Chicago Privatization Blitz Draws Critics Chicago is privatizing its 36,000 parking meters and getting more than a billion dollars in return. It is the latest in a handful of public assets that the city is leasing to private operators, leading some to wonder whether it sells future generations of taxpayers short.

Chicago Privatization Blitz Draws Critics

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ROBERT SIEGEL, host:

If you park on the streets of Chicago, you'll soon be feeding the meter a lot more money. Last week, the City Council approved a deal to lease Chicago's 36,000 parking meters to a private company for the next 75 years, and rates are going up. In return, Chicago got $1.1 billion upfront to plug a hole in its budget. NPR's David Schaper reports.

DAVID SCHAPER: Chicago is already notoriously aggressive in its enforcement of parking laws.

Ms. CINDY BRAHM(ph) (Consultant): If the sign says you get ticketed after six o'clock, at six o'clock and one second, you have a ticket. They're out in force.

SCHAPER: Cindy Brahm works for a small consulting firm along busy Lincoln Avenue on Chicago's North Side. The block has a family-owned pharmacy, a thrift store, dry cleaner, bakery, takeout food joints. Twenty-five cent meters allow people to park on the street and run in for 15 minutes here or half an hour there. But Brahm says she already avoids the metered spots and drives a few blocks away to park on side streets.

Ms. BRAHM: There are some people who I work with who don't like to drive around and find a parking spot, so they park on the street and feed the meter. And it's like, oh, you know, I need to feed the meter in 15 minutes. Sixteen minutes later, they've got a ticket.

SCHAPER: Now a private company is taking over the city's parking meters for the next 75 years. Rates will go up, quadrupling in neighborhoods like this next month to a dollar an hour and to over six dollars an hour in a few years for meters downtown. And meters will have to be fed 24/7. But Chicago Mayor Richard Daley says the privatization deal has a big upside, giving the city nearly $1.2 billion at just the right time.

Mayor RICHARD DALEY (Democrat, Chicago): The funds for this historic parking meter agreement will strengthen our city finances for the long term, give us the ability to continue investing in people's needs, and most importantly protect our city and taxpayers from a very worsening and difficult economy.

SCHAPER: Daley says the proceeds will help the city plug budget holes for the next several years, and 400 million will go into a long-term reserve fund and another 300 million into a rainy day fund. The parking meter deal comes just a couple of months after the city reached an agreement to privatize Midway Airport for $2.5 billion. That long-term lease, which is awaiting FAA approval, will help close this year's budget deficit. Proceeds will also go into the city's underfunded pensions and will pay for overdue infrastructure needs.

In recent years, the city has privatized other assets, too, including the Skyway, a toll road into Indiana, and parking garages. Some observers praise privatization as a creative way to raise revenue. They argue the private sector can manage those assets more efficiently. But some, like Chicago Alderman Scott Waguespack, question the wisdom of leasing public assets. He worries the city could lose money in the long run.

Mr. SCOTT WAGUESPACK (Democratic Alderman, Chicago): Things look great in the short term. We're going to get a nice infusion of money right off the bat for the next four to five years. But then after that, what really happens? And I think that's very unclear with the package they've put forward today.

SCHAPER: Columbia University Professor Elliott Sclar wrote the book "You Don't Always Get What You Pay For: The Economics of Privatization." He says in the long run consumers often end up paying more and getting less in services when government privatizes public assets. And it doesn't fix chronic budget problems.

Dr. ELLIOTT SCLAR (Professor of Urban Planning and International Affairs, Columbia University): At some point, you're going to run out of things to sell. And it's not a long-term solution. It'll get you through the next election cycle, and that's all it does.

SCHAPER: Nonetheless, cities from New Orleans to Milwaukee are looking at following Chicago's lead by privatizing airports. Massachusetts may privatize a turnpike. And as the economy worsens, other governments across the country will be looking at what assets they might be able to lease to private companies for a big infusion of much needed cash. David Schaper, NPR News, Chicago.

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