States Consider Selling off Roads, Parks to Fight Deficits
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By Amy Kronenberger
As 44 states struggle with deficits and the economic crisis, many are thinking of selling off toll roads, parks, lotteries and other assets to raise the desperately needed cash.
According to Fox News, Minnesota Gov. Tim Pawlenty has hinted at privatizing some of what the state owns, including the airport and the state lottery. In order for these things to take place, the airport will need federal legislation and the state lottery will need a voter-approved constitutional amendment. If approved, the airport could bring in at least $2.5 billion and the lottery could take in $500 million, putting a large dent in Minnesota’s $5.27 billion deficit.
Other states, including Massachusetts, New York and Illinois, plan to take similar measures to ease deficits.
Leonard Gilroy, a privatization expert with the market-oriented Reason Foundation in Los Angeles, said private investors and public pension funds looking for places to put their money in these tough economic times might be attracted to these projects.
"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."
However, taxpayers can lose out if the arrangements don’t work, said Mark Price, a labor economist with the Keystone Research Center in Harrisburg, Pa. And sometimes, even if they do, higher tolls on privatized roads can push drivers to use 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.
