June Web platform

Last year, Chicago, inspired by its successful sale of the Skyway toll road, sold the concession on the city’s Downtown Parking System to a private company (full story) . Other cities also have sold the concessions on their toll roads.

American City & County asked the readers of its weekly e-mail newsletter if they think the sale of concessions on transportation assets, such as toll roads, parking lots and tunnels, is a good way to raise money without increasing taxes, or does it give the private sector too much influence over public services?

“In the future, local governments are going to have to continually find creative ways to fund basic municipal service provisions in light of decreasing federal transfers and domestic spending cuts as entitlements inundate the federal budget. Domestic program spending will decrease to 30% of the total budget by 2017 and mandatory spending, which includes major entitlements, will increase to 63% of total spending by 2017 as forecast by the [Congressional Budge Office]. If monetizing assets produces dependable annual revenue streams that could fund other municipal services while absolving them of recurring maintenance costs, then more local governments may begin to examine these types of arrangements.”
— Gary Hamer, capital planning and research analyst, Tulsa, Okla.

“The sale of transportation assets associated with highways is one way of putting the roadway system financial platform on par with rail and air transportation. I understand this asset transfer references toll roads, not all public streets, but the financial stress these other modes have faced would still apply. [It is fair to use] application of user fees, such as tolls and tickets, to support our right to travel, but the risk [of] preventing that right by eliminating services due to poorly managed competitive private interests concerns me. The decline of the inter-urban rail lines that used to serve many urban areas, and the current dire straits of the airline industries, are examples. These modes have a lot in common with regards to their private funding structure with reliance [on] the public for service. I believe in the right to travel, and for me, the responsibility of protecting that right rests with the general population, not a boardroom.”
— Nancy Reger, data manager, Mid Ohio Regional Planning Commission,
Cols, Ohio

“I strongly object to the disposal of public assets to private ownership. The current political mythology is that the private sector always does things better, cheaper and more efficiently. This just isn’t true. Publicly owned assets are very often well run with pride, care and good stewardship. Private enterprises are often run so that assets are left to deteriorate while the income that should be going to improving the assets is diverted to enhancing the wealth of upper level managers and owners. Witness the disparaging divergence in the amount of wealth in the hands of the upper few [as opposed to wealth belonging to] the general public in this country.”
— Jeff Ekola, real estate agent, Madison, Wis.

“I am concerned that, once [a public asset is] in the hands of privateers, maintenance will go down the tubes. All they are interested in is the bottom line, and if maintenance costs too much, guess what the priority will be. Assets constructed with tax dollars should remain the property of whoever built them (or in a perfect society, the property of those who paid for them in the first place — the taxpayer) and not the bidder with the most money.”
— Ramon F. Dinsdale, retired city engineer, Cleburne, Texas

“I believe that [most] of our [society’s] inefficiency has been created by government moving in to do what private commerce can do better. We need a sound transportation system, but I feel that a well-regulated, privately run economy is the best. Private enterprise is going to seek the most profitable avenues, [and] if more service is needed, more will be added. This approach will not only reduce the inefficiency but [also] increase the ability of the government to govern.”
— Walt Le Couteur, business administrator, Bread Of Life Mission, Seattle