Donald Cohen: Keep infrastructure in the public’s hands

The private sector is great at producing things like loaves of bread and laptop computers. But when it comes to public goods like infrastructure — roads, water systems and bridges — a business’s profit motive cuts against the public interest.

U.S. President Joe Biden signs the Infrastructure Investment and Jobs Act as he is surrounded by lawmakers and members of his Cabinet during a ceremony on the South Lawn at the White House on Monday, Nov. 15, 2021 in Washington, D.C. The $1.2 trillion package will provide money for public infrastructure projects, including improvements to the country’s transportation networks, increasing rural broadband access, and projects to modernizing water and energy systems. Contributed / Alex Wong/Getty Images/TNS
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The recently passed $1.2 trillion bipartisan infrastructure bill will provide desperately needed federal dollars to fix our roads, water systems and other public infrastructure. But the bill is not all sunshine and rainbows.

A provision in the bill incentivizes state and local governments to hand control over some of the new projects to corporations and private investors. And that will create opportunities for bad things to happen.

Much of the new federal spending will go to fill potholes, repair bridges, lower the cost of high-speed internet, and build other things our communities need. But for large, federally supported transportation projects, state and local governments will be required to consider additional funding from private investors.

The danger is that this additional funding comes with strings attached. The private investors negotiate contracts — called “public-private partnerships” — that allow them to profit from raising water rates or hiking tolls on highways, or from charging the government expensive lease payments.

These contracts are not only more expensive than if the state or locality used traditional public financing, but they also often empower private investors to shape public policy.


The city of Chicago, for instance, signed a public-private partnership in 2008 to lease its downtown parking meters to a group of investors including Morgan Stanley and a Middle Eastern sovereign wealth fund. Today, with 62 years to go on the 75-year lease, the investors have already made a 143% return on their investment. That profit could be going to investing in Chicago’s public schools or improving public safety, but instead it’s leaving the city. Not only that, the city has to pay the investors if they make changes that lower parking revenue, like holding a street fair or adding bike lanes or dedicated bus lanes.

In Maryland, Gov. Larry Hogan is proposing a public-private partnership to build new toll lanes in the suburbs outside of Washington, D.C. To make the project profitable for investors, the toll for a rush-hour, one-way, 12-mile trip could cost $50 or more.

These numbers are jaw-dropping, but not surprising. Private corporations are accountable to their investors and shareholders. They aim to turn a profit, and sometimes that gets in the way of the mission that our public institutions exist to serve.

The private sector is great at producing things like loaves of bread and laptop computers. But when it comes to public goods like infrastructure — roads, water systems and bridges — a business’s profit motive cuts against the public interest.

As I write in “The Privatization of Everything,” a new book that I co-authored with Allen Mikaelian, public goods are the things we can all use together, things with no winners or losers. From public schools to clean water and COVID-19 vaccines, public goods are supposed to benefit everyone.

And they’re as American as apple pie. We realized long ago that everyone benefits from public education — even if they don’t have school-age children. We also figured out that a public fire department available to everyone, it turns out, keeps everyone safe. We could’ve made all our roads into toll roads, but we decided that it would be better for both the economy and each of us individually if the public controlled most roads.

That’s why we can’t let our state and local leaders sign expensive public-private partnerships that give away control over our roads, bridges and other infrastructure. Our country sorely needs rebuilding. We can’t afford to mess this up.

Donald Cohen is the executive director of In the Public Interest and the author of The Privatization of Everything. This column was produced for The Progressive magazine and distributed by Tribune News Service.


©2021 Tribune Content Agency, LLC.

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