Durbin: Tread carefully before selling public assets
Link to article here.
Durbin gets it. However, his bill needs to go farther. His bill still allows governments to enter into public private partnerships -- the only "protection" is disclosure of the terms and an insurance policy that the feds get their money back. That, however, isn't much protection for the actual taxpayers being asked to pay the daily toll taxes plus the profits of a foreign company in these government-sanctioned monopolies over our PUBLIC infrastructure.
Tread carefully before selling public assets
Federal taxpayers must be protected
By Dick Durbin
Special contributor to the Chicago Tribune
7:06 PM CDT, June 23, 2011
We all know the story of Chicago's parking meters — for a one-time payment of $1.15 billion, we turned over control of a public asset to a private investor. But now, only two years into a 75-year lease, that money is almost gone and the costs just keep going up for Chicagoans and visitors.
From parking meters to airports, public assets around the country are now seen as "cash cows" that can be sold or leased by cash-strapped state and local governments for a one-time payment.
Having billions of dollars immediately available to plug budget holes without raising taxes is very appealing. And to the delight of Wall Street investors, state and local governments often fail to ask the important questions or consider the long-term impact.
In 2006, Indiana struck a deal with foreign investors to lease the 157-mile Indiana Toll Road for 75 years in exchange for a one-time payment of $3.8 billion. Under the deal, the investors own the right to collect tolls, which they plan to increase in the coming weeks. For truckers that fee will rise to $36.20 from $35.20.
Is it surprising when foreign investors — with no stake in the road other than their interest in turning a profit — continue to raise tolls?
Whether you agree or disagree with privatization, two things are obvious. First, taxpayers need to be asking more and better questions before handing over control of critical public assets like a highway, an airport or a parking meter concession. And second, Uncle Sam is being played for a sucker.
In Washington we're broke, so for every dollar we spend, we borrow 40 cents from China, Saudi Arabia and others. We then give these borrowed funds to state and local governments because they can't afford to build highways and airports on their own. Now many of these same governments are selling and leasing these assets without any payback to the federal government.
It is time for the federal taxpayers to have a seat at the table and a return on their investment in these projects. Taxpayers across the U.S. have invested hundreds of billions of dollars building our nation's infrastructure and that investment should be protected.
Last week, I introduced legislation that would require state and local governments to take a hard look at the impact these deals are having on the federal taxpayer and the people that use these transportation assets. The Protecting Taxpayers in Transportation Asset Transfers Act would require full disclosure of the terms and conditions of any privatization of an asset that was built with federal tax dollars.
The bill would attach a lien to existing federally funded major transportation projects that have received more than $25 million in federal funding or have a value over $500 million. The lien would only be removed after state and local governments repay the depreciated value of federal funds used to build and maintain the asset.
Instead of incentivizing quick, short-term decisions, the federal government should be asking the tough questions when governments turn over publicly funded transportation assets to for-profit operators. This legislation will make sure those questions are answered before we sell our public assets.
U.S. Sen. Dick Durbin, D-Ill., is the assistant Senate majority l