Tuesday, September 29, 2009

"Privatization" of Chicago's parking attracts lawsuit

Something that has greatly interested me in recent months is the mismanagement of the "privatize it" talking point. That if the government lets private companies handle government functions, "market values" will be applied rather than government values, and implying that it'll be a better deal. Since the private company has the motivation of making a profit, they have an incentive of keeping costs low.

That usually doesn't happen.

Chicago recently privatized their public parking, giving a 75 year contract, and later showed that the city undersold by about $1 billion. Surprise surprise, the rates went up. Also, humoursly, the higher rates caused meters to fill up quite fast, making it impossible to pay for a spot.

Now, the city is being sued. Apparently, Chicago police are still writing tickets for fining vehicles at expired meters. The Independent Voters of Illinois-Independent Precinct Organization claim that police funded by tax dollars have no authority to enforce something operated by a private company and thus don't have to pay. Failure to pay the fine can cause the Secretary of State to revoke your license, which again they contest the secretary doesn't have the authority to do because it's done at a private meter.

So not only does this privatization result in higher rates for citizens and visitors, but public resources are STILL being used.

Now, one may ask why those in Indianapolis should be concerned about this. Because our city is thinking of doing the same. Rates were quoted to be going to $1.75, and possibly extending the time the meters run. The idea of meters that use credit cards or charge-by-phone was also floated in the Indianapolis Business Journal and Indianapolis Star articles on the subject.

Now, let's review recent privatization efforts, or "public-private partnerships" as the governments likes to call them:

IBM running FSSA has resulted in FSSA being run WORSE than it already was. They recently got over $1billion extra to fix the basics that they screwed up. And as previously reported, Daniels is never going to cancel the deal.

The Indiana Toll Road quickly raised rates after being privatized.

Indianapolis' residents might be seeing another increase after a recently approved 11% increase for their privately run water company.

Almost all of these have 10 years or longer in their contracts, and anyone who has ever taken a high school econ course knows that the economy can change quickly in much less time in 10 years. While citizens have some control over government agencies via their elected legislative representatives, they have little recourse if a private company screws up the work of the government. And it gets even worse when it's a government function that handles the work associated with the poor, sick, or imprisoned, because it's much more likely to be swept under the rug.

I think Indiana Republicans and Democrats need to learn what privatization actually is. Giving someone a decade+long contract with little chance of being fined/cancelled is a government deemed monopoly, not privatization

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