Privatization of Illinois municipalities.

• Author: Johnson, Robin A.

Editor's note: The following article presents excerpts from Competition for City Services: Has the Time Arrived?, a report of a 1995 survey and comprehensive study of contracting for services and related issues in Illinois municipalities. The report was published in December 1996 by the Illinois Office of the Comptroller Local Government Affairs Division in cooperation with the Illinois Municipal League and the Illinois Institute for Rural Affairs, Western Illinois University. The full report can be accessed on the World Wide Web at www.comptroller.state.il.us.

Municipalities in Illinois face many challenges to their fiscal health. Stagnant tax [TABULAR DATA FOR EXHIBIT 1 OMITTED] bases, opposition to tax increases, decaying infrastructure, and intergovernmental mandates are forcing local officials to find new and less costly methods of providing public services. In response to these challenges, many municipal officials are searching for new ways to provide public services at less cost. One approach used by officials in the past is contracting with private sector firms to provide services. While privatization has always been a management option in the public sector, its use has grown during the past two decades due to continuing financial pressures and greater acceptance by government officials and the public.

To measure the extent of contracting for services and related issues in Illinois municipalities, the Local Government Affairs Division of the Office of Illinois Comptroller Loleta Didrickson, the Illinois Institute for Rural Affairs at Western Illinois University, and the Illinois Municipal League initiated a comprehensive study of privatization based on experiences reported in a mail survey of Illinois municipalities and interviews with municipal officials. Questionnaires were sent to 1,284 municipalities and 516 responded with usable questionnaires in late 1995, a response rate of 40.2 percent.

The Illinois study of municipalities is one of a very few of its kind, perhaps the only one, undertaken in the United States. The questionnaire addressed four main issues. First, municipal officials were asked which types of services are provided by cities either using municipal employees or through contractual arrangements with private or public agencies and about their satisfaction with the delivery method in either case. A total of 82 potential municipal services were included in the questionnaire. Second, respondents were asked about the...