No, they aren’t stealing quarters out of the meters – It’s the $1.16 billion Morgan Stanley paid the city to lease the meters for the next 75 years. Read all about it here.
Of that billion, approximately $300 million of the original amount to fill a deep budget hole in the 2009 budget. Of the remainder, $320 million was designated for a “rainy day” fund and $400 million was put into a long term reserve fund. What has happened is that 90% or $1 billion has gone into this year’s budget, and the rainy day fund and the long term reserves are left wanting. Are you surprised?
Although Chicago is known for its rather questionable governmental practices, I can’t imagine that this wouldn’t happen in any city. Give a politician money and they will spend it. Period.
That’s the problem with these long term leases. They look good up front, but after the money has been paid, well….you know. The money is gone and the asset is gone. The city gets nothing for the next 75 years. Seems like the “great deal” for the city of Chicago may not have been such a good one after all. Who is lining up for similar issues – Pittsburgh, Los Angeles, and the list goes on.
This has to do with feeding the beast or starving the beast. If there is money available, government grows. If there is no money, it shrinks. Bureaucrats will do anything to keep feeding the beast – If they can’t raise taxes by law, they will sell off assets like the city hall, fair grounds, and parking lots and meters. Short term gain, long term loss. What are they going to sell when it’s all gone?
JVH
2 Responses
It’s a double edge sword in many cases, either sell it off for the immediate money or let the situation (debt, pension issues, etc) continue to grow worse and end up losing even more later on. For some the only option other than selling assets is bankruptcy, for some the option is for other agencies/entities to sieze control.
I don’t know all the details but from what I’ve read it sounds like what they “planned” to do with the money and what they actually “did” with it are 2 seperate things. If you’re going to sell or long term lease the assets you need to have a solid plan in place and you need to stick to it. You’re right about “feeding the beast”, it seems they took the position of being “given a fish versus being taught to fish”.
Yeah — The problem is that what government, and many businesses, need is housecleaning. There are “legacy” programs that are simply “there.” They have no goals, perform no function, but cost money. The larger the organization, the more there are. Government is a wonderful example. Chicago, California, Los Angeles, and yes, DC, need to have someone like Sam Zell come in and take them back to what they were originally meant to do. But then, I do like a bit of fantasy now and then. JVH