Tuesday, August 9, 2011

Every Time Privatization of Los Angeles City Services is Mentioned, Antonio Villaraigosa Dies a Little Inside

To those of us who think logically, privatizing city services in cash-strapped burghs like Los Angeles would seem to make a lot of sense. After all, LA's finances are extremely shaky (lest we forget, Moody's subjected the City of Angels to a debt downgrade not even a month ago), and privatization offers a path toward cutting spending without reducing service offerings. Yet, as the Torrance Daily Breeze reminds us, even things that make sense can sometimes face serious obstacles.

Three years ago, a plan emerged to lease city-owned parking garages to private operators, with a large up-front cash payment as part of the deal. This seemingly straightforward proposal quickly ran aground on political considerations: the City Council wanted restrictions on parking rates, numbers of reserved spaces, and enough other things that no private firms wanted to participate. In spite of this, however, Los Angeles is once again debating the privatization of a wide range of services, including libraries, the zoo, the Convention Center, parks, and animal shelters. The Council's Budget and Finance chairman, Bernard Parks, sizing up these ideas, offered this amusing description of government at work: "My experience has been that anything which should be a money-making operation does not do well under the city. We are better off having it done privately." Even Los Angeles mayor and former union thug Antonio Villaraigosa is sounding cautiously receptive to the idea of partnering with private companies for the delivery of some services. According to his spokeswoman: "The mayor believes public-private partnerships should be explored when and where they make sense to preserve or enhance services. But we need to look carefully at each issue on a case-by-case basis."

Still, if you're hoping for privatization to offer new job possibilities in a county where unemployment is over 12%, as well as sales-tax relief, you probably shouldn't get too excited. The Breeze article suggests that the sharks are already circling around these proposals. Councilman Richard Alarcon is vehemently opposed to any privatization: "We have made major investments in facilities ... and I don't see how it is different from what our employees are able to do." Of the animal-shelter plan, Alarcon said, "What concerns me is we are making a massive investment with our animal shelters, and we are just turning them over to somebody who gets a building with free rent and will be providing less in the way of services." The director of the LA-based Center for Governmental Studies, Bob Stern, makes Murray Rothbard turn over in his grave with his concerns: "Privatizing also means you could lose the ability to regulate these agencies. I am very concerned when it comes to privatizing some of the big things the city does. Could this lead to privatizing the police or fire services? It's a debate over what tax dollars should be used for." For his part, City Administrator Miguel Santana has already let it be known that layoffs will not be part of any public-private partnership, and for his troubles the Coalition of City Unions is accusing him of pursuing a Costa-Mesa-esque political agenda to "outsource city services to lower wages and eliminate health care and retirement benefits."

We'll go out on a limb and predict that, if any private organizations are brought in to contract with the city, they'll operate under so many restrictions that no savings will actually materialize.

For more on why LA is the way it is these days, check out this excellent Mises Daily piece from Doug French.


  1. Hugh AkstonAug 9, 2011 11:51 AM
    I'm a little surprised that the Councilmembers don't understand that 'privatization', when done correctly, is just a fig leaf for handing out lucrative contracts to political cronies.
  2. GSLAug 9, 2011 01:53 PM
    Especially in Los Angeles. Haven't they paid attention to their own RDA?