Everything You Need To Know About Privatization In One Small StoryPosted: January 14, 2012
State governments have taken a number of different steps to balance their books in recent years. Texas Gov. Rick Perry (remember him?) proposed a new tax on strip clubs, for example, and a Utah state rep. suggested saving $60 million per year by abolishing the 12th grade. But no proposal struck as much metaphorical gold as Arizona’s decision to sell off the state capitol (and a whole bunch of other state properties, such as maximum security prisons) for $735 million in 2009. Republican Gov. Jan Brewer signed off on the deal, and the state now leases the House and Senate chambers from a private real estate company at a considerable long-term cost.
The best part? Arizona sold the building for $81 million dollars and is having to buy it back for $105 million. So, not including the money they spent on leasing the building from the private company they sold the capital to, Arizona’s highly right-wing government just gave $21 million dollars to this company and gained precisely nothing for it. This story is a microcosm for privatization of public services overall: it always costs more money and you don’t get any better service in return for the extra money spent. Oh, and it’s also worth noting that this government’s run by the hard-right wing of the Republican party, y’know, the ones that are supposed to be ‘fiscally responsible’.
Privatization doesn’t save tax payers money whether it’s prisons, schools, or health care for the elderly. A prime example of what the public sector can do is the closure of I-405 in LA in July. The I-405 closure was done by state and municipal authorities and finished under budget and ahead of time. Compare that to the I-540 loop here in North Carolina, where you have several contractors fired over the years and the project so staggeringly over budget that twenty years on from when ground first broke on the project the government is going to have to switch the rest of the expressway to a toll road to pay for finishing it. Of course, they’ve already selected a company to run the toll collection system, because trusting the private sector to do public sector work has gone so well on this project already.
I defy anyone to find a single successful example of privatization of a public service, with success defined as either saved money while maintaining service or improved service while costing the same. If you find a success, let me know in the comments. I’ll be waiting.