Public-private partnerships — so-called P3s — occur when governments join private companies to do public work or assume a public function. When that happens, the adage “let the buyer beware” is updated: Let the deal-maker beware. Let the public beware too.
P3 deals that look great often turn out badly. Such partnerships appeal to elected officials who need to repair infrastructure but are reluctant to raise taxes.
So they take money up front from private interests and run from responsibility. P3s allow politicians to pose as small-government advocates, though the deals often depend on federal loans — a subsidy by any other name.
Texas State Highway 130 was a private toll road, but toll revenues did not live up to expectations and private investors defaulted on bank loans. The South Bay Expressway in San Diego went bankrupt and was resold. After Chicago turned its parking meters over to a private company, rates increased dramatically.
Yet some P3s do well, and that creates the dilemma. Baltimore upgraded its port to accept larger ships through a 50-year lease to a private investor — an improvement that could not have occurred otherwise in the midst of recession.
States such as Ohio must learn from the mistakes of others. It seems that the more governments lose control of their core duties for long periods, the more trouble they invite. Everybody beware.
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