States looking to pawn off airports, roads, parks to get out of debt

December 28, 2008

(chattahBox) – During very tough economic times families often faces sacrificing and even selling ‘luxury’ items to get by. And with the current economic slowdown some states are thinking the same way and are considering selling or leasing off some of their premiere holdings such as golf resort, sports complex, airports, zoos and huge land holdings. Many of the 44 states coping with deficits are looking into ways to hock their way out of debt.

Minnesota Gov. Tim Pawlenty has hinted that his January budget proposal will include proposals to privatize some of what the state owns perhaps including the Minneapolis-St. Paul International Airport and the state lottery. The Republican is looking for cash to help close a $5.27 billion deficit without raising taxes. In New York, Democratic Gov. David Paterson appointed a commission to look into leasing state assets, including the Tappan Zee Bridge north of New York City, the lottery, golf courses, toll roads, parks and beaches. Massachusetts lawmakers are considering putting the Massachusetts Turnpike in private hands. That could bring in upfront money to help with a $1.4 billion deficit, while also saving on highway operating costs. Selling or leasing public assets can produce an immediate infusion of cash for the state, while pushing off the tough decisions, such as raising tolls, onto private operators instead of the politicians.

Some states struck major privatization deals before the worst of the economic crisis hit. Indiana, for example, brought in $3.8 billion in 2006 by leasing the Indiana Toll Road for 75 years. Chicago stands to collect $2.5 billion by leasing Midway Airport, if the federal government approves, and has raised an additional $3.5 billion since 2005 through deals for the Chicago Skyway toll road, parking ramps and parking meters.

The selling off of some public properties might be better off in private hands, but there are many dangers too, that make this a really bad idea. So much for state lotteries that were justified as means to support our schools. And it’s just a matter of time when higher tolls on privatized roads will push drivers onto state-operated roads, wearing them down faster and raising public costs over time. And I don’t know which sounds like a worse or more ironic scenario.  Foreign entities perhaps in charge of key public infrastructures, or US corporations buying up state assets using the federal tax payer dollars that helped bail them out and stake them in the first place.


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