|Subject: Wish I was broke like the state|
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Date Posted: 08:24:33 02/24/11 Thu
By Jay Fitzgerald | Thursday, February 24, 2011 | http://www.bostonherald.com | Business & Markets
Photo by Staff graphic
The state government could easily wipe out its budget gap and a large chunk of its long-term pension and building debts — if it’s willing to part with the State House, Zakim Bridge, Mass Pike and other prized assets.
As debate rages across the nation about how governments can reduce their huge deficits, an old idea is being raised again: Sell off publicly owned properties instead of just cutting spending or hiking taxes.
The latest call comes from Harvard financial historian Niall Ferguson, who’s receiving enormous attention lately for suggesting that the U.S. government and individual states could reap tens of billions of dollars by putting assets on the auction block.
Don’t dismiss the idea.
Cash-strapped Arizona last year actually sold off its state Capitol complex, prisons and other properties for more than $1 billion. Arizona’s lawmakers and governor now work out of leased office space.
And Chicago recently unloaded its 30,000 parking meters for $1.2 billion to private investors.
The Herald asked experts how much Massachusetts might reap if it got desperate enough for a budget-saving fire sale:
• The state Lottery — which former Treasurer Tim Cahill once mulled selling — could fetch at least $1 billion, with a guaranteed annual cut of proceeds, experts say.
• The Pike, with tolls already in place, could nab anywhere from $3 billion to $5 billion. Private firms would collect tolls and maintain the east-west highway.
• The Zakim and Tobin bridges could easily fetch hundreds of millions of dollars each, assuming new tolls are implemented on the Zakim and the Tobin kept its current toll system, according to experts.
• The State House could score about $500 million, although some wondered if it’s too old to get top dollar.
“It’s an intriguing idea,” said Ted Oatis, a principal at Chiofaro Co., a Boston developer.
The state already rents space at private buildings, including parts of the Saltonstall complex and the old Teradyne headquarters on Harrison Avenue.
But Oatis and others say the plan wouldn’t work if the state just used sale proceeds for the one-time plugging of deficits. The selloff would have to be accompanied with disciplined balanced budgets.
In the 1990s, former Gov. William Weld proposed the privatization of state parks, prisons, roads and even some fee-generating court services — but Democratic opponents largely slammed the door on the idea via the 1993 Pacheco Law, which strictly limits privatization of government services.
The author of that law, Sen. Marc Pacheco (D-Tauton) doesn’t sound like he’s any more willing today to allow a massive asset sale.
“I’m not against privatization per se,” he said. “It’s what it costs taxpayers at the end of the day.”
Article URL: http://www.bostonherald.com/business/general/view.bg?articleid=1318991
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