Privatization gets tricky

by Brian Clarey


We are a nation that values its private industry, sometimes to the detriment of our other institutions — private corporations these days seem to have even more rights than people do. And we will always have those who believe that privatization is the key to all our ails, because all government can do is get in the way of private industry. Take, for example, syndicated columnist John Stossel, who in recent months has called for the privatization of our roads, our school system and our jails.

But you hear the clamor for privatization most often in times like these, when governments are strapped for cash.

Facing a $2.5 billion budget shortfall, the state of North Carolina seriously considers the privatization of the alcohol business, which brings about $275 million a year in revenue.

Privatizing the booze business in North Carolina would be a terrible business decision for the state — the $300 million or so a sale of the ABC system would generate is less than 10 percent of our budget shortfall, and we would lose a substantial amount in revenue afterwards. But it would be good for bar owners, liquor salesmen and drinkers, who would reap the benefits at the end of the state-run monopoly.

Privatizing the booze business in North Carolina would be a terrible business decision for the state

We feel the government should not be in the booze business, particularly a government like ours, with such Manichaean views on the wages of sin.

We shouldn’t consider the issue of privatization in those stark terms, either — as being always good or always bad — as news hits the wire of discussions on the sale of Lawrence Joel Memorial Coliseum and Bowman-Gray Stadium by the city of Winston-Salem to Wake Forest University and Winston-Salem State University, respectively.

The facilities, like the coliseum in Greensboro, take on significant losses every year — about $850,000, compared to the coliseum’s $1.1 million, and it is an easy thing to point to these numbers as justification for flipping these drains on the public coffers.

But we’re starting to think of these venues as utilities, ones that bring economic activity, prestige and entertainment to the cities in which they do business. And since very few of the turn a profit, we are okay with municipalities absorbing these costs for the greater good.

But if Wake Forest and WSSU were to pay the freight on these arenas, the question becomes this: What’s the downside?

Bowman Gray and the Joel would likely function in the same manner as they do now, with concerts and nationally televised sporting events and offbeat conventions, giving us the same economic and cultural cachet.

The difference is that the operating budget would no longer come from tax money — at least in the case of Wake Forest and the Joel. WSSU is a part of the UNC System, which brings us down another road entirely.

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