Chicago leases parking meters for 75 years

Earlier this week Mayor Daley announced a plan to privatize the city’s metered parking.  The preliminary announcement was made on Monday.  The deal, which is for 75 years and from which the city will earn 1.1 billion dollars, was put to vote today–only three days after it was announced–and was approved by the city council.

I question the decision for several reasons, and earlier this morning I emailed my alderman’s office to ask them to reconsider voting for this measure so hastily.  Regrettably, it seems that my alderman Tom Tunney was one of the supporters of this measure.

There seems to be no reason why the city should rush to a vote on something that will impact the cost of visiting and living in Chicago for nearly a century.  As part of the new deal, rates will incrementally increase over the next four years.  The first price hikes will occur Jan. 1 2009 and some neighborhood parking costs will triple:

QWhat will it cost to park at a downtown meter?

AThe $3 an hour fee to park at prime Loop spots increases to $3.50. After that, the price goes up 75 cents a year through 2013, when it hits $6.50 an hour. Elsewhere downtown, the $1 an hour will double to $2 next year and hit $4 an hour in 2013.

QWhat will it cost to park at meters in city neighborhoods?

AMeters that now cost a quarter for an hour will increase to $1, with an extra quarter tacked on each year through 2013, when the price reaches $2 an hour. (source)

As I know from painful personal experience, parking and parking violations are a considerable source of revenue for the city.  With only 3 days to consider the measure, did Aldermans have the adequate time to consider whether the revenue received from parking meters for 75 years is worth the sacrifice in order to plug the $150 million hole in the budget we have at this moment?

What’s more, the private group’s lobbyist that had the winning bid for the meters is the mayor’s nephew.  The mayor made a statement that the group won because it had the highest bid, but to my knowledge has not provided any further evidence to substantiate the claim.  Yet another detail that will likely escape necessary criticism.

This entire proposal has aggravated me since it came to light this week.  I am not comfortable when government at any level operates in a rubber-stamp fashion, where legislative bodies do not fulfill their function to check overreaching executive offices.  And I am not comfortable when major long-term decisions are rushed to vote and poorly implemented.  Illinois for too long has put up with stop-gap legislation regarding budget decisions.  It is time that our elected officials at every level of state government to give budget concerns the adequate attention they deserve, and to come up with economically sustainable solutions.

In Indiana, there was a similar decision to lease the toll roads for a long term, which off the top of my head I believe was 90 years.  Their decision was even more controversial at the time because the roads have been leased to a foreign entity.  Yet Indiana is one of the few states with a balanced budget.  How is this decision sitting with Hoosiers now?  Are the two connected at all?  Has privatizing part of the infrastructure of Indiana led to a more stable government budget?   And will it remain sustainable and profitable for Indiana for the remainder of the lease?  These are the types of questions I imagine should have been considered in Indiana as well as in Chicago, and that were certainly not addressed by my city.  [At this point I am speculating re: Indiana's tolls.  My computer is having trouble  and it is getting late.  If any errors have been made, please address them in the comments.]

(This post on the Tribune website does a good job of identifying the key supporters and opponents on the vote and was the key source for my post here.  I highly recommend reading it.)

Local vs. Big Box…Fight!(?)

In light of yesterday’s post, which at the end touched on themes of local commerce as opposed to global industry, I found this post at the Where blog to be very interesting:

Time to Reassess the Boxscape

The author of the post weighs a recent argument they read about big box retail influencing local markets (the author is concerned with urban markets in particular) in a positive way with his general aversion to Big Box stores such as Wal-Mart.  It seems to boil down to a lowest-price v. highest-[moral?]value trade-off.  I still go through this struggle personally at least once a week: favoring the ease of purchasing something from a chain store to trying to search out a local vendor or merchant.  Often it is simply easier and cheaper to find something at Jewel or Borders than their independent local counterparts.  But does that justify the action?  What makes a purchase necessarily right or wrong?  If I believe one thing and act in another largely due to convenience and availability, do I become culpable?

On Competing Economic Models

No matter what news source you prefer, it is nigh impossible right now for almost every newscast or radio show or article to somehow refer to the ongoing ‘global financial crisis.’  It still seems to have no end in sight.  Every day seems to yield yet another entire industry that is on the ‘verge of collapse.’

Recently I listened to an episode of the Planet Money podcast that featured an interview with Peter Schiff. Apparently Schiff has been giving warnings about this financial crisis for years.  The clip below is from August 2006, and it’s just one example of similar appearances he has made:

This video is a great example of how accurate Schiff’s analysis of our economy has been over the long term.  Schiff is an economist from the Austrian School. The Econ course I took at IWU was taught by a professor who was also a strong supporter of Austrian School economics, which overwhelmingly embraces a free-market philosophy with near-zero governmental role in the economy.

In contrast, the prevailing economic philosophy of most of the economic advisors in the the incoming Obama administration are Keynesian. Keynesian economist are antithetical to Austrian economists in that they believe that government should have an active role in steering and supporting the economy.  Hence the continued announcements of bailout after bailout after bailout(?).

With the continued announcements of government intervention into our economy, I feel as if there is some sense in the Austrian School.  But I am a little tired of there only being two options.  I am encouraged in the alternative that some authors propose of focusing on local and regional economies instead of the ‘global’ economy.  Ultimately, this sort of economy is likely the most sustainable.  Participating in local economies yields a more direct benefit for the community overall by keeping capital and raw goods within the immediate community instead of exporting them elsewhere.  However, this type of philosophy seems to be more oriented towards agriculture than industry, which ultimately creates a problem for current economic and trade realities both domestically and internationally.  I support localizing our food chains and our energy infrastructure, but start to balk at the possibility of localizing other major industries.  Not all industries are feasible in all regions, after all.  Perhaps that is why this ‘alternative’ economic model holds such interest for me: it requires a completely different way of thinking, a reorientation and re-evaluation of the past two centuries since the Industrial Revolution.

My own economic philosophy is still forming.  Given the current climate, I’m sure there will be ample opportunities to develop and test it, in real-time.