Exploring Privatization or Just Talk?

It was heartening to learn Pittsburgh officials are opening up to the idea of looking at outsourcing and other private sector involvement to solve the City’s perennial fiscal problems. The Allegheny Institute has been arguing for such an approach for 15 years only to have our research and recommendations rebuffed by elected officials. Now, according to recent news accounts, the finance director has been telling New York financial players that Pittsburgh is actively exploring public-private partnerships as a way of generating revenue and/or lowering costs.

The time has come-the Mayor now says-to be open to a concept that is widely used already by other state and city governments but one that has been stymied in Pittsburgh. Political and union led opposition toward anything hinting of privatization has been fierce. Therefore, it must be asked; Is this a real epiphany on the part of the Mayor and his staff, or is it just an effort to convince financial markets that Pittsburgh is moving toward a sensible approach to solving deep and longstanding fiscal problems?

Certainly, it is to be hoped that the more open stance is real and sincere. If it is, the Mayor deserves congratulations. If previous mayors and councils had adopted a friendlier position on privatization, outsourcing and public-private partnerships 15 years ago instead of wasting enormous amounts of money pursuing a publicly funded, wrongheaded growth strategy, Pittsburgh would undoubtedly been in better shape than it finds itself today. Unfortunately, delaying the shift toward market based, private sector involvement for so long has almost certainly lowered the potential gains to be had from the new approach.

Still, it is never too late to begin using the private sector to improve the City’s financial situation-the sooner and more extensively the better. Let’s hope for the sake of City’s long term well being the Mayor is serious and the inevitable union and Council opposition can be overcome.