Wait, Projections Fell Short?

Get outta here! A government entity overprojected revenues? Underestimated the gloriousness of its new ways? That never happens! From the Indy Star:

The first year of Indianapolis' 50-year parking meter lease brought doubled rates in some areas as a tradeoff for a wholesale upgrade of equipment and the convenience of paying by credit card or smartphone.

Was it worth it?

New financial data provided by the city shows its share of revenue from the vendor in 2011 -- nearly $1.4 million, or 30 percent -- fell well short of the city's own projection of $2.1 million.

And the city didn't end up seeing the full amount: After the vendor subtracted $286,000 in charges to compensate for the city closing metered spaces, often for RebuildIndy road construction work, the city pocketed $1.1 million.

The vendor, ParkIndy -- a trio of local and national companies led by Dallas-based ACS, a Xerox company -- kept more than $3.5 million.

But most of the city's share was profit, and Mayor Greg Ballard, whose office hatched the deal before it was signed in late 2010, touts the privatized system as a success story that will only get stronger.

Ok, I was kidding. Inflating the projections is what always happens. It sells the thing. After the reality sets in, you can't undo it, because a contract is in place. The future is always painted as a rosier picture.

I was pleased with the reporting on the opposition.

Democrats weren't the only skeptics of the city's deal with ParkIndy.

Some privatization experts questioned the 50-year length, prompting the addition of an opt-out clause for the city every 10 years. But that option comes with a fee, starting at nearly $20 million and decreasing over time.

Mahern was among vocal critics who noted many large cities have modernized their meters by borrowing or striking shorter-term contracts.

"We should have just worked with a vendor to provide us the service for a fee," he said, "rather than granting somebody an equity stake for what is a basic service."

Just like the toll road, this deal was way too long. Both should have been for 5-10 years, tops. It's too hard to predict the financial picture 10 years down the road, let alone 50. 2061 is a long time to wait to learn if the city sold out cheap. But, eager to get money into the city coffers because revenues are down and spending is sacrosanct, and probably to be seen at least a little like Mitch Daniels, Mayor Ballard got this rushed along.

I'm a huge fan of privatization of services, but deals like this smack of desperation and haste, and tend to give needless fuel to the critics of privatization who would dismiss the practice out of hand.

Reason Saves Cleveland, Part 3 - Privatization

One of the mistakes Cleveland makes is to do a great many things that private industry could, and shoud, do. For example, Cleveland's city employees collect the trash from residences within the corporate limits. If I wanted a private company to do that, I couldn't. It was forbidden by municipal ordinance. Here in Fishers, we have four different companies competing to collect trash, and none of the things I was told would happen in Cleveland have come to pass. My streets are not strewn with trash. I do not have an endless parade of trucks creating traffic, noise, and smell nuisances. We do not have people stocking trash in the backyard in order to avoid to bill. I get a bill for $70 every three months. My property taxes are about a half of what they would be for comparable property in Cleveland. To save $2,000/year as opposed to pay $280? I'll do that trade all day long, every day of the year.

Reason suggests that Cleveland should inspect its services while applying the 'Yellow Pages Test'. That is, if there are commercial enterprises offering services provided by the City, the City should privatize. The gain would be a decrease in the public payroll and legacy costs into the future.



It is no surprise to me that Reason identified trash collection among 10 things Cleveland should privatize.

US Senate Discovers Privatization

(Fishers, IN)- Read this quote, and see if you can guess who it comes from, courtesy the Washington Post:

"Candidly, I don't think the taxpayers should be subsidizing something that doesn't need to be. There are parts of government that can be run like a business and should be run like businesses."

Who is this channelling Milton Friedman? I would be stumped, too. I can't think of any Senator, Republican or Democrat, who would be saying such things these days, true though they are. This quote comes courtesy of a California Democrat- Dianne Feinstein, to be exact. The reason for this unexpected position? It's close to home. The Senate's restaurants are losing loads of taxpayer money:

Year after year, decade upon decade, the U.S. Senate's network of restaurants has lost staggering amounts of money -- more than $18 million since 1993, according to one report, and an estimated $2 million this year alone, according to another.

The financial condition of the world's most exclusive dining hall and its affiliated Capitol Hill restaurants, cafeterias and coffee shops has become so dire that, without a $250,000 subsidy from taxpayers, the Senate won't make payroll next month.

In my opinion, the federal government shouldn't be operating any restaurants on the Hill. You want lunch? There are plenty of restaurants in DC, and many of those will give you the separation from the riff-raff, er, American people, that you crave.

It will be interesting to see if this sudden seeing-the-light will translate into the rest of the country. What a positive development that would be.

Indiana- Home Of Crony Capitalism

I absolutely hate it when a critic makes the mistake of seeing a government created monopoly business situation that creates problems, and assailing it broadly as a failure of capitalism.

I expect such criticism to begin to mount in the wake of the Indiana prison riot in New Castle. From the Indy Star report:

State officials will temporarily halt the transfer of Arizona prisoners to the New Castle Correctional Facility after a riot Tuesday that prompted calls for an end to housing another state's inmates in Indiana.

Department of Correction officials said nine people -- two prison employees and seven inmates -- suffered minor injuries in separate disturbances involving Arizona and Indiana prisoners during a two-hour period Tuesday afternoon at the facility 50 miles east of Indianapolis.

The other day, it was the "In God We Trust" license plates. Today it's this 'imported inmates' deal. What do both have in common? True conservatives should be opposed to both.

True conservatives should be opposed to special interest group-driven license plates on the basis that government has no business being a clearing house for private organizations, or for promoting mottos or images. Instead, Republicans seek balance- some plates they can call their own.

True conservatives should be opposed to selling off excess prison capacity on the basis that government should only have marginal excess prison capacity to begin with, and that state government has a limited proper role in protecting its' citizens from dangerous criminals. Instead, Republicans seek to turn the state into a business, making a profit on the excess prison capacity that should not be, taking in prisoners that are not the proper responsibility of the state of Indiana.

Indeed, Indiana government turned its responsibility on its' head. While by housing Indiana prisoners it is supposed to be protecting the law-abiding citizenry, it imported Arizona prisoners and thereby threatened the safety of the law-abiding Indiana citizenry.

This is without even considering the social implications of bringing two distinct prison populations together. Also from the Star:

"The idea of bringing in people from another state who bring along their gangs, allegiances and different alliances immediately was a mixture that was bound to bring trouble," said House Speaker B. Patrick Bauer, D-South Bend.

This is something that should have been anticipated by the State. It's obvious. Was it even considered? It isn't just culture clashes between populations that should have been considered, but also between procedures. Another quote:

Commissioner J. David Donahue said the Arizona prisoners may have been upset
because Indiana prisons have different rules, including a ban on smoking and
limits on personal items inmates can have in their cells.

What causes riots? When a prisoner has so little, they hang on to the few things they have. If they had cigarettes in Arizona and lost them in coming to Indiana, anyone with a shred of common sense had to know the inmates would be unhappy. All these differences should have been scouted in advance. It appears they were not.

So, capitalism is likely to take the hits, when it doesn't deserve it. Let's be clear on terms:

Capitalism is business that exists in the private sector, and outside of monopoly settings. This privatization deal is not capitalism. There is no competition in Indiana for private operation of prisons. This prison is the only one that is privately managed. That's crony capitalism. I detest crony capitalism.

Privatization is allowing a private operator to manage a function previously managed by government. This prison is no longer managed by government, being managed by a private corporation, GEO Group.

The importation of prisoners into this prison was not the brainchild of GEO Group, however. This was a Daniels Administration initiative. GEO had to deal with the situation.

Both Daniels and GEO have failed here, but I hold Daniels as most accountable. The importation never should have happened, as outlined above. If it hadn't, the riots most likely wouldn't have happened.

Today's Republicans will accept anything the people wearing the Elephant Brand promote. Expanding the state government's role in prison management? What principled conservative could possibly be in favor? Ah. There's just an absense of principled Republicans.

So, Republicans. Don't wince to sternly when capitalism gets beaten up because of this. You helped make it so.