THE BLOG
05/17/2009 05:12 am ET Updated May 25, 2011

Chicago: The Privatized City of the Future

In December of last year, the city of Chicago pulled off a $1.2 billion sale of the city's parking meters. Information to the public was scarce until the deal was done -- the sale of this public property was rushed through the City Council in less than a week. A similar deal would've gone down last week had a $2.52 billion deal to privatize Midway Airport not been delayed due to financing details.

City assets being sold is nothing new in Chicago. Mayor Richard M. Daley has been hosting a city-wide garage sale since 2005, when he leased the Chicago Skyway, an expressway connecting the city to Northern Indiana, for 99 years. He's sold parking lots and trash pick-up service; he's even begun to privatize some of the police force, allowing an outside company to regulate traffic cameras and monitors.

Meanwhile, the city's operations are crumbling. The Chicago Transit Authority, for example, suffers from what they call 'Doomsday' scenarios every six months or so, where bus lines are threatened to be discontinued should funding not, somehow, increase. Last year, the CTA had to beg then-Governor Rod Blagojevich to bail them out. Had he not, thousands would've been scrambling to find new ways to get to school and work.

Yet as desperate as Daley's used-car salesman auctions are, they're also illogical. For starters, Chicago currently has one of the highest sales tax in the country. This is a mayor who, in the midst of this country's worst mortgage crisis ever, actually raised property taxes -- mere months after a re-election campaign where he vowed not to. So at a time when the city government and operations are doing less and less, people are actually paying more for it.

This, of course, is the dream of business-minded elected officials: the inverted funnel. Have boatloads of cash come in, and have none go out. Eradicate the idea of the public good. As Chicago sells off more and more, they'll be required to do less and less. Will there be tax breaks? More money for public welfare? Money to schools? Thus far in Chicago, those answers have been answered with a resounding "no."

Chicago should stand as a cautionary tale warning of the threats of municipal privatization. The parking meter deal gave Chicago Parking Meters (an entity that didn't exist before their bid was submitted, which raises eyebrows) rights to meters for 75 years -- like the Skyway sale, this takes any opposition out of the voter's hands for a lifetime. With citizen opposition out of the way, CPM has already doubled rates in most areas, and has plans to triple costs soon. There's also the question of finances for the city. In typical Daley fashion, there's been no transparency, allowing for speculation as to how Chicago will be receiving its funds. If the bulk of the $1.2 billion is paid, let's say, in the next five years, where does that leave city financing in 20 years? In 75?

Currently, Chicago is looking at an $82 million budget shortfall in 2009. Chicagoans should wonder what Daley's response will be if that debt registers any higher. What will he sell then? The schools? The police department? The United States has already seen private security forces surpass the military in foreign might -- it isn't absurd to believe the same thing can happen in cities across the country. This recession is forcing other municipalities to be creative in its methods for raising cash, quick. Luckily for them, Daley has publicly praised the benefits of privatization. According to him, "there's only so much a government can do." Such things being, for example, governing.

This recession shouldn't be a one-stop excuse for all of a municipality's financial woes. There's also the culpability for inefficient operations, and that rests on the shoulders of elected officials. Daley's short-sightedness gives him the here-and-now solutions he needs, without having to examine city malfeasance or waste in the slightest. Nothing will change fundamentally, which means the city will be in the same budget-crisis mess over and over again. That's why, long-term, it will be the taxpayer who will have to pay, just as they do now. The question is, if this trend of privatization of public goods continues, what exactly will they be paying for?