Reason Foundation

Reason's Len Gilroy Talks TVA Privatization, Annual Privatization Report on Heartland Institute Podcast

Posted on May 23, 2013, 3:54pm | Leonard Gilroy

Earlier this week, I had the pleasure of sitting down with the Heartland Institute's Steve Stanek for an episode of their Heartland Daily Podcast, where we discussed President Obama's recent budget proposal to study a potential privatization of the Tennessee Valley Authority (TVA). From Heartland's Somewhat Reasonable blog:

President Barack Obama has proposed studying the possibility of privatizing the Tennessee Valley Authority, the nation’s largest government-owned utility. Privatization expert Leonard Gilroy of The Reason Foundation tells Heartland's Steve Stanek why the president has a good idea, and why area politicians in both major political parties oppose it.

An iTunes link for this podcast is available here. Beyond the proposed TVA privatization, we also discussed several highlights from Reason Foundation's Annual Privatization Report 2013.

Speaking of the TVA, I was also quoted in a Budget and Tax News article last week on the privatization proposal. Here's an excerpt:

The Chattanooga Times Free Press newspaper declared in an editorial that opposing TVA privatization is a mistake and noted the disconnect between some Tennessee politicians who declare they favor free enterprise and limited government yet oppose privatization.

“The only real argument for keeping the TVA's assets in government hands are weak arguments like, ‘people like the TVA how it is’ and ‘that's how we've always done it.’ Sadly, that stale mindset has overtaken area Republican lawmakers who claim to oppose government control and socialist programs,” the newspaper’s editors wrote. [...]

Privatization expert Leonard Gilroy of Reason Foundation said he sees lots of institutional opposition to privatization.

"Despite being an utterly nonessential federal asset, there appears to be no political will in Congress whatsoever to authorize a TVA privatization," he said. "Senator Alexander, Senator [Bob] Corker (R) and other Tennessee congressmen of both political parties have already condemned the proposal to merely study privatization, which is all the President has proposed. This just goes to show how difficult it is in real life to shut down government agencies and enterprises once they spring to life and build constituencies."

Nonetheless, he said privatization ought to be studied.

"There's nothing inherently governmental about running a power business, so privatization could provide an opportunity to bring in a businesslike approach and more efficient operations and management compared to what's seen today as a government-owned enterprise," he said. "However, there would be some very thorny implementation issues to work out, not the least of which being how to handle the divestiture of the TVA land and power assets that were originally seized from private hands to begin with."

For a more detailed analysis of the merits and challenges associated with privatizing the TVA, check out this recent Reason Foundation article by Steve Esposito. 

How to Avoid Closing Washington State Parks

Posted on May 17, 2013, 1:57pm | Leonard Gilroy

Many thanks to the Washington Policy Center for publishing my legislative memo today on how to avoid the closure of dozens of Washington State parks, as Gov. Inslee has proposed if his tax increase package fails to advance. Here's an excerpt:

The threat of closing five dozen state parks is yet another variation on the well-worn “Washington Monument Syndrome” tactic designed to threaten closure or disruption of popular amenities if tax increases are not approved.

Political tactics notwithstanding, Washington’s state parks system does indeed face significant funding challenges. General fund appropriations for parks have been on the decline for years, a predictable circumstance in a fiscal football game in which funding for major spending priorities like education, healthcare, public safety and public-sector retiree benefits increasingly crowds out funding for the “nice-to-have” amenities like state parks. The sooner that policymakers and citizens understand this basic trajectory is only going to intensify — and that new solutions are needed to sustain the “nice-to-have” items like state parks — the better.

Some in Washington have begun to realize this when it comes to parks. In recent years, the legislature pushed the Washington State Parks Commission to pursue financial self-sustainability, and to its credit, the agency has pursued a range of strategies that include staff reductions, an increasing reliance on user fees and non-recreational leases, and expanding revenue-generating assets within the parks themselves. While these actions have not solved the funding challenge, they have been useful steps to keep the parks system afloat.

Short-term infusions of funding along the lines proposed by the governor are not a sustainable financial strategy if the goal is to keep parks open and thriving for the long term. Washington, like many other states, is due for a major rethinking of the structure and operation of the parks system itself. […]

Though it may be anathema to the preconceived visions held by some parks advocates, there is indeed a strong role for private-sector and non-profit operators in the state parks. For example, nonprofits played a major role in taking over operations of dozens of California state parks to help avoid closure amid 2012’s budget battles, and many municipal parks, zoos and aquariums, including New York City’s famed Central Park, have long been operated by nonprofit conservancies and “friends” groups.

Read the whole thing here or here for more on the role of the for-profit sector in operating Evergreen State parks.