Like families pawning the silver to get through a tight spot, states such as Minnesota, New York, Massachusetts and Illinois are thinking of selling or leasing toll roads, parks, lotteries and other assets to raise desperately needed cash. Minnesota Gov. Tim Pawlenty is looking for cash to help close a $5.27 billion deficit without raising taxes. 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. (A few years back) Indiana … brought in $3.8 billion in 2006 by leasing the Indiana Toll Road for 75 years.
In New York, Democratic Gov. David Paterson … look into leasing state assets, including the Tappan Zee Bridge north of New York City, the lottery, golf courses, toll roads, parks and beaches.
Taxpayers … can lose out if the arrangements don't work — and sometimes even if they do, said Mark Price, a labor economist with the Keystone Research Center in Harrisburg, Pa. Higher tolls on privatized roads can push drivers onto state-operated roads, wearing them down faster and raising public costs over time.
"You're privatizing some profits in this process and socializing some losses," Price said. Selling or leasing public assets can produce an immediate infusion of cash for the state, while foisting the tough decisions, such as raising tolls, onto private operators instead of the politicians.
Where have you heard “socializing some losses” before? Wall Street. Politically speaking, selling off toll roads avoids raising tolls and angering voters. In privatized hands tolls are expected to double or triple, crippling family spending, and shifting blame to a company that could care less.
These increases are already spelled out in the terms of Indiana’s lease. It’s a formula you’ll see at airports, library’s and parks. These are all short term solutions long promoted by Republican think tanks and politicians.
"The downsides are often after they leave office," said Phineas Baxandall, a researcher with the consumer-oriented U.S. Public Interest Research Group in Boston.
Disaster capitalism at work.
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