"States consider selling off roads, parks to close gaps" by Martiga Lohn, Associated Press | December 28, 2008
ST. PAUL, Minn. - Minnesota is deep in the hole financially, but the state still owns a premier golf resort, a sprawling amateur sports complex, a big airport, a major zoo, and land holdings the size of the Central American country of Belize.
Valuables like these are in for a closer look as 44 states cope with deficits. Like families pawning the silver to get through a tight spot, states such as Minnesota, New York, Massachusetts, and Illinois are thinking of selling or leasing toll roads, parks, lotteries, and other assets to raise desperately needed cash....
Ummm, NOT a GOOD IDEA!!!!
The state would sell equipment and assets to banks so the banks could lease it back to them at interest. How does that serve the public good?
"In the 1990s, the T and other transit agencies were encouraged by federal officials to sell their train equipment to banks and then lease it back. The arrangement brought the T $53 million in upfront payments. In return, the private banks realized a tax benefit"
NOT a GOOD IDEA at all!!! Thanks, Bill Clinton!
Related: Banks Bend U.S. Cities Over
Massachusetts' Fate Rests in Banks' Hands
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Such projects could be attractive to private investors and public pension funds looking for safe places to put their money in this scary economy, said Leonard Gilroy, a privatization expert with the market-oriented Reason Foundation in Los Angeles.
"Infrastructure is more attractive today than ever," Gilroy said. "It's tangible. It's a road. It's water. It's an airport. It's something that is - you know, you hear the term 'recession proof.' "
Unions don't like privatization deals out of fear that worker wages and benefits will be squeezed as private operators try to boost their profit by streamlining services. Selling or leasing public assets can produce an immediate infusion of cash for the state, while foisting the tough decisions, such as raising tolls, onto private operators instead of the politicians.
Yeah, and leave us PAYING MORE and AT THE MERCY of BANKS!!
"The authority was attempting to renegotiate terms of a complex financial deal with the banking giant UBS. Known as a swaption, the arrangement could force the authority to pay out a $450 million lump sum"
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Yeah, it's a BAD DEAL, folks!
