Wednesday, February 16, 2005
It's rather ironic that out-of-control growth of government spending is a lot more effective at driving privatization of government services and assets than all the well-reasoned policy recommendations of all the free-market economists in all the world...
Well, they'll have to put a toll on the Brooklyn Bridge first -- but that can be done.Pataki Taking a Cue From Sale of Chicago Skyway
Faced with a giant projected budget gap and a wobbly credit rating, the city of Chicago decided to pull the trigger last year on a plan it had been contemplating for nearly a decade: the privatization of an eight mile toll road known as the Skyway.
A Spanish-Australian consortium paid Chicago $1.83 billion to operate the road and collect tolls on it for 99 years. It was the largest cash transaction in city history, easily closing the projected $220 million budget shortfall...
In New York, where health-care costs eat up a larger and larger share of tax revenue each year, state officials have followed the Skyway project with interest. As a sign that Governor Pataki liked what he saw, the executive budget he issued last month included a proposal allowing for the privatization of toll roads, bridges, and tunnels...
Hey, maybe when the federal government's unfunded $41 trillion liability for Medicare, Social Security, and US government employee retiree benefits has to be paid down for real around 30 years from now ($41 trillion today, it will be a heck of a lot more by then) Congress will sell a 99-year lease on the Grand Canyon to Great Adventure and America will finally become libertarian.Despite reports that the Triborough Bridge and the Queens Midtown Tunnel may be on the auction block, aides to Mr. Pataki said the governor has not yet identified specific assets for privatization...
Mr. Leslie, executive director at Macquarie Securities, a Manhattan-based subsidiary of the Australian firm ... cited the New York State Thruway as an asset Macquarie might want to lease. Preliminary estimates suggest the state could fetch $6 billion for rights to run the 641-mile highway.
At a recent meeting with leaders of the United Federation of Teachers, the Senate majority leader, Joe Bruno, a Republican, suggested using proceeds from the proposed privatization of the state-run Health Insurance Plan of New York toward state spending to resolve the school-financing lawsuit.
Mr. Bruno, insists that the state will not raise taxes to cover the more than $20 billion extra that New York City schools are to get in the next five years...
[The president of] Civic Federation of Chicago, a nonprofit government watchdog, Lawrence Msall, said few people in Chicago complain about the overall impact of the Skyway deal. He said that Chicago got far more money than he and others had anticipated, and that the infusion was not only desperately needed as a source or revenue but also helpful in freeing the city from an asset that is better operated by a private entity.
"The city had a mounting long-term debt problem, and the credit agencies were warning them about it," Mr. Msall said. "Ninety percent of our property taxes were going to debt and pensions. I think Governor Pataki in New York could share the same kind of financial benefit most rational people would say we got from the Skyway deal."
A recent report from the New York State comptroller, Alan Hevesi, painted a grim picture of the state's financial situation. It said that despite legislative efforts to control debt in recent years, the state's total debt has grown to an estimated $49 billion today from $14.4 billion five years ago... [NY Sun]
[Hat tip to Roland Patrick for hitting the post button before me. Now stop doing that.]
