The city of Hartford doesn’t like the term privatization. Officials prefer to brand their latest revenue gambit as “securitizing” the city’s parking assets.
But by whatever name, Hartford is following in the footsteps of other troubled governments in mortgaging its future for one-time cash now. Some cities have sold off city halls and leased them back for a quick budget fix. States have played with privatizing the lottery and toll roads.
Sometime it works. Hartford officials are pointing to Chicago’s multi-billion-dollar deals as a success story.
Sometimes it doesn’t. In California, an attempt to privatize the express toll lanes on the Riverside Freeway resulted in such a mess, government had to buy the lanes back.
Now, we’re all for private enterprise. The idea of the city operating parking lots in competition with private operators does strike us as bad policy.
Yet we can’t lose sight of the fact that the parking operation is netting about $5 million for the city. Perhaps a private operator could do better. And that calculation will be factored into whatever bids emerge from this process. On the city side, however, the calculation must balance that loss of revenue long term against the one-time payment.
It’s often prudent to pledge future payments to finance the purchase of a major asset, like a home or a business. The case for the reverse is much trickier. Using one-time money to close an on-going operational hole in a budget is playing with fire. Unless you fix the underlying problem, soon you’ll have neither the asset nor the proceeds of the sale.
There’s also the matter of ceding control of an economic development asset to a third party. Without adequate and affordable parking, a city can choke off commerce and drive both retail sales and jobs to the suburbs. Hartford simply can’t afford to go down that road any further.
Last year, the city cut parking rates in an effort to be more parker-friendly. What if a private operator calculates that optimum profits flow from a higher price? Is the city willing to risk alienating workers and shoppers? And if not, building some real control into the deal will adversely affect price.
And what about enforcement? Will the city still write tickets or will a private operator have to police its own spaces? It could be another saving for the city. Or it could be another headache for all involved.
This is a slippery slope Hartford is walking. Let’s hope city officials follow their own advice and use maximum caution.