Sunday, October 18, 2015

Public-private partnerships take "toll" on public

Remember Mayor Mallory's Parking Plot?  And proposed tolls for the Brent Spence Bridge?  These are all new-fangled financing schemes where the cash flow emanating from the use of public improvements is vested in private entities, who then float bonds payable with those revenue streams in exchange for an up-front public benefit today.

In the case of tolls, they are used to build roadway, bridge and tunnel projects that the public entities cannot afford, and in the case of parking revenues, they are being used to front millions in current dollars for capital projects.

Today's Washington Post highlights these public-private partnerships running off the rails and costing taxpayers dearly.  

Stepping back, why is one of the wealthiest nations on earth unable to fund its infrastructure without selling its income streams to for-profit entities?  Simply, because it can't control its spending.  At the federal level, entitlement spending -- medicaid, medicaid, ObamaCare and social security -- is gobbling so much of the federal budget, the government can't afford comparatively small amounts for crucial public improvements.  At the state level, the inability to say "no" to public employee unions -- salaries and pensions -- has bankrupted local and state governments, again preventing relatively paltry sums from being available for capital projects.

So, the "public benefit" to public-private partnerships is largely illusory.  Proceed with extreme caution.

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