Home > Uncategorized > Gov. Patrick should look at contractors’ salaries too

Gov. Patrick should look at contractors’ salaries too

The Boston Globe ran a front-page story yesterday announcing that Governor Patrick is reviewing the salaries of chief executives and lower-level workers at the state’s 42 independent agencies and will reduce those he believes are excessive.   Many of these executives earn more than twice Patrick’s own salary of $140,000.

The governor is also seeking to combine agencies or eliminate jobs to further cut costs in the next year.  These independent or quasi-public agencies run the gamut from Massport, which runs Logan Airport, to the Massachusetts Technology Developmental Corporation, which provides venture capital funding to startup companies.

This is all well and good, but we would urge the governor to take a look as well at salaries in the state-funded human services vendor industry in Massachusetts.   There are hundreds of these companies that contract with agencies in the Executive Office of Health and Human Services, and the salaries of the executives running them are often above $100,000 as well.   In 2009, we looked at a few of the firms that contract with the Department of Developmental Services.   A few examples from among the vendors that we reviewed that year were the following:

  • Vinfen:  8 executives making over $100,000 a year, with the president making $376,000, including benefits.
  • Justice Resource Institute: 7 executives making over $100,000.
  • Seven Hills: 4 executives making over $100,000, with the president and CEO making $520,600, including benefits.
  • Work, Inc.:  5 executives making over $100,000.

These salaries are a problem because there are so many of these companies contracting with the state.  As services once provided by state employees have been privatized over the past 30 years, the number of people drawing high salaries in the contractor industry has grown exponentially.  Those salaries are part of the cost of care in the community-based system, which the taxpayers fund. 

While the administration has tried to portray the DDS developmental centers, for instance, as unduly expensive, there used to be only one set of administrators in each center drawing relatively high salaries (although few, if any, of them made salaries above $100,000).  

The executives of the contracting firms that have replaced the developmental centers and other state-run operations constitute a new and even more expensive layer of bureaucracy that is soaking up state funds.  This is one reason why we believe privatization in general doesn’t result in predicted savings.  

There is also an increased potential for fraud and waste in our highly dispersed, contracting system because the state doesn’t have the capacity to oversee it nearly as well as it was able to oversee functions once provided by state employees.  This has left the contracting system vulnerable to fraud, waste, and poor care provided by inadequately trained direct-care workers, whose salaries, by contrast, are low.

In Wisconsin, we are witnessing a battle over the value of public service as state employees there rise up to defend their collective bargaining rights.  Let’s not forget, though, that privatization over the long run is just as effective as the direct elimination of collective bargaining agreements in weakening public employee unions and workers’ rights.  Both strategies ultimately throw people out of work and produce a largely low-paid, non-union workforce.

And both strategies tend to result in an expansion of contracted services as the public sector loses more and more of its capacity to manage its affairs due to continual downsizing of its workforce.

The difference between these two strategies is that privatization is not seen as being as overtly confrontational as eliminating collective bargaining.  So our own governor can engage in major privatization initiatives that weaken public unions while still claiming to be a friend to them.  

That’s why we hope that in addition to scrutinzing the salaries of the executives of the independent agencies, the Patrick administration will at least take a look at the state’s human services contracting system.  We think there is as much, if not more, fertile ground for savings there.

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  1. Ed
    February 28, 2011 at 4:42 pm

    It’s a safe bet that a large segment of the public assumes that “privatization” means privately funded. But since these directors’ salaries are funneled through the Dept. of Developmental Services, taxpayers are still footing the bill, with even less transparency and accountability. How does that make sense?

    • February 28, 2011 at 8:28 pm

      Ed, we just have to trust the administration that a privatized system is better even though, as you say, there is less transparency and accountability, higher salaries paid to a growing group of executives, and lower pay to direct-care workers. Somehow this will all translate into savings to the taxpayer and better care for DDS clients. How that will all happen is beyond my pay grade.

  2. ROBIN DEININGER
    March 1, 2011 at 1:08 am

    Will someone PLEASE figure this whole thing out? The very BEST care is recieved by my sister and her housemates at Wrentham Developmental Center. The salaries of her very loving, kind, respectful, supportive direct care staff (like family) is paltry, compared to all these privatized care executives and staff. Why are so many intelligent people blindsided by the idea that great care doesn’t necessarily have to happen in the community. Wrentham is the best “community” I know.

  3. Mary Ann Ulevich
    March 1, 2011 at 2:10 am

    I am guardian of my cousin, who has been at Templeton for 37 years. The staff are his family…looking for community placement has been stressful for Tom, and he is already mourning the loss of his home. I believe public and private providers should earn a living wage; however, the inflated executive private salaries are excessive, keeping lower paid workers even lower. The turn over among private vendors’ staff is disheartening and contributes to a lower standard of care for our most vulnerable family members. I agree that an investigation is long over due. Taxpayers, family members … we all deserve a just, equitable system of care.

  4. Sue S
    March 1, 2011 at 3:49 am

    I remember when COFAR took a look at these executive salaries and if I remember correctly at that time there were 300 vendors on the DDS approved vendor list that is posted right on the DDS website. These four examples–just 4–account for just shy of $4,000,000 in executive salaries all at taxpayer expense. Not all of these executives are making six figure salaries but its probably a safe bet they aren’t making $25K a year either. Do the math.

    I also remember that these vendors take in hundreds of millions of taxpayer dollars from various agencies (not just the DDS) through their numerous affiliates. Its a shell game. The taxpayer is paying for it all–its just coming from different agencies so it easier to lose track of it all and fool everyone into believing it costs less.

    Some get special financing arrangements to construct community based housing that are no interest/no payback-in other words free money. When you put it all together its pretty easy to figure out why there is so much lobbying going on to privatize–$$$$$. Where else in the world would you get free financing to build a house–a free house, with guaranteed occupants (there is always a waiting list to get in), with guaranteed rental income via the guaranteed occupant’s low-income housing subsidy and social security, and charge the people (taxpayers) that gave you the free house and guaranteed occupants property management fees on that same free house. I understand the need for special financing arrangements so that the housing remains affordable but not for the sake of someone making $500k on the taxpayers.

  5. KAH
    March 1, 2011 at 1:40 pm

    I think Ed’s correct, people don’t realize these agencies are publicly funded – yet don’t have to follow state procedures in hiring, compensating or in spending funds. Along with the salaries, the spending on consultants and other non-essentials is out of control. There seems to be no controls on how state funds are used.

  6. Brian S.
    September 19, 2011 at 6:22 pm

    Here’s a little experiment. Try googling vinfen (or any other “private vendor” of state services) and see if you get a balanced range of information. i got page after page of vinfen propaganda.

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