Privatizing America’s “public property”

BusinessWeek

 Emily Thornton’s cover story, Roads to Riches, in the May 7th issue of BusinessWeek details the recent trend of State governments selling public assets – toll roads, parking garages, bridges and airports – to financial institutions and other private investors.  The governmental bodies that have done this so far, or who are considering, often point to their revenue shortfalls and increasing budget deficits as justification for supporting such moves. 
Thornton points out that a number of transactions have been completed over the last few years – the Chicago Skyway ,
Pocahontas Parkway (Virginia), the Indiana Toll Road and Chicago Downtown Parking System – while others are currently in discussions.

 

Chicago Skyway

In the short-term this cash influx can greatly benefit the governmental entity as they can eliminate debt and improve social services.  The potential long-term issues may very well outweigh the short-term benefits.  While a private entity could more easily raise prices in order to pay for upgrades, without the fear of committing “political suicide,” it could effectively price out lower income individuals from being able to take advantage of once publicly owned properties.

While it is fairly obvious to see the immediate benefits to the states and the private investors, the long-term effects of these transactions will not be truly felt for years to come.  I would hope that our state governments would proceed cautiously and not recklessly chase the dollars that are in front of their faces.  I can’t help but wonder what will happen when the other shoe falls.

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Filed under BusinessWeek, Chicago Downtown Parking System, Chicago Skyway, Emily Thornton, Government, Indiana Toll Road, Pocahontas Parkway, Privatizing

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