Cash-strapped states weigh selling roads, parks

ST. PAUL, Minn. — Minnesota is deep in the hole financially, but the state still owns a premier golf resort, a sprawling amateur sports complex, a big airport, a major zoo and land holdings the size of the Central American country of Belize.

Valuables like these are in for a closer look as 44 states cope with deficits.

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 has hinted that his January budget proposal will include proposals to privatize some of what the state owns or does. The Republican is looking for cash to help close a $5.27 billion deficit without raising taxes.

GOP lawmakers are pushing to privatize the Minneapolis-St. Paul International Airport and the state lottery. Both steps require a higher authority _ federal legislation in the case of the airport, a voter-approved constitutional amendment for the lottery. But one lawmaker estimated an airport deal could bring in at least $2.5 billion, and the lottery $500 million.

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.

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. Recommendations are expected next month.

Such projects could be attractive to private investors and public pension funds looking for safe places to put their money in this scary economy, said Leonard Gilroy, a privatization expert with the market-oriented Reason Foundation in Los Angeles.

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"Infrastructure is more attractive today than ever," Gilroy said. "It's tangible. It's a road. It's water. It's an airport. It's something that is _ you know, you hear the term recession-proof."

Unions don't like privatization deals out of fear that worker wages and benefits will be squeezed as private operators try to boost their profit by streamlining services.

Taxpayers, too, 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.

"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.

Some states struck major privatization deals well before 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.

But in September, investors walked away from a $12.8 billion bid to lease the Pennsylvania Turnpike for 75 years after legislators failed to act on the deal. And Texas lawmakers uneasy over a proposed private toll road system approved a two-year moratorium on such contracts last year.

David Fisher, who managed Minnesota's state-owned properties a few years ago under former Gov. Jesse Ventura, warned that the state has a hard time finding buyers for properties such as old mental institutions.

Fisher said some public properties belong in private hands, such as Giants Ridge Golf & Ski Resort, a top-rated getaway in Biwabik, and Ironworld, a museum and library in Chisholm. Both are owned and subsidized by Iron Range Resources, a state agency.

"Certainly those things could be privatized, I think without harm to the state, but I don't know that you could find the right buyer," Fisher said.

Comments

[RTIII]

"Privatize the profits, socialize the costs." Yup, the Republican way.
.

[BillyMae]

Anybody thought about cutting costs?

[lobear00]

How about the United States stop throwing away "Billions " of dollars a-day in their make believe wars. And stop "Invading and occupiying other countries . How about putting an end to the "Military Industrial complex, and all the high end salaries being paid to a bunch of military criminals.

[RTIII]

Right, the wars on Americans - like the War on Drugs, etc... All the so-called War On Drugs is is a means to criminalize our poorer young while creating both a prison economy and a police-state.
.

[Stud99]

All these states should just legalize gambling and prostitution and tax it. That way you get all the stupid peoples money.

[BillyMae]

And drugs!

[mphalen]

What do people expect? When you have tax cuts at the federal level, your state and local taxes will go up. That includes property taxes, sale taxes, license fees, registration fees, parking ticket fees, etc. And these are the taxes that hurt the middle class, working class and the poor most. This is becasue there is less money coming back from the fed to the individual states, especially the blue states. And couple that with unfunded and underfunded mandates from the fed, such as "No Child Left Behind", states are finding themselves with large budget deficits. And the states can only raise your taxes so much. So they have to find other ways to create revenues.
Privatizaton of our commons will eventually come to bite us in he butt (and already has in some places). But this is what the free marketeers want. You people want less government? Fine, but it will cost you so much more. Privatizing governmental services is neither more efficient or cheaper.

[jeffp26]

The NY Sate lottery is supposed to support education.

So who would we lease it to?

[sonoffestus]

The USA is so screwed.

[FZliveson]

The depth of your thinking is fathomless.
What would you propose, Son?
Step up and expose yourself to the crowd.
Inspire us.
Lead us.
Insult us.
Please don't just throw a spear into the crowd and say "Damn you!"
Find your power and bring it on.

[sonoffestus]

It is just a thought, you need to relax. I know the truth is hard to take. It's hard when one realizes that much of what you believed for many years is a myth.

[wadda]

...uh, you offered less than bin Festus.

Understanding there is a problem is the first step.

Understanding the extent is the next.

To paraphrase someone who thinks he's hot Scheiße:

The depth of *your* thinking is common.
What would *you* propose, sonny-jim?
Step up and expose yourself to the crowd.
Inspire us.
Lead us.
Insult us.
Please don't just throw a spear into a messenger and say "Damn you!"
Find your power and bring it on.

The US is so screwed. We've had 8 years of the W orst. We've had 30 years of myopic leadership and looting of the public wealth....and the twenty plus years prior weren't that great either.

We teeter on the brink of ecologic and economic catastrophe and you want to kick some poor bastard because he says "The USA is so screwed."

All I can say is, You're part of the problem, grow up.

[MakeAWish]

Any selling of public lands, state or federal, should be decided by a vote of the people. It should not be some back door, under the table, behind closed doors transaction made by some inept politician(s).

[deepfreezevideo]

Yes let's sell those atractive water systems so we can all experience Cochabamba.

[jeffp26]

Why can't politicians behave the way they tell us to, and save for a rainy day?

[totaldisbelief]

you're all a bunch of socialists.

[Durango]

I take that as a compliment.

[sonoffestus]

I was once accused of being "one of those European Socialist". I took it as a compliment as well.

[totaldisbelief]

So that " I've got a bridge to sell you " line is actually true?

[Tropiholic]

An infinite amount of money for Iraq and nothing for America, what a sad state of affairs this is!

[camper65]

An infinite amount of money to illegal aliens and no end in sight. What a waste!

[RTIII]

Yeah, blame others. What a piece o work you are.
.

[Skepticat]

Before you rush off to sell highways you might want to look at Ontario's highway 407 which is a privatized electronic toll road running east west above Toronto. It is about 70 miles from the North of Whitby to just East of Hamilton. A round trip from highway 400 - which is about halfway - to highway 403 outside Hamilton (about 35 miles) is $12.95 one way - if you have a transponder - add $2.00 per trip if you don't for weekday rush hour. Their website has a fee calculator - see "highway 407". Note the owners can increase the fees any time - there is no regulatory process.

[jahzilla]

Actually,
It's time to convert the oil, gas, timber and minerals to imminent domain.
Those resources are technically included in "the commons" and should benefit the nation instead of CEO's.
More realistically though?
Increase existing land usage percentages to 50% of net profit. The American people should be included as "shareholders".

[camper65]

Does the word Communism mean anything to you?

[yappnmutt]

. the people own the public lands. shouldn't we benefit from its lease to private parties? ongoing royalties are a normal business arrangement. that's communism???

[aweissnet]

Does poverty mean anything to you? Lots of people living in it. When the numbers reach some proportion, you might reconsider, your position. When civil unrest becomes so great that it erupts into something else, you might reconsider your position.

Capitalism was a trial and a failure. The proof is in the pudding. Corrrupt government, corrupt corporation. Greed had no bounds and the fallout is hitting. Mostly on the little people's heads.

Maybe we should model our government after those with a better, more stable one in place--with some longevity. Those tend to be what we call "socialistic" countries.

USA history was rather brief. Quite b!oody, with little time of peace and prosperity, relatively speaking--relative to other, more first-class nations.

[sonoffestus]

I agree! Bush was telling the world that Iraq's oil belonged to the Iraqi people, and since he's the decider I figure the resouces in the USA are owned by the American people. You mean Bush was wrong?