [21]
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used to do this as a city function with    meetings to sweat through in order
a monopoly of city workers but we’re       to register a complaint. You hire the
not going to do it that way anymore.       service and if you’re not happy, you
We’re going to put it up for bid and       fire it and hire a different one. This
award a contract to one or more            form of privatization tends to en-
private firms or even to a nonprofit       hance both our liberties and our
agency.”                                   pocketbooks if it’s done right. So
  With decades of experience,              where you’ve got the multiplicity of
contracting government services out        good providers, strong track records,
has become something of a science          and responsible people in the com-
at the local level in America. We now      munity who can be trusted to take
know what it takes to make this            care of these responsibilities, this is
work, including: open, competitive         an option. It can be the best because
bidding for contracts that are subject     it cuts out the middleman of govern-
to periodic renewal; careful writing       ment altogether and gives the con-
of the contract terms to incorporate       sumer the ultimate power of choice
clear language and appropriate             in competition. This form of
safeguards; and effective monitoring       privatization tends to enhance
of performance to ensure the con-          citizens’ liberties and spare their
tract is being carried out as expected.    pocketbooks if it is done right.

Commercialization                          Asset Sales
The second form of privatization is        Another form is asset sales. It is the
one that I think is actually the best.     outright gift or sale by government
The term we give it is commercializa-      of a physical asset (a piece of equip-
tion. This is where government says,       ment or a building, perhaps) to a
“We’re no longer going to do this          private entity. This involves a service
work with our own workforce. We’re         or a building or a piece of equipment
not going to contract it out either.       that government no longer needs or
We’re simply going to get out of this      puts up for bid to sell.
business altogether. The customers
we used to serve can take care of the      Vouchers
job themselves by contracting with         A fourth form is the issuance of
the private provider of their indi-        vouchers that can be redeemed in
vidual choice.”                            the marketplace. Instead of direct
  This is how a number of cities           public provision of a service, it gives
across America have pulled out of          recipients choices where they had
the garbage business. The citizens         none before. That’s most often
themselves shop amongst several            thought of with regard to education,
private, competitive firms that            but vouchers are cropping up more
specialize in picking up and properly      and more and are often imple-
disposing of garbage. No middle-           mented with regard to public hous-
man, no taxes, no boring city council      ing. The idea here is that instead of

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the government providing it or even          privatizations taking place in the
contracting on your behalf, it will          country, but there are other forms
simply give you a receipt or a form—         and there are combinations of these
whatever you want to call it—to get          on which assets and services have
things from the provider of your             been privatized. Why is this happen-
choice and that provider then re-            ing at such a great pace at the local
gains his money. Think of it                              level in this country and in
this way—we decided some                                  many countries across the
years ago the federal gov-                                world? I think for a couple
ernment wanted to do               Privatization in       of reasons. One is ideo-
something to help poor             its various forms logical. In some places
people to get food. One of         has now become where government has
the options could have been                               been all over the place
                                   nothing less than
to have government farms                                  with a sorry track record,
and government sources             a revolution in        leaders in government
selling food or providing it       governance all         now say, “We just want to
directly in some fashion to        over the world.        get out of this.” But by and
poor people. We didn’t go                                 large most privatizations
that route; we didn’t Soviet-                             happening aren’t for
ize it. We simply gave                                    ideological reasons but
people a voucher and said, “You can          rather because of tax limitations.
take this to the food seller of your         Governments are finding that they
choice” and that’s a kind of                 are up against the tax wall. They
privatization.                               realize in this modern globalized
                                             economy that they are in competition
Other Methods                                with other governments near and far
Two other forms of privatization             for people and for business. They also
include: 1) the sale of stock in a           realize there is a limit to how far they
newly privatized company that was            can raise taxes so as to raise revenues
formerly state-owned, and 2) the end         to provide services before people and
of subsidies and all the red tape and        businesses leave. Or they are running
onerous regulations that come with           into tax limitations in most of their
them, which then liberates an indus-         state constitutions or locally passed
try to produce “for the market” and          bond measures. So they’re looking for
not for the government. New                  ways to get a job done more effi-
Zealand accomplished this with               ciently and they’re turning increas-
agriculture a decade ago; farmers            ingly to privatization because of the
there are no longer wards of the state       forces of choice and competition to
and are doing quite well.                    get a job done better.
                                               At the local level of government, if
Choice and Competition                       you gave me a little bit of time, I
These forms comprise the over-               could provide you with examples of
whelming share of all the                    where somebody has privatized

summer 2001                                                                       [23]
                     the jourNal of the james MadisoO institute


almost any service you can think of             Goldsmith of Indianapolis said
that any local government provides.             that before he privatized city
That’s even true for two of the most            services, it was extremely diffi-
important public safety functions of            cult to resolve citizen complaints
local government—police and fire                or get the bureaucracy to move
protection. There are some limited              on anything. Once a service is
examples where those areas are                  privatized, accountability is
privatized.                                     almost instantaneous. If perfor-
                                                mance suffers, the city can
Objections                                      quickly cancel the contract.
Examples of privatization are every-            Because of that, the mayor said,
where and studies by the dozens                 government officials like him are
verify its effectiveness. Articles and          actually empowered, not
monographs are proliferating, advis-            hobbled. (See “Innovations in
ing officials of the pitfalls to avoid          Government” by Stephen Gold-
and the strategies that work. There is          smith, The Journal of The James
simply no denying that privatization            Madison Institute, Spring 2001.)
is a major trend now and that each
new experience teaches us even more         • It didn’t work in some instances
about how to maximize its benefits.           so we shouldn’t do it anywhere. I
But there are plenty of objections to         have yet to see a case where a
privatization. I don’t want to suggest        failure was really an indictment
to you that it is problem free. Here          of privatization itself. Failures are
are the most common ones, along               almost always arguments for
with a brief response:                        avoiding poor practices, such as
• It is antipublic employee. Strate-          noncompetitive bidding in
    gies can be devised that actually         smoke-filled backrooms, sloppy
    involve public employees in a             contract writing, or nonexistent
    positive way. But ultimately, we          monitoring of performance.
    must remember that government
    does not exist for the benefit of       • It can breed special interests who
    those who work for it; it exists for      will lobby for more contracts and
    the benefit of those who pay its          services from government, even
    bills or need its services. Govern-       when that’s not warranted. Public
    ments that employ more people             bureaucracies lobby for more
    than necessary, or that pay their         government, too. This is an
    employees more than their market          argument for taxpayers and the
    will bear, are not doing any favors       press to be vigilant, not an argu-
    for the citizens—including the            ment against privatization.
    poor—who are picking up the tab.
                                            • Government officials may not do the
• It is a backdoor way to hobble or           right thing with the savings. It’s true
  destroy government. Mayor                                              To page 32 >


[24]                                                                     summer 2001
                     the jourNal of the james MadisoO institute




              dodgiNg the bullet:
       florida nursing homes get
    eleventh-hour litigation relief

                            by peter doherty



                           F   or more than three years—since the massive
                               rewrite of the state’s civil litigation statutes in
                           1999 that failed to include it within its reforms—the
                           nursing home industry in Florida has been in
                           trouble. By the opening of the 2001 session of the
                           Florida legislature in March, it was clear that if
                           legislators did nothing or did the wrong thing, we
                           would have a problem as unsolvable and as eternal as
                           that of worker’s compensation insurance1—one that
                           hurts the state and its people, and one that might
  Regulatory changes       occasionally destroy the careers of unlucky public
 will put Florida in the   servants. Had we continued to burden the long-term
forefront of improved
   standards for long-
                           care industry in the state, we would have crushed it
   term care facilities.   out of existence or priced what remained of it beyond
                           the reach of all but the very wealthy. Indeed, by early
                           2001, 21 percent of the companies who operate
                           nursing homes in Florida were already seeking
                           protection in bankruptcy court.2
                             Governor Jeb Bush summed up the situation in his
                           State of the State message:
                              Nursing homes teeter on the verge of bankruptcy in
                              Florida, and many will go under if we do not take
                              decisive action to stabilize their insurance premiums
                              by providing lawsuit relief. If nursing homes close their
                              doors, seniors could be left without the services they
                              vitally require at this vulnerable time in their lives.


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                           the jourNal of the james MadisoO institute



                                     Figure.
                    Florida Nursing Homes Loss Cost* per Bed
          Year                                           National Average                                                    Florida
          1995    . . . . . . . . . . . . . . . . . . . . . . . . . . . $345 . . . . . . . . . . . . . . . . . . . . . . . . $2,096
          1999    . . . . . . . . . . . . . . . . . . . . . . . . . . . $806 . . . . . . . . . . . . . . . . . . . . . . . . $6,283

          *The estimated average amount paid annually in claims by bed.

   Even if nursing homes survive but                                     situation outlined by the governor
   are financially weakened, the                                         were indisputable signs that the issue
   quality of care they provide could                                    had passed beyond one of concern to
   decline and harm our elders.
                                                                         a certifiable crisis.
   Nursing homes in Florida are three
   times more likely to be sued than in                                    The word “crisis” is overused, so
   other states, putting the costs of                                    much so that in some situations it
   liability insurance at eight times the                                has lost its impact. It has become
   national average. We should                                           debased and when a potentially
   preserve the right to litigate, but                                   devastating situation arises that
   wouldn’t it be better for nursing
                                                                         deserves the label “crisis,” the
   homes to spend money on improv-
   ing quality of care rather than
                                                                         overworked word is simply inad-
   paying for insurance premiums and                                     equate. But the long-term care crisis
   litigation costs?3                                                    in Florida was real, it was persistent,
   The governor offered no specific                                      and it was getting worse.
proposal to accompany his remarks.                                         The figure above shows that by
He might have hoped he could. But                                        1999, the loss cost per bed in
in mid-February, the Task Force on                                       Florida was almost eight times the
Availability and Affordability of                                        national average,4 and the trend did
Long-term Care created by the                                            not stop there. By 2000, the loss cost
2000 legislature to find a consensus                                     had zoomed to $12,700 per bed, a
solution released its final report. The                                  nearly unbelievable 1,200 percent
report was of little help. The task                                      higher than the rest of the country.5
force had been charged with study-                                       Worse, lawsuits and judgments
ing the entire long-term care indus-                                     rendered against nursing homes
try and preparing recommendations                                        were rising fast. Long-term care
for legislative consideration. It                                        facilities were in bankruptcy and
collected information and developed                                      were closing. Liability insurance for
options, but in the end could not                                        those still in operation was harder
reach agreement. Its members were                                        to get and increasingly expensive. If
unable to endorse any course and                                         the trend had continued, liability
elected to submit a nearly 1,000-page                                    insurance for the institutions would
Informational Report that contained                                      have become unavailable. Some
little direction for policymakers.                                       underwriters had already chosen to
   The inconclusive report, the                                          withdraw from the Florida market:
impasse of the task force, and the                                       others were preparing to follow. In

[26]                                                                                                                            summer 2001
                    the jourNal of the james MadisoO institute


the wake of this, the premiums               over the five years preceding 2000,
charged by those that remained               while the rest of the nation has
were increasing to the point they            seen annual increases of 22 percent
were very nearly prohibitive.6 And           during that period.
since insurance coverage is a de           • Approximately half (49 percent) of
facto requirement of nursing home            the amount paid in long-term care
operation, facilities that could not         claims in Florida was going
obtain it or that could not afford it        directly to attorneys who pros-
would be forced to close, and—given          ecuted the claims or defended the
the hostile atmosphere—no new                facilities.
facilities would be likely to take         • The cost of insuring a Florida
their places. It was a scenario              nursing home bed was at least
leading to a bleak and unhappy end.          twice the cost of an acute care bed
                                             in a hospital because of insurance
Some Facts                                   losses. Florida long-term care
How bad was it for nursing homes in          facilities were suffering per-bed
Florida? In addition to the above,           losses that were double the size of
consider these facts as reported by          those suffered by hospital beds.
actuarial analyses released in 2000          This represented a significant
and updated in early 2001 by Aon             turnaround from less than a
Worldwide Actuarial Solutions:               decade earlier when the losses for
• Florida, with approximately                long-term beds were approximately
  10 percent of the licensed long-           one-third of that for hospital beds.
  term care beds in the country,           • Insurance companies were leaving
  accounted for 44 percent of the            the Florida market or severely
  national losses. And these beds            restricting their issuance of poli-
  accounted for 50 percent of all            cies. Through 1999, at least
  losses nationwide over the past five       10 companies that had historically
  years.                                     operated in Florida had stopped
• The average long-term care claim           selling new policies altogether.
  paid in Florida in 2000 was                Others had reduced the coverage
  $455,000. This was almost 300 per-         their policies provided and all
  cent higher than the $156,000              companies still operating in the
  average claim paid during the              state had raised their premiums
  same year in the rest of the nation.       dramatically.
• Florida long-term care operators         • Liability insurance for Florida
  incurred four claims for every one         long-term care facilities was at least
  incurred in the rest of the country.       600 percent more expensive than
  In 1999, the ratio was three claims        that available in other states.7
  in the state to every one claim            These facts pointed to something
  elsewhere.                               else other than looming disaster.
• Long-term care loss costs in the         They clearly showed that something
  state increased 45 percent annually      was terribly wrong in Florida. Our

summer 2001                                                                    [27]
                    the jourNal of the james MadisoO institute


long-term care facilities could not        What To Do?
possibly be so bad that they were          No one seriously suggested that long-
responsible for 44 percent of all the      term care facilities drop their liabil-
harms done by similar facilities           ity insurance. While the suggestion
nationwide, or that the degree of          was made,9 the reality that such
harms done in our state was 300 per-       insurance is necessary to compensate
cent worse than elsewhere.                 for real damages militated against
  Common sense told us we could            doing so.
not be that bad, and facts backed            Therefore if liability insurance
that up. In September 2000, the            remained a de facto requirement for
General Accounting Office of the           doing business, the question became
United States Congress reported            how to reduce the exposure of
these facts about Florida:                 insurers and, by doing so, keep
• It was the second most improved          coverage affordable and available. As
  state with regard to long-term care      the legislative session opened, two
  during the year 1999–2000.               primary ways of doing this were
• It ranked among the best 20 states       under discussion. One would be
  in terms of quality of care, accident    effective. The other would have
  prevention, and the use of protec-       created a situation giving rise to
  tive restraints.                         what might be called “elder comp,” a
• It ranked in the middle of all states    close, grotesquely frightening cousin
  in the occurrence of pressure-sore       of the venerable worker’s comp—the
  injuries.                                legal and political equivalent of the
• Its staffing ratios in long-term care    brother-in-law who takes up resi-
  facilities were (and had been)           dence on your sofa, eats you out of
  consistently above the national          house and home, wrecks your car,
  average.                                 ruins your finances, and who will not
• Its nursing homes ranked eighth          leave and cannot be driven out.
  nationally in the average number
  of licensed nurse hours worked.          Elder Comp
• Its citation rate for inadequate         The preferred solution of the trial
  nursing home staffing dropped            bar and some Florida officials was to
  during 1999–2000 from 12.5 per-          create a system of joint underwrit-
  cent to 9 percent, and the homes         ing that would have placed nursing
  added a total of $31 million to          home insurance into a pool arrange-
  their budgets during this period for     ment so as to spread the exposure
  increased staffing.                      for loss over a number of participat-
• Its nursing home citation rate for       ing insurers, thus theoretically
  all violations dropped to an aver-       lowering any individual insurance
  age 6.1 deficiencies per facility        company’s exposure. On the sur-
  inspection in 1999–2000, while the       face, this sounded reasonable
  national average increased from          enough. Those facilities that could
  5.7 to 6.0 per inspection.8              find individual insurers would still

[28]                                                                   summer 2001
                    the jourNal of the james MadisoO institute


be free to do so. But facilities that       chase pool insurance. Additionally,
could not find or could not afford          as costs continued to rise, participat-
coverage from a single company              ing companies might have left or
would have been protected by a              restricted their participation in the
policy provided by the pool and             pool, and this would have driven
jointly underwritten by participat-         costs even higher as the spread of
ing insurers, each of which                             exposure contracted. The
would face exposure for                                 government would then
only a portion of any loss                              have attempted to regu-
incurred. The government          Early in 2001,        late this. It might have
would have regulated rates        21 percent of         tried administratively to
charged and the exposure          companies who         place limits on claims,
levels incurred by under-                               impose mandatory
writers. This, it was said,
                                  operate nursing       arbitration, or threaten
would introduce an ele-           homes in              insurers who attempted to
ment of predictability and        the state             leave the pool or who
stability into the long-term      were seeking          refused to join. The result
care facility insurance                                 would have been the
                                  protection in
market. The facilities would                            creation of “elder comp”
have been covered, the            bankruptcy court. and its attendant ever-
insurers would have been                                upward spiral of govern-
protected, and patients                                 mental attempts to
would have remained able                                predict and cover losses,
to collect. A crisis, said the propo-       to find insurers willing to write
nents of the scheme, would be               policies, and to produce equity for
avoided.10                                  claimants.
  It was a compelling argument.
Unfortunately it was also an incor-         Solving The Problem
rect one. While a joint underwriting        As the 2001 legislature continued,
system might, in fact, have lowered         it began to become clear to many
rates in the short run, it would not        legislators that any truly effective
have done so permanently. If claims         method of addressing the problem
and awards continued to be unregu-          must deal with the increasing
lated—as advocated by the propo-            litigation, with the increasing
nents of joint underwriting—the size        awards, and with attorney fees. In
of judgments would have continued           1999, when debate raged in the
to increase as they had been doing.         Florida legislature over tort reform
(Given the past, no reasonable              (a process that would result in the
argument could be made they would           passage of provisions placing
not). As a result, the costs to those       limitations on some types of recov-
underwriters in the pool would have         ery and fees), most “abuses against
increased along with them, as would         the elderly” were specifically
have the cost for facilities to pur-        excluded and declared to remain

summer 2001                                                                    [29]
                     the jourNal of the james MadisoO institute


under the existing provisions of               three examples.12
Chapter 400. (Chapter 400 is the                 Because all of these were styled as
portion of the Florida Statutes that           “rights,” they gave rise to potential
in part deals with nursing homes.11 )          legal action. And because they were
Within this section is a statutory             civilly enforceable and initiated at
declaration of “resident’s rights.”            the option of the aggrieved party, the
The rights enumerated                                      causes they anticipated
were, to say the least,                                    might arise at any time,
flexible vehicles for initiat-                             with or without warning.
ing causes of action                 What good             It is axiomatic in America
against long-term care               would                 that anyone may sue
facilities. Among the                “residents’           anyone about anything at
provisions were a number                                   any time, and the rights
                                     rights” if
of common sense “rights”                                   granted in Chapter 400
that lend themselves to              there were            provided generous pegs
objective definition. These          no place to           upon which to hang such
relate directly to appropri-         reside?               actions.
ate and timely notices of                                    This was not all bad.
services, fees, rules, ac-                                 Our elders need protec-
commodations, informed                                     tions that they can
consent, and with personal belong-             choose to invoke. However, the
ings, including money. However,                remedies under Chapter 400 placed
side by side with them were some               the state’s nursing homes in a no-
slippery provisions, “rights” ex-              win situation. Unlike other areas of
pressed so vaguely that they easily            health care that since 1999 had
lent themselves to all manner and              some measure of predictability in
shades of interpretation. Among                terms of permissible award levels
these were the following:                      and attorney fee arrangements as a
• “The right to be treated courte-             result of tort reform, the nursing
  ously, fairly, and with the fullest          homes were without such safe-
  measure of dignity.”                         guards. And without them, they had
• “The right to receive adequate and           become fat targets for litigation.
  appropriate health care and protec-          The numbers proved that this was
  tive and support services.”                  true, and all the joint underwriting
• “The right to prompt efforts by the          in the world could not and would
  facility to resolve resident griev-          not change this central fact. Nor
  ances, including grievances with             could any new insurance arrange-
  respect to the behavior of other             ments prevent the ultimate destruc-
  residents.”                                  tion of the industry or prevent such
  It is difficult to tell exactly what         long-term care services as might
the obligation or liability of the             survive from being priced beyond
facility might be in any of these              the means of all but the richest
cases, and those given above are just          elders in our state.

[30]                                                                     summer 2001
                     the jourNal of the james MadisoO institute


  It would, Florida’s legislators           fees in such cases.13
ultimately realized, be the far better        The bill passed on the very last
choice to place Florida’s nursing           evening of the 2001 legislative
homes on a footing similar to that          session, and when it did, Florida
provided in 1999 for other medical          successfully dodged the bullet that
facilities. The crisis would end by         would have killed our nursing home
including the long-term care indus-         industry. Though successful, it was a
try under a reasonable plan similar         very close call. For instead of fixing
to that contained in the tort reform        the problem, we might easily have
act, one that featured generous but         worsened it by doing nothing or by
nevertheless limited award ranges           establishing a joint underwriting
and attorney fee calculation param-         system without award and attorney
eters. Insurers would obtain the loss       fee controls that would have created
predictability they must have. Facili-      for us more problems for more years
ties would again be able to obtain          than we can imagine.
insurance and to anticipate the cost
of that insurance. And patients                           Author’s Note:
would retain the full range of rights       A three-year struggle to provide lawsuit
of redress. Moreover, Floridians            relief for Florida’s long-term care providers
would be able to find high quality,         reached a climax during the 2001 Florida
long-term care facilities to serve          legislative session. In research published for
them at a price they could afford.          distribution to members of the legislature
And wasn’t that the point? For, after       in March as part of our Perspective series,
all, what good would “residents’            JMI urged legislators to address the
rights” be if there were no place to        nursing home issue promptly and to adopt
reside?                                     a reasonable and responsible course of
  Florida chose to end its nursing          action. Such action was a necessity, we
home crisis by taking these simple          said, if Florida’s long-term care industry
steps. In addition to providing             was to be spared virtual extinction. Debate
funding under Medicaid that will            raged over the issue until the last day of the
help Florida’s long-term care facili-       session when both houses agreed on a bill
ties increase staffing and offer better     (SB 1202) that embodied the key lawsuit
pay, both of which will increase the        reforms JMI advocated including a
quality of care, the legislature ad-        limitation on awards and attorney fees.
dressed the litigation issue. In the        JMI is proud to have had a role in
section of the bill dealing with this,      fashioning this landmark action of the
the legislature capped the amount of        Florida legislature.
punitive damages at $1 million for
unintentional harms with an in-
creased penalty of up to $4 million         Peter Doherty is a senior policy analyst at
for harm done intentionally. They           The James Madison Institute and may be
also put reasonable caps on the             contacted via e-mail at
amounts attorneys may collect as            peterd@jamesmadison.org.

summer 2001                                                                           [31]
                               the jourNal of the james MadisoO institute


                     Endnotes                                       term Care General Liability and Professional
1
  For more years than nearly anyone in the Florida                  Liability Actuarial Analysis.” February 12, 2001.
                                                              6
      Capitol can remember, worker’s compensation               Ibid.
                                                              7
      has been a perennial issue. Beginning from the            Ibid.
                                                              8
      sensible notion that workers ought to be                  General Accounting Office of the United States
      compensated for job-related injuries, a                       Congress. “Report of the General Accounting
      regulatory nightmare has grown. Repeated                      Office on Nursing Homes.” September 28, 2000.
                                                              9
      legislative and administrative attempts to gain           Task Force on Availability and Affordability of
      some sort of handle on what does and does not                 Long-Term Care. “Informational Report of the
      constitute an injury, on how to equitably                     Task Force on Availability and Affordability of
      determine severity and fault, on awards and                   Long-Term Care for the Florida legislature in
      fees, on the relationship of awards to the                    response to HB 1993.” February 16, 2001.
                                                              10
      injuries sustained, on the premiums charged to             According to the Texas Senate Research Service,
      business and industry for coverage, on the legal              Texas, which has experienced some problems
      avenues available to plaintiffs, and on the                   with nursing home liability and insurance,
      defenses available to employers have had                      formed a joint underwriting association in the
      limited success.                                              hope it would ease the burden on the facilities.
2
  Florida House of Representatives. Final Bill Analysis             However, even though the problems in Texas are
      on HB 1993 (2000).                                            far less severe than those in Florida, the policy
3
  Journal of the Florida House of Representatives. March 6,         restrictions and premium levels of the pool
      2001.                                                         insurance has made the option unattractive for
4
  Aon Worldwide Actuarial Solutions. “Florida Long-                 facilities.
                                                              11
      term Care General Liability and Professional               Chapter 400 Florida Statutes.
                                                              12
      Liability Actuarial Analysis.” January 17, 2000.           Ibid.
                                                              13
5
  Aon Worldwide Actuarial Solutions, “Florida Long-              See SB 1202, 2001 Florida Legislature.




pRivatiZation (Continued from page 24)
    that when privatization generates                         the free markets that give life to that
    lower costs, officials may have                           freedom should be encouraged by
    multiple options for realizing the                        the privatization revolution. A better
    gain. They may choose to avoid                            and leaner public sector is much
    raising taxes or actually cut them,                       more than a bipartisan, good govern-
    passing the savings on to taxpay-                         ment issue. It is an imperative that,
    ers. Or they may simply take the                          when accomplished, will leave us a
    savings and squander them on                              freer, more responsible, and better
    some other dubious enterprise of                          served people.
    government. This is, again, an
    argument for vigilance, not
    against privatization.                                    Lawrence W. Reed is president of the
                                                              Mackinac Center for Public Policy in
Conclusion                                                    Midland, Michigan, whose web site
All citizens who value freedom and                            address is www.mackinac.org.




[32]                                                                                                 summer 2001
                                  the jourNal of the james MadisoO institute


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