Facing a $3 billion budget gap next year, Gov. Chris Gregoire recently announced a renewed initiative to streamline state government. The governor created a 32-person panel to scour state agencies for efficiencies vowing, "There are no sacred cows."

Surprisingly she suggested that our scandal-laden ferry system could be sold back to the private sector. In the wake of a high-profile investigation by KING-5 News that revealed widespread abuses by unionized state ferry workers, Gregoire raised the prospect of privatizing the state ferry system. She pointed to British Columbia's BC Ferry Corporation as a possible model. But this "private" ferry company is not quite private. Its sole shareholder is the British Columbia government.

Over the years, problems with ferry worker unions and state regulators put Washington state into the ferry business. A strike in 1935 forced the Kitsap County Transportation Company to close, leaving only the Black Ball Line. Toward the end of the 1940s, the Black Ball Line wanted to increase its fares to compensate for increased wage demands from the ferry workers' unions but the state refused to allow this, forcing the Black Ball Line to shut down. At that point, the state took over the ferry system.

The governor's idea of privatizing the ferry system - or any other state service - cannot be to shift them to private companies and shackle those companies with the same costly restrictions and union work rules that bloat the cost of state government. That's not reform, it's just relocation.

Gov. Gregoire and the Legislature have to make it clear that their first priority is providing the best possible service to our state's citizens at the lowest possible costs. It cannot be preserving the power grip public employee unions have on every level of government.

Case in point: the West Seattle Water Taxi.

Since 1997, King County has contracted with Seattle-based Argosy Cruises to operate the West Seattle Water Taxi that runs during the summer between Seattle's Pier 55 to Seacrest Park in West Seattle.

But in 2007, the King County Council decided the county should take over the service. The state allowed King County to create a ferry district and levy a special property tax increase as long as the county agreed to use union labor.

The decision was a costly one for King County taxpayers.

In 2009, the public-private partnership with Argosy Cruises cost about $115,000 per month. In 2010, the cost of the county-run service is $339,000 per month. According to the Washington Policy Center, labor costs alone amount to $133,000 per month - higher than the entire operating budget under the public-private model. Ferry officials estimate that in 2011, the first full year of business, monthly operating costs will be $278,000 - more than double the cost of the public-private partnership.

Unless and until the governor and state legislators truly put everything on the table - including public employee contracts - there will be no real reform.

So far, they have not done so. While Gov. Gregoire says the state should provide only the most essential services, she opposes efforts to privatize state liquor sales, so voters will decide for themselves if the state belongs in the liquor business. Voters also may get an opportunity to end the state's monopoly on providing workers' compensation insurance.

The governor is right to focus attention on the dire need to make state government more efficient. But that won't happen until she and her fellow Democrats take on the state employee unions.



Don Brunell is the president of the Association of Washington Business. Formed in 1904, the Association of Washington Business is Washington's oldest and largest statewide business association and includes more than 7,000 members representing 650,000 employees. AWB serves as both the state's chamber of commerce and the manufacturing and technology association.