State and Local Issues

States Privatizing Welfare Administration

A number of states have turned to private companies to administer their welfare programs. Experts generally agree that injecting competition into the welfare picture has made programs more efficient.

  • More than 30 states have now turned over parts of their welfare systems to private contractors.

  • Privatization efforts vary from simply placing people in jobs to deciding who gets welfare.

  • Companies big and small, as well as nonprofit organizations and even existing state agencies, are vying for the contracts.

  • Prospective changeovers in parts of Florida and Arizona will soon see private companies deciding who gets welfare, food stamps and Medicaid.

"It's pretty well universally acknowledged that the old public, federally funded programs have been largely unsuccessful," says Jason Turner, who designed and ran Wisconsin's welfare system before taking over New York City's program earlier this year.

Source: Richard Wolf, "Public Aid Going Private in Many States," USA Today, August 3, 1998.


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