Silver Lining in States’ Fiscal Crisis
October 7 2008 by Chief Executive
WE ARE CHEERED BY NEWS that some states plan to start privatizing more of their infrastructure. In an ironic recent broadcast, New York Governor David Paterson, facing ballooning deficits estimated to be as much as a staggering $26.5 billion over the next three years, lamented that there may be no alternative but to sell off roads, bridges and other infrastructure. New York tabloid headlines read “NY for Sale.” Additionally, investor groups from around the world have started to line up to put their money into what may be “the largest new asset class in years.” This expected trend recently led one investor to say, “Ten to 20 years from now infrastructure could be larger than real estate.” The implications are enormous.We have long advocated reductions in state spending and involvement in commerce. New York, for example, has for too long overtaxed and overregulated its economy. Our own CEO polling has confirmed this by ranking the state as one of the worst for business during the past four years. It is now faced with less population and fewer businesses choosing to grow there. This has led to a bigger tax burden on the remaining population. The system is now going broke. What better way to discipline such states than to force them to sell off assets and pass them into more efficient hands? As more states look at and adopt this option, we may hope to see shrinking government influence over society’s important infrastructure assets. That is good news for its overtaxed and underserved citizens.