Sen. Dick Durbin has proposed legislation which would make it difficult for over-budgeted states and cities to lease public transportation assets to private investors.
"I’m not going to rule out privatization as a possibility, but let’s do it with our eyes open," said Durbin. "Let’s ask some hard questions about whether the public interest will be protected. Let’s find out what happens to the workers if there’s privatization, and their pensions, and the promises we made to them."
The proposal would require the federal government to be reimbursed for its investment in a piece of infrastructure before any deal could be made. Additionally, it promotes transparency, requiring the disclosure of any depreciation or other tax benefits that would accrue to private investors and estimates of savings from the reduction of jobs, pay, or benefits.
The bill comes largely in response to the discussions of selling Midway Airport and Amtrak's Northeast Corridor, its most profitable route.
Durbin's new bill echoes Mayor Rahm Emanuel's resolve to impede the sale of Midway Airport. Durbin sees this trend of privatization (Chicago privatized parking meters back in 2008 for a 75-year period) as a short-term solution to the state's budget problems.
Plans were discussed in 2009 to lease Midway for 99 years to private investors for $2.5 billion, but the deal was placed on hold when creditors had their hands tied with the credit market freeze. The city's authorization from the Federal Aviation Administration for the sale of Midway expires July 31 and plans for a deal are not currently being mobilized, according to Durbin.
Amtrak's privatization has recieved recent attention, however, after House Transportation Committee Chairman John Mica (R-Fla.) proposed that the trains would operate more smoothly between Washington and Boston if a deal were to be made earlier this week. The bill is expected to receive opposition not only from Republican privatization supporters but also from the banks who finance the deals.
The measure would only apply to existing transportation assets are not meant to affect new privatization proposals such as the Illiana Expressway or the Elgin-O'Hare Bypass.
