Flush Your Free Lunch Down the Toilet

Mayor Plusquellic's Sewers for College plan has evolved into a lease of the Akron sewer system rather than sale. After looking at other lease deals on infrastructure around the Country the original plan to sell the system outright has been modified to be a lease deal. Leases comes with the same caveats as sales. The system would almost certainly be leased by a foreign entity and that foreign corporation would have to raise user fees in due time to cover operations. A spokesperson from one firm is quoted in today's ABJ article:

''Generally, it means more efficient operations and lower-cost pricing,
even taking into account profit for dividends and reinvestment into the
system,'' Henning said. ''It also means that customers are paying 'real
cost' pricing, rather than a subsidized price based off the use of
government bonds to finance infrastructure improvements.''

You see public works are actually subsidized because capital improvements are financed with government issued bonds. Oh wait a minute, I thought local governments pay debt service with revenue collected from user fees and taxes. So the subsidy actually flows from citizens that use the infrastrucure. We are subsidizing ourselves, that has to stop.

Call it a lease, a sale, creative financing, it's all the same. Privatization will come with more costs in the form of increased fees. This deal can't create money out of thin air and fund universal college scholarships at the same time.