What Privatizing Means
Chicagoans are rebelling against the incredibly high parking meter increases since the city leased the parking operations to Morgan Stanley. People are painting over the meter windows, ripping them out of the cement and removing the stickers that are legally required on each meter in order for Chicago Parking Meters, LLC (a/k/a Morgan Stanley) to charge 28 quarters for an hour of parking. Here, some people are bent out of shape over a $.50/hour increase; I can only imagine the “tea party” the suburban shoppers in the Third Ward would throw if we did what Chicago is doing.
What Chicago’s parking snafu shows is that not all privatization is going to lower our costs, as some privatization supporters proclaim in their quest to remove as many services from the government payroll as possible. When an entity is in place to serve the community good, it puts people ahead of profits. Some of our most essential public services are doing this every day. For example, the Public Service Commission allows for a benchmark rate of return of around 7.4% for municipal water utilities after recovering costs. In MMSD’s case, it’s rate of return in 2008 was less than 1%. If we lease the water system to a private entity, do you believe they’d tolerate a 1% rate of return? Not likely. We’d see our water rates rise astronomically. In the case of our airport, privatization would bring about higher fares and increased prices for food and — gasp! — parking.
If we don’t sell off our profitable government assets, we’re going to need to raise taxes or fees in order to come close to sustaining our current levels of service. Is privatization the proper way to balance our budget or is it a regressive policy that will hurt the most vulnerable taxpayers? I believe that raising water rates would be horribly regressive, hitting poor homeowners and renters the hardest at a time when many are struggling. Further, it goes against our self-described image as a water mecca. At a time when we’re attempting to promote our water resources, privatization of “our greatest asset” would strike a really odd note.
Before we self-sort on this issue based on political ideology, we need to realize that there is a downside to privatization. As the study on water privatization moves forward we need verification that what we’re potentially being sold is legit. If not, we’re going to have more dire problems than a few busted parking meters.