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The city’s immediate budget problems may be lessened, if not wiped out, by the deal to privatize Midway Airport that the Daley administration announced Tuesday. It will almost certainly win approval from the City Council—the quick dividends will be too much to pass up in this tumultuous economic climate, and aldermen won’t have much expertise except the administration’s to use for evaluating the deal.
Of course, it’s hardly free money. As in other deals that hand long-time (as in 99-year) control of public assets to private businesses, the city will lose out in the likely event that the airport increases in value and generates more revenues in the decades ahead.
And the budget problems aren’t going away—at all levels of government, they’re likely to get worse over the next couple of years. There is a solution that might make more financial sense, but it’s arguably not right, and it certainly isn’t politically viable: outsource the labor and operations of the government rather than relinquishing control of its physical assets.
Salaries, benefits, and pension obligations make up the biggest piece of the budget pie, by far; more than 80 percent of the city’s corporate fund, its primary pot of money, goes toward salaries and wages. Contracting with private companies for labor might save taxpayers some money, but competition for the deals (assuming competition would determine them as opposed to, say, nepotism or backroom handshakes) would drive down wages and benefits for those workers—it's happened before—as well as people doing comparable work in the fully private sector.
Sorry to be Mr. Doomsday, but even before Wall Street started tanking, public-sector budgets were a ticking time bomb, and now our elected officials have even tougher choices to make. I hope voters are paying attention, because as we know the political process typically rewards people who make the shrewdest short-term moves while leaving the messy stuff for later.