Understanding Government

Midway airport

Not if a bill proposed by Democratic Illinois Sen. Dick Durbin becomes law, reports Paul Merrion of Crain’s Chicago Business. The legislation, “would make make privatization of Midway Airport and other major transportation assets such as Amtrak far more difficult, if not impossible, by requiring the federal government to be reimbursed for its investment in that infrastructure before a deal could go through.” The legislation appears to be the nail in the coffin for a plan to privatize Midway. But Durbin’s bill could signal a broader push back against the privatization of what are essentially public utilities.

The plan to privatize Midway started back in 1996 when the Federal Aviation Administration started a privatization pilot program (pun, presumably, unintended) to let private companies manage, lease and develop public airports. Midway — which is served by seven airline carriers — was the first major transportation hub to submit a privatization plan. Then-Chicago Mayor Richard Daley seemed to have concocted a deal, in 2006, where private investors would lease the airport for 99 years in return for $2.5 billion. But investors pulled out in 2009 after the credit markets froze.

The FAA’s authorization to let Midway privatize expires in July 31 — and now-Chicago Mayor Rahm Emanuel is against privatization. Emanuel and the Chicago City Council would probably be even more against the deal if Durbin’s bill becomes law: Chicago would then have to repay FAA the $375 million total the federal government invested in the airport.

Why would Durbin and Emanuel be against privatization? One reason might be that Daley’s leasing of the city’s parking meters to private investors in 2008 was notoriously costly and irresponsible. Whether its airports, parking meters, trains, or even water, privatization provides government quick cash through leasing deals. But, in the process, government can lose long-term revenue.

And government can also lose control over basic services inherent to a functional city. Chicago’s government ceding control of transportation needs raises the question — from both friends and foes of government — of what’s next: The greater privatization of schools? Having the free market determine who will shovel the city out of a blizzard?