Fishwrapper - Airport deal would fly
Privatizing Hartsfield-Jackson is key to paying city’s sewer bills
Of course we should privatize Hartsfield-Jackson-Wasteandgraft Airport!
Only a moron, someone who is sucking on the airport’s teat or a scoundrel who will disingenuously push an agenda (can you say Atlanta Journal-Constitution?) would dispute the wisdom of transforming the city’s biggest font of cronyism and corruption into financial relief for taxpayers.
The imminent calamity is well-known. A succession of administrations failed to smell the gazillions of gallons of yecky stuff seeping from Atlanta’s sad sack sewage system. So, with federal guns pointed at the city, Mayor Shirley Franklin has the stinking job of cleaning up the mess. Now.
The cost, according to Franklin, is $3 billion to build a tunnel and then expand and upgrade the system. There’s some question over whether alternative solutions — or ones that, minus fancy tweaks, would appease the feds’ demands — could save a billion or so, but hell, it’s only citizens’ money. Franklin won’t countenance other ideas on fixing the sewers, and with somewhat of a pout, dismisses such suggestions as drivel.
Just as she does with the idea of privatizing the airport. Pooh and double pooh on such blasphemies, sayeth our mayor (whose ex-husband and kids are attached, in the form of airport concessions, to that abovementioned airport teat).
Franklin seems absolutely discombobulated at the ... um, shall we say “unenthusiastic” response to her idea of trebling sewage fees over the next few years. OK, so such staggering increases could force poor families to choose between food and flushing. And, OK, so businesses might cut back employees to afford lavatory facilities. And, OK, other companies might decide to take a hike, saying (with eloquent double entendre), “Who needs this crap?” Despite all that, the mayor just can’t figure out why people aren’t jumping with joy at her plan. (Memo to Mayor Franklin: Folks are just darn tired of paying for waste, mismanagement and corruption at City Hall.)
Meanwhile, the state and federal governments have snubbed Franklin’s request for aid. Rich white guys, such as Falcons owner/Metro Atlanta Chamber Chairman Arthur Blank, are urging the city to pass Franklin’s fee increases. But, then, it’s doubtful Blank and pals have to sweat about paying monthly utility bills. The sewage fee increases punish poor and middle-class residents, and are irrelevant to the wealthy.
A few honest souls — those annoying anti-tax troublemakers and a couple of Republican state legislators — have been trying to get heard, with decidedly little interest from Franklin and with utter disdain from The Daily Voice of the Corporate Establishment.
“All we’re saying is that we should talk about the idea of privatization,” says John Sherman, president of the Fulton County Taxpayers Association. “Let’s get a few bids and see if it makes sense.”
Such radical thinking! Whew!
Keep in mind that the thug calling the shots from behind the curtain is Delta Air Lines, which doesn’t mind at all sticking it to the taxpayers. Neither does the AJC, especially when it’s looking out for its boardroom brethren, such as Delta.
Last week, an AJC editorial lambasted the idea of privatization, telling us that most of the airport’s $230 million in annual revenues already comes from private contracts — implying (falsely) there’s almost nothing left to contract out. (Memo to AJC: It’s the whole airport management we’re talking about, you dummies.) And the newspaper says — without a whiff of proof or without even quoting a pet “authority” — a private operator would have “to raise landing fees and gate rentals dramatically in order to generate any profit.”
That, my friends, is a statement composed of the same stuff that flows through Atlanta’s decrepit sewers. At the very least, the best that can be said is that the AJC is offering pure conjecture as fact. (The paper did provide 400 words of space to a privatization proponent, as if such a meager allocation of op-ed real estate was sufficient to discuss such a complicated subject.)
The ultimate deceit by the AJC, Franklin and other foes of privatization is the implication that something is unique at Hartsfield-Jackson, that somehow other airports don’t have debt, bonds to pay the debt, private concessionaires, and the like. The truth, of course, is that almost all major airports have debts, bonds and private contractors. Atlanta’s airfield is anything but unique, except in its top ranking in passenger travel.
So, what’s happened at other airports? A mere 11 months ago, the Atlanta City Council had a visitor, Katherine Howard, from an Australian outfit called MacQuarie Airports. It’s one of the private operators and, interestingly, it acquired Sydney’s airport and put about $3 billion into the pockets of that city’s citizens. The sale of three other Australian airports raised almost another $3 billion.
What did Howard tell Atlanta’s leaders the privatization of Hartsfield-Jackson would mean for taxpayers? She calculated the city would reap $2.6 billion.
Those numbers sound awfully familiar ... ah, yes, they almost exactly match what Franklin says the sewer job would cost.
Another stunning example: When Britain sold seven airports (including Heathrow and Gatwick) in 1987, the deal produced $2.5 billion for the government. Since then the private operator has invested $5 billion in the facilities, and generated almost $400 million in taxes.
But the city doesn’t have to go to Oz or Jolly Old to find an expert on airport privatization. Just a little ways outside the Perimeter, in Duluth, is the office of Scott Fuller, president of American Airports Corp., which operates nine, mostly smaller airports, including New Orleans Lakefront.
“I don’t think the issue is raising the cost for Delta,” Fuller says. “One thing we do is bring a lot of efficiency, more service at less cost. We’re more responsive to users.”
Efficiency? Responsiveness? Rare words around Atlanta City Hall.
Moreover, a study by the Reason Foundation found that customer satisfaction was measurably higher at privately run airports. Imagine that!
Fuller also has had his calculator out estimating what taxpayers could harvest by privatizing the airport. “Billions of dollars is the correct estimate,” he says.
There is one powerful disincentive to selling airports — the loss of tax-free government bonds. However, the bond problem can be solved if governments retain ownership of airports and merely lease them to operators.
Back to Delta. When Congress began considering test programs for airport privatization, the bully-lobbyists from the airline industry demanded veto power over any deals. So in Atlanta’s case, unless Delta jumps on board, any privatization plan is DOA.
The ultimate solution is for voters to demand that all of those fine capitalists in the federal government end corporate welfare for airlines and remove the carriers’ stranglehold on privatization deals.
More immediately, though, now is a good time to negotiate with Delta. The company just reported more losses — $458 million for the first nine months of the year. That follows a lot of other nine-figure-wide pools of red ink in the last few years.
“I think we should get Delta to sit down and offer them a deal [that], as the Godfather said, they can’t refuse,” says the taxpayers association’s Sherman. “Make privatization something that will improve Delta’s bottom line. I bet it can be done.”
So does Robert Poole of the Reason Foundation, one of the nation’s leading proponents of privatization. A Reason study in 1999 pointed to the private operation of Indianapolis Airport, which already was regarded as a leader in efficiency. The operator’s contract provides that the company won’t realize a profit until it has achieved $140 million in cost savings.
“Every indication is that [Hartsfield-Jackson] could be much better run by a company whose profits are linked to performance,” Poole says. “Delta could be a big beneficiary.”
When Shirley Franklin was elected two years ago, she was big on auditing government. One report, by Bain & Co., highlighted a number of possibilities by consolidating city and county functions and privatizing.
But then Franklin got real about running the city. Her power — like that of all local pols — rests in her ability to spend money. Shrinking government shrinks power. Plus, one of Franklin’s key constituencies is the army of city employees, far larger per capita than most other cities in Atlanta’s league. Efficiency would mean thinning the featherbedded ranks in City Hall.
So, the Bain report is largely ignored. And it doesn’t help that Bain honchos are Franklin’s buddies. So they are now lowballing their study, saying it would save the city only a piddling $20 million or so a year.
Not so, counters Sherman. “Our estimate is closer to $167 million.” That’s another figure that would more than pay for the bonds on Atlanta’s sewer repairs.
It isn’t going to happen. Too many political sacred cows — including the fattest, the airport — would have to be butchered. Too many make-work jobs would be forfeited. Too many insider deals would dissolve under the scrutiny of a private operator.
Unless citizens are heard. Loudly. How about demanding a straw ballot in the fall election:
Do you favor increasing your sewer fees threefold to pay for repairs? Yes or no.
Do you favor privatizing Hartsfield-Jackson to pay for the sewer job? Yes or no.
Do you favor mandating that the mayor and City Council find, in addition to the airport, $100 million in savings through consolidation and privatization? Yes or no.
I’d bet the results would be “no,” “yes,” “yes.”
Senior Editor John Sugg can be reached at 404-614-1241 or at john.sugg@creativeloafing.com.
Only a moron, someone who is sucking on the airport’s teat or a scoundrel who will disingenuously push an agenda (can you say Atlanta Journal-Constitution?) would dispute the wisdom of transforming the city’s biggest font of cronyism and corruption into financial relief for taxpayers.
The imminent calamity is well-known. A succession of administrations failed to smell the gazillions of gallons of yecky stuff seeping from Atlanta’s sad sack sewage system. So, with federal guns pointed at the city, Mayor Shirley Franklin has the stinking job of cleaning up the mess. Now.
The cost, according to Franklin, is $3 billion to build a tunnel and then expand and upgrade the system. There’s some question over whether alternative solutions — or ones that, minus fancy tweaks, would appease the feds’ demands — could save a billion or so, but hell, it’s only citizens’ money. Franklin won’t countenance other ideas on fixing the sewers, and with somewhat of a pout, dismisses such suggestions as drivel.
Just as she does with the idea of privatizing the airport. Pooh and double pooh on such blasphemies, sayeth our mayor (whose ex-husband and kids are attached, in the form of airport concessions, to that abovementioned airport teat).
Franklin seems absolutely discombobulated at the ... um, shall we say “unenthusiastic” response to her idea of trebling sewage fees over the next few years. OK, so such staggering increases could force poor families to choose between food and flushing. And, OK, so businesses might cut back employees to afford lavatory facilities. And, OK, other companies might decide to take a hike, saying (with eloquent double entendre), “Who needs this crap?” Despite all that, the mayor just can’t figure out why people aren’t jumping with joy at her plan. (Memo to Mayor Franklin: Folks are just darn tired of paying for waste, mismanagement and corruption at City Hall.)
Meanwhile, the state and federal governments have snubbed Franklin’s request for aid. Rich white guys, such as Falcons owner/Metro Atlanta Chamber Chairman Arthur Blank, are urging the city to pass Franklin’s fee increases. But, then, it’s doubtful Blank and pals have to sweat about paying monthly utility bills. The sewage fee increases punish poor and middle-class residents, and are irrelevant to the wealthy.
A few honest souls — those annoying anti-tax troublemakers and a couple of Republican state legislators — have been trying to get heard, with decidedly little interest from Franklin and with utter disdain from The Daily Voice of the Corporate Establishment.
“All we’re saying is that we should talk about the idea of privatization,” says John Sherman, president of the Fulton County Taxpayers Association. “Let’s get a few bids and see if it makes sense.”
Such radical thinking! Whew!
Keep in mind that the thug calling the shots from behind the curtain is Delta Air Lines, which doesn’t mind at all sticking it to the taxpayers. Neither does the AJC, especially when it’s looking out for its boardroom brethren, such as Delta.
Last week, an AJC editorial lambasted the idea of privatization, telling us that most of the airport’s $230 million in annual revenues already comes from private contracts — implying (falsely) there’s almost nothing left to contract out. (Memo to AJC: It’s the whole airport management we’re talking about, you dummies.) And the newspaper says — without a whiff of proof or without even quoting a pet “authority” — a private operator would have “to raise landing fees and gate rentals dramatically in order to generate any profit.”
That, my friends, is a statement composed of the same stuff that flows through Atlanta’s decrepit sewers. At the very least, the best that can be said is that the AJC is offering pure conjecture as fact. (The paper did provide 400 words of space to a privatization proponent, as if such a meager allocation of op-ed real estate was sufficient to discuss such a complicated subject.)
The ultimate deceit by the AJC, Franklin and other foes of privatization is the implication that something is unique at Hartsfield-Jackson, that somehow other airports don’t have debt, bonds to pay the debt, private concessionaires, and the like. The truth, of course, is that almost all major airports have debts, bonds and private contractors. Atlanta’s airfield is anything but unique, except in its top ranking in passenger travel.
So, what’s happened at other airports? A mere 11 months ago, the Atlanta City Council had a visitor, Katherine Howard, from an Australian outfit called MacQuarie Airports. It’s one of the private operators and, interestingly, it acquired Sydney’s airport and put about $3 billion into the pockets of that city’s citizens. The sale of three other Australian airports raised almost another $3 billion.
What did Howard tell Atlanta’s leaders the privatization of Hartsfield-Jackson would mean for taxpayers? She calculated the city would reap $2.6 billion.
Those numbers sound awfully familiar ... ah, yes, they almost exactly match what Franklin says the sewer job would cost.
Another stunning example: When Britain sold seven airports (including Heathrow and Gatwick) in 1987, the deal produced $2.5 billion for the government. Since then the private operator has invested $5 billion in the facilities, and generated almost $400 million in taxes.
But the city doesn’t have to go to Oz or Jolly Old to find an expert on airport privatization. Just a little ways outside the Perimeter, in Duluth, is the office of Scott Fuller, president of American Airports Corp., which operates nine, mostly smaller airports, including New Orleans Lakefront.
“I don’t think the issue is raising the cost for Delta,” Fuller says. “One thing we do is bring a lot of efficiency, more service at less cost. We’re more responsive to users.”
Efficiency? Responsiveness? Rare words around Atlanta City Hall.
Moreover, a study by the Reason Foundation found that customer satisfaction was measurably higher at privately run airports. Imagine that!
Fuller also has had his calculator out estimating what taxpayers could harvest by privatizing the airport. “Billions of dollars is the correct estimate,” he says.
There is one powerful disincentive to selling airports — the loss of tax-free government bonds. However, the bond problem can be solved if governments retain ownership of airports and merely lease them to operators.
Back to Delta. When Congress began considering test programs for airport privatization, the bully-lobbyists from the airline industry demanded veto power over any deals. So in Atlanta’s case, unless Delta jumps on board, any privatization plan is DOA.
The ultimate solution is for voters to demand that all of those fine capitalists in the federal government end corporate welfare for airlines and remove the carriers’ stranglehold on privatization deals.
More immediately, though, now is a good time to negotiate with Delta. The company just reported more losses — $458 million for the first nine months of the year. That follows a lot of other nine-figure-wide pools of red ink in the last few years.
“I think we should get Delta to sit down and offer them a deal [that], as the Godfather said, they can’t refuse,” says the taxpayers association’s Sherman. “Make privatization something that will improve Delta’s bottom line. I bet it can be done.”
So does Robert Poole of the Reason Foundation, one of the nation’s leading proponents of privatization. A Reason study in 1999 pointed to the private operation of Indianapolis Airport, which already was regarded as a leader in efficiency. The operator’s contract provides that the company won’t realize a profit until it has achieved $140 million in cost savings.
“Every indication is that [Hartsfield-Jackson] could be much better run by a company whose profits are linked to performance,” Poole says. “Delta could be a big beneficiary.”
When Shirley Franklin was elected two years ago, she was big on auditing government. One report, by Bain & Co., highlighted a number of possibilities by consolidating city and county functions and privatizing.
But then Franklin got real about running the city. Her power — like that of all local pols — rests in her ability to spend money. Shrinking government shrinks power. Plus, one of Franklin’s key constituencies is the army of city employees, far larger per capita than most other cities in Atlanta’s league. Efficiency would mean thinning the featherbedded ranks in City Hall.
So, the Bain report is largely ignored. And it doesn’t help that Bain honchos are Franklin’s buddies. So they are now lowballing their study, saying it would save the city only a piddling $20 million or so a year.
Not so, counters Sherman. “Our estimate is closer to $167 million.” That’s another figure that would more than pay for the bonds on Atlanta’s sewer repairs.
It isn’t going to happen. Too many political sacred cows — including the fattest, the airport — would have to be butchered. Too many make-work jobs would be forfeited. Too many insider deals would dissolve under the scrutiny of a private operator.
Unless citizens are heard. Loudly. How about demanding a straw ballot in the fall election:
Do you favor increasing your sewer fees threefold to pay for repairs? Yes or no.
Do you favor privatizing Hartsfield-Jackson to pay for the sewer job? Yes or no.
Do you favor mandating that the mayor and City Council find, in addition to the airport, $100 million in savings through consolidation and privatization? Yes or no.
I’d bet the results would be “no,” “yes,” “yes.”
Senior Editor John Sugg can be reached at 404-614-1241 or at john.sugg@creativeloafing.com.