Reason Foundation

Reason Foundation

Reason Alert: Annual Privatization Report

July 26, 2007

Reason Foundation's 21st Annual Privatization Report
Reason's 21st Annual Privatization Report finds states are increasingly partnering with the private sector to build roads and reduce the traffic jams that have become one of the biggest complaints among taxpayers living in nearly every mid- to large-sized city in the country. The report analyzes the latest developments in privatization and government reform in the areas of transportation, aviation, education, local government services, telecommunications, and eminent domain. The Annual Privatization Report finds the most important trend of the last year is the rising tide of long-term toll road leases. Over 21 states have now passed laws enabling public-private partnerships that can be utilized to build much-needed roads and reduce gridlock. The report also finds it was a historic year for airport privatization. Globally, 15 major airports were privatized in 2006, the second-highest annual total ever (there were 21 airport privatization deals in 1998).

Improving New York's Congestion Pricing Plan
Mayor Michael Bloomberg and New York City are still trying to figure out how to develop and implement a congestion pricing plan that would charge a fee to drivers entering Manhattan. Reason Foundation's Robert Poole says, to be successful, any NYC congestion pricing plan must do two things - make sure the suburbs get something out of the deal and charge tolls that are high enough to guarantee less gridlock. In a column for Newsday, Poole writes, "Nearly half (47 percent) of all commuters who drive into Manhattan come from suburbs. With the mayor's plan devoting all the net revenue to improving mass transit within the city, for most suburban commuters the new charge would be all pain and no gain. (Few of those who drive to jobs in Manhattan use mass transit while there.)...For Manhattan, a wiser plan would use pricing - and the revenue it generates - to benefit both city and suburban commuters. The first step is to figure out what pricing level would produce a 20 percent to 25 percent reduction in congestion, so that in exchange for all the trouble and cost, Manhattan gets real relief. My guess is that this would be a toll of about double what the mayor proposed. Because it costs the same to implement the system regardless of the toll amount, net revenue will be far more than twice as much. Another key change, taking a page from Stockholm, is to devote a major share of that larger revenue to highway projects that offer congestion relief in the other boroughs, which would also benefit commuters from outside the city who have to go through those boroughs to get to town."

Vick Case About Gambling Too
Reason magazine's Jeff Taylor says the dog fighting allegations against Michael Vick are getting all of the coverage, but the NBA isn't the only sports league with a gambling story brewing. Taylor writes, "Vick, if government claims are true, has by-passed gambling debts and mobbed-up bookies to go straight to running his own illegal gambling operation. Violence, gunplay, and secretive cash deals being part-and-parcel of the scene. To read the indictment, you would have no idea Vick signed a 10-year, $130-million contract a couple years ago. Government witnesses place him at dogfights in Virginia and the Carolinas hustling for $3,000 here, $13,000 there...The charges against Vick, at a minimum, remind us that we really don't know our sports heroes as well as we like to think. As the case moves forward, we come to find out that we do not know them at all."

U.S. Businesses Accept Pesos
"Two hundred twenty-two years and two weeks ago today, the United States made the peso its official currency. Nonetheless, many Americans (read: Fox News) went nuts last week when Value Giant announced that it would start accepting pesos in all of its stores on Saturday, July 14, fearing an increase in peso-spending illegal immigrants to the United States. Of course, the U.S. dollars that we know and love today were issued in 1792, but the peso continued to be recognized as the official currency of North American trade until 1857 in the United States, and until 1858 in Canada. We have a long, proud history of doing business in pesos. Our currency, along with the Straits dollar, the Hong Kong dollar, the Japanese yen, and the Chinese yuan, is modeled on the peso. We have the handy peso to thank for much of our early economic development as a nation...The hand wringing about the possibility that Dallas pizzerias and discount stores accepting pesos will somehow enable or support illegal immigration ignores longstanding policies at Wal-Mart, H-E-B supermarkets, and other American chains in towns along the Mexican border to accept pesos. Businesses near Niagara Falls have cheerfully taken American tourist dollars on the Canadian side for decades." - Reason magazine's Katherine Mangu-Ward on the latest immigration 'outrage.'

Buy Cigarettes for the Kids
Reason magazine's Jacob Sullum, author of For Your Own Good: The Anti-Smoking Crusade and the Tyranny of Public Health, writes, "Politically, making smokers pay for children's health insurance is a great idea: Everybody loves children, and everybody hates smokers. But once you get beyond the popularity contest, it's clear that financing an expansion of the State Children's Health Insurance Program (SCHIP) with a big increase in the federal cigarette tax is neither fair nor wise. As a group, smokers are less affluent than nonsmokers, and a poor person's spending on cigarettes represents a much bigger chunk of his income than a rich person's. These facts combine to make cigarette taxes highly regressive...Some supporters of higher cigarette taxes argue that smokers should bear a disproportionate fiscal burden because they account for a disproportionate share of taxpayer-funded medical expenses. But researchers such as Harvard economist W. Kip Viscusi estimate that, if anything, smoking saves taxpayers money. Because smokers tend to die earlier than nonsmokers, they do not consume as much health care in old age or draw on Social Security as much as nonsmokers do. Leaving aside Social Security savings, a 1997 study in The New England Journal of Medicine concluded that total health care spending would go up, not down, if everyone stopped smoking."

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