By Chris Lane
By Jeff Balke
By Aaron Reiss
By Angelica Leicht
By Dianna Wray
By Aaron Reiss
By Camilo Smith
By Craig Malisow
The first tier is limited to career center operators -- those agencies, such as Gulf Coast Careers of Harris County, that will assess clients and make the appropriate referrals to education and training programs or, in some cases, actual employment. The second tier is limited to agencies or contractors like Lockheed Martin that can provide occupational training and education to those referred by the career centers.
Agencies that do both -- such as SER and Employment Training Centers, a for-profit company that operates 16 full-service training and placement centers in Houston --will be forced to cut their operations in half if they want to compete for welfare-employment funds. Some organizations might not be able to survive the operation.
"In the long run," says state Representative Garnet Coleman, "I think all of this will be hurtful to the infrastructure of nonprofit, community-based organizations that have been willing and able to provide these services to people they are closer to."
Just as uncertain is how a profit-driven behemoth like Lockheed Martin, which inspired the term "corporate welfare" way back in 1971, will achieve its goal of getting people off the dole and into meaningful jobs. Indeed, since the corporation jumped into the social-service business in the early 1990s, it has suffered several infamous failures that have cost taxpayers millions of dollars.
Last summer, Connecticut canceled a $14.3 million contract with Lockheed Martin IMS after a faulty computer system built by the corporation nearly delivered $8 million in overpayments to foster parents. In California, Lockheed Martin was dumped after the cost of a new computer system to track child-support payments ballooned from $99 million to $277 million. Unfortunately, the contract limited Lockheed's liability to just $4 million, meaning taxpayers will have to foot the bill for -- well, you do the math.
Of greater concern is Lockheed's motivation, which, if its shareholders have any say in the matter, is to make a profit. Before the federal government squashed it last May, Lockheed was on track to manage the Texas Integrated Enrollment System, a plan to privatize public-assistance programs, including determining who is eligible for them.
Lockheed had proposed to "divert" two million recipients of welfare and unemployment benefits into job-training and -placement programs. Considering that the state's largest job-training program accommodates only 30,000, Lockheed's proposal seemed ridiculously optimistic. It also got people thinking about the kind of jobs and training people would be forced into so Lockheed could meet its performance-based goals.
Coleman, who co-authored the welfare-reform legislation, says he is wary of the state's rush to privatize its welfare-employment services. Coleman points out that under the new federal welfare law, those people who do not have a job in two years will be tossed off the dole. And if they do have a job, they'd better hang onto it, because there is now a five-year lifetime cap on welfare benefits.
"I'm not a fan of the way we are doing this," Coleman says. "For-profit entities have to satisfy their owners or stockholders, and a lot of times, they may be able to create certain savings in the short run. What we have to be concerned with is the people who receive the services. The reality is that there are people who need the services, and if they do not get them, they will be off the rolls."
Coleman says privatization will reduce the federal and state dollars available for agencies like SER, which will have to find other sources of funding or shut their doors.
Herlinda Gonzalez, executive director of SER, says she's committed to somehow finding the money to continue the agency's programs. In the meantime, however, her most immediate fear is for students enrolled in her agency's six-month business-training course. The next class begins in April, but if SER loses its funding come July 1, the class might not make it to graduation.
"This is a beautiful program that has had spectacular results," Gonzalez says. "But those students who start in April won't be able to finish their training."
A question worth asking is: How is it that the fourth-largest city in the country -- a major urban metropolis populated by 60 percent black and Hispanic residents, many of them poor -- is forced to compete with 13 largely rural counties for social-service dollars?
The situation dates back to January 1995, when state Comptroller John Sharp drew up something called "A Partnership for Independence," a reform package aimed at streamlining the state's public-assistance programs. Responding to Sharp's lead, as well as signals vibrating down from the Republican-controlled Congress, the state Legislature passed the Texas Welfare Reform Act in May 1995.
The act consolidated a host of programs formerly run by the Texas Employment Commission, the Texas Education Agency and the Department of Human Services under the newly created Texas Workforce Commission. The TWC is rather unique in that its primary purpose seems to be to put itself out of business.
Toward that end, the TWC created 28 geographic "workforce-delivery areas" around the state and turned over control of programs that help welfare recipients, displaced workers and the unemployed to 28 local boards. The Gulf Coast Workforce Development Board was created in July 1995, and its 34 original board members appointed by the Houston-Galveston Area Council, a government agency that coordinates long-range planning for the region.