In recent years Mayors have been treated to an entirely new lexicon.  Remember “the benefits of privatization?”  School districts started looking for bids and RFP’s to replace their existing custodial and cafeteria staffs.  I don’t know how such initiatives turned out over time, and there were probably some initial savings, but to suggest that under privatization, things were always better and more efficient, has to be a stretch.  While it is true that sometimes the public sector is a smidge less efficient than the private sector, great disparity of cost and productivity could only occur in instances of gross incompetence and dishonesty.  And while we sometimes get carried away with our critical rhetoric, gross incompetence and dishonesty were never the norm, at least not in any school district with which I have any familiarity.   So I guess what I’m saying is: don’t buy into the myths suggested by highly compensated efficiency consultants that privatization of cafeteria workers and custodians always saves money. It doesn’t! 

How about “municipal aggregation,” remember that one?   Get everyone in town to sign up to buy their electricity from a competitive vendor and all will be well, and costs for everyone will go down.  It turned out that municipal aggregation was more snake oil than substance and some of the more gullible among us spent considerable sums on aggregators only to discover later on that there were pitifully few competitive sources for power and the savings to municipal consumers were - at best- temporary, illusory or both. 

“Securitization” was another buzz word that materialized suddenly a few years ago.  It’s actual definition varies depending on how the word is being used.  In New Jersey, it was used as a way in which to guarantee that the “stranded costs” of electric utilities in an increasingly competitive marketplace would not be transferred solely to stock and bond holders but would also be assigned to consumers.   Unfortunately, the competitive marketplace remains only a figment in the minds of some policymakers.

The newest buzz word in New Jersey is “monetization,” and like those previously discussed, it’s simply more of the same snake oil.  “Monetization” supposedly means leasing of an asset instead of selling it outright, and, of course, I’m talking about the proposal currently on the table to lease the New Jersey Turnpike to an international consortium of investors.  Proponents of the “lease” enthusiastically point out that they are not really selling anything because in 50 or 75 years the state gets the Turnpike back.  So here’s a question for you – how exactly does the international consortium of investors get back their initial multiple-billion dollar investment – money that will be used allegedly to properly fund that soon-to-be-broke Pension Trust Fund? 

The answer is painfully easy to determine.  The Turnpike only has three sources of revenue – tolls, service areas, and billboards.  

It is, therefore, a foregone conclusion that in order to maximize their return on investment, citizens of New Jersey can look forward to more of all three.  And because the decision to increase tolls will be coming from other than a political source, the “leasing company,” in this example the State of New Jersey, ends up with plausible deniability.  “We didn’t have any say in the decision,” will be the hue and cry. 

To prove the foregoing one need look no further than the Dulles Toll Road which runs between the Washington Beltway and Leesburg, Virginia.  It’s a private toll road, wildly popular with the commuting public, and about to witness a doubling of tolls. 

The new owner/operators of the Turnpike will, no doubt, quickly do the same in order to underwrite the purchase of even more public turnpikes and parkways. 

Monetization of the Turnpike will also be devastating to the unionized state workers currently employed.  There is no way in god’s earth that an international consortium of investors will remain the benevolent employer that the Turnpike is currently going forward.  There has never yet been a case where previously employed government workers were as happy or treated as well under privatization.  The profit-motive inherent in private enterprise cannot afford to be as benevolent as the government, hence Turnpike employees are in for as rough a ride as motorists. 

I was always under the impression that of all the states, New Jersey was the one always looking out for “the working man.”  Drastically higher tolls on the Turnpike and significantly lower wages for its employees hardly seems in keeping with this tradition. 

And if anyone doesn’t believe the foregoing…I’ve got a bridge to sell you.

Beware of unfamiliar words!