Is Your State For Sale?

It’s no secret that state budgets across the United States are ‘in crisis’. The tumbling tax revenues resulting from a combination of high unemployment rates and tax cuts for corporations and wealthy individuals, coupled with the expiration of federal stimulus funds, has left states in the unenviable position of closing significant budget gaps.

In fits of ignorance rage, voters in several states have tasked Republicans with the arduous task of filling their budget holes. Across the country, right-wing governors and GOP-led legislatures are looking for private sector solutions to public sector problems, and looking to operate the government in a more business-like fashion.

Like any good business, the answer? Fire sale, motherfucker! Eliminate those long term revenue streams in exchange for a lump sum payment up front, increased cost of services to your citizens, and a likelihood of decreased wages for the workers providing those services. In the case of selling an asset, like Ohio governor John Kasich plans to do with its prisons or Scott Walker’s plan to pay back Koch Industries with no-bid power plant sales, that asset is GONE. Off the balance sheet. No longer an asset to the state.

The money up front, of course, is nice. Lump sums help close holes in 1 and 2-year budgets. However, two years from now, when a new budget is due to the state, and these governors are still in charge (barring a recall, which, sadly, in Ohio, doesn’t exist), similar gaps will need filled again. What to sell then? Roads? Parks? The Lottery?

Well, in Ohio, those things are slated to be leased out to private companies. The parks for natural gas drilling, the turnpike to get the maintenance costs off the state’s back, and the lottery? Well, there’s just a lot of money to be made that could be much better utilized by someone who’s already rich than the schools it was originally intended to support. If you’re already leasing out a car, you can’t exactly turn around and sell it to someone else. So, close that door.

Nope, you’ll either have to raise taxes on folks who can afford it (HA!), or cut more services. Schools in the Midwest don’t need heat, do they? If we cram 60 kids into a classroom meant for 30, the body heat alone should be enough, right? I’m not a scientist, but that sounds right.

Admittedly, I haven’t seen some of the numbers associated with these efforts yet. Like any good used car salesman, the politicians associated with these actions like to wait until the last minute to disclose the details of the sale.

However, I’m having trouble with the math on some of these things. In the case of the turnpike, it’s likely that the company that leases it from the state will lay-off and reduce the wages of toll and maintenance workers, raise tolls (see Indiana), and possibly scrimp on certain aspects of maintenance/safety. Wait, that never happens, right?

So, what you likely have: Reductions in tax revenue from workers, a further erosion of the middle class way of life, an increase in real costs to the citizens and businesses that use those resources, and a share of revenue that could go directly to state coffers redirected as profit to a private firm (whose taxes your state probably just cut, helping to exacerbate said budget deficit).

But, those are only leases right? If they don’t work out, the state can always just take back control and operation of the asset.

Sure, except, your state has now disbanded the departments, cut those costs from the budget, and would have to re-create the infrastructure needed to resume operation of the asset in question. That costs money. Real money. Who’s going to pay for that?

Not guys like Kasich, Walker, or their friends and supporters. Believe that.

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