The Next Budget Drama: Privatization

ALBANY—The budget-related narrative since David Paterson released his draft spending plan earlier this month has been dominated by new taxes and fees, funding cuts, and the prospect of more federal aid.

Selling state assets has flown below the radar. But a commission looking at the subject issued this preliminary report, without too much fanfare and without much coverage, that gives us at least a clue of what’s to come.

Presented dryly as “asset maximization,” as the commission is titled, the report offers ideas ranging from streamlining school construction to placing more tolls on bridges and highways. In each case, it means more private sector involvement in public operations. In the past, it has meant the leasing of state assets to either private entities (like the Chicago Skyway) or, in New York, transfer to a public authority (like the NYS Barge Canal and the Thruway Authority).

E.J. McMahon, director of the right-leaning Empire Center for Policy, said privatization is a potential solution, but it won’t fully work unless outside entities aren’t subject to some of the same labor restrictions they would be currently.

“I don’t think this would meet the March 1 deadline, but this is not just a one-year problem,” he said, referring to the date by which Paterson has said he wants to enact a budget this year. “This is not even a two- or three-year problem, this is a decades-long problem. Our most profitable industry has just shrunk and become half-nationalized.”

And there could be millions of revenue realized in the short term. The Commission on Asset Maximization will release a full report before April 2, the day after the state is required to have a spending plan in place. That requirement has often been ignored.

The Next Budget Drama: Privatization