Chicago Suburb Partially Privatizes Its Fire Department

Published July 20, 2015

Highwood, a Chicago suburb, is supplementing its public fire department and paramedic services with private contractors.

The Highwood City Council voted to approve a contract with Paramedic Services of Illinois to supply the city’s fire department with two firefighter paramedics for each duty shift. At all times, at least half of all firefighters in the city will be private contractors, in addition to the pool of existing full-time and part-time public employees.

Same Service, Less Cost

Ted Dabrowski, vice president of policy for the Illinois Policy Institute, says Highwood’s partial privatization helps protect taxpayers in more than one way.

“Many … of the hundreds of fire department pension plans across the State of Illinois are very underfunded,” Dabrowski said. “What’s happening is that many municipalities are being forced to cut city services in order to fund police and fire pensions. Privatization is one of the ways we can actually handle the problem without diminishing the service quality for a municipality.”

Privatization allows local governments to maintain quality service without cutting pension benefits or wages.

“It certainly has to be an option,” Dabrowski said. “If the unions don’t want to negotiate lower costs, if the government doesn’t want to provide a way for cities and municipalities to manage their skyrocketing pension costs, then privatization has to be a viable option to find a way to continue to provide the service at a cost that’s manageable and predictable for city government.”

‘Much More Efficient’

Walter Block, an economics professor at the Loyola University in Chicago, says it is important for elected officials to understand the value of privatization.  

“The market is much more efficient than government because of the weeding-out process,” Block said. “If private enterprise does a bad job, it loses money and eventually goes broke. If the government does a bad job, it just keeps going. It raises taxes.”

Collecting Evidence

Block says more local governments should experiment with privatization.

“The more things get privatized, the [more test cases we have,]” Block said. “We already have some test cases, like the [United States Postal Service and FedEx.]

“‘Governing least’ means privatizing things,” Block said. “You need fire protection, you need sanitation, you need police … and if government is to govern least it has to allow private enterprise to take over and [so it can] get out of the way.”

Amelia Hamilton ([email protected]) writes from Traverse City, Michigan.

Internet Info

Rafael La Porta and Florencio Lopez-de-Silane, “The Benefits of Privatization: Evidence from Mexico,” National Bureau of Economic Research: