Forty-four states are deep in the hole financially and are willing to do anything to raise cash. This includes selling or leasing roads, parks and, in the case of Minnesota, the Minneapolis-St. Paul International Airport.
The Associated Press is reporting that Minnesota Governor Tim Pawlenty is hinting that his January budget will include privatizing much of what the state owns or does. Two of the state operations in consideration for privatization are the Minneapolis-St. Paul International Airport and the state lottery. One lawmaker thinks that by privatizing these operations, Minnesota could bring in at least $2.5 billion and $500 million for the lottery. Doing so will help close the $5.27 billion deficit Minnesota is facing.
Massachusetts lawmakers are considering privatizing the Massachusetts Turnpike. That could help with a $1.4 billion deficit, while also saving on highway operating costs.
Leonard Gilroy, a privatization expert with the Los Angeles-based firm Reason Foundation, said that “such projects could be attractive to private investors and public pension funds looking for safe places to put their money in this scary economy.”
Unions, however, feel that privatization could squeeze workers and benefits as private operators try to boost their profits by streamlining services, which includes laying off workers and cutting benefits.
Taxpayers can also pay the price according to Mark Price, a labor economist with Keystone Research Center. According to his research, higher tolls on private roads could push drivers to use state roads, wearing them down faster and raising public costs over time.
David Fisher, who managed Minnesota’s state-owned properties a few years ago under former Gov. Jesse Ventura, noted that some things could be privatized, but the hard part is finding the right buyer.
Financial pressures are making governing changes, that once would have been strictly off-limits, the subject of sharp debate in state houses this coming year.
