Wow, the budget situation in the city of Los Angeles must be desperate indeed. From the March 2 L.A. Business Journal (no link available):
In a wide-ranging session with Business Journal editors and reporters…[Mayor Antonio] Villaraigosa said he hoped to help plug a budget deficit by privatizing some operations.
"Why do we have to own a zoo?" he said. "A lot of cities don't own their own zoos; they are privately run or have a public-private partnership structure. And, while we're at it, why do we have to own a convention center?"
The city is facing a $450 million deficit in the 2009-10 fiscal year beginning July 1 and a projected deficit of at least $500 million the following year. Villaraigosa is looking for major revenue sources – other than tax increases – that can whittle down those deficits, and prevent massive layoffs of city workers and cutbacks in city services.
Villaraigosa is also exploring whether Los Angeles should make a long-term lease arrangement with a private operator for its parking garages, surface lots and parking meters.
The L.A. mayor, an old union hand, might be benefiting from a Nixon-in-China situation:
Villaraigosa isn't the first Los Angeles mayor to suggest privatizing operations at the Los Angeles Convention Center. In 1994, then-Mayor Richard Riordan wanted to contract out management of Convention Center operations, claiming it could save the city up to $40 million a year.
But Riordan's proposal ran into a buzz saw of union opposition and was handily defeated by the City Council, according to Fernando Guerra, director of the Center for the Study of Los Angeles at Loyola Marymount University.
However, Guerra said, the outcome now might be different. "Under Riordan, this whole debate was highly ideological, with Riordan committed to privatizing as much of government as possible and former Councilwoman Jackie Goldberg essentially saying, 'Over my dead body.' Now, with the economic meltdown, these private-public partnership proposals might not be dead on arrival."
The Reason Foundation (whose Leonard Gilroy is quoted in the article) on the virtues of privatization here.