The Daily Item, Sunbury, PA

February 15, 2013

No authority to auction off public property


Daily Item

---- — The political atmospherics surrounding Attorney General Kathleen Kane and Governor Tom Corbett drew the spotlight to the collapse last week of the scheme to outsource Pennsylvania's $3.5 billion state lottery to a British company.

It fell to General Kane, barely two months in office, to review the state's contract with London-based Camelot Global Services. She found the contract did not meet the measure of state stature or constitutional standards, which left the lottery under state employee management and the Camelot contract in a state of confusion.

While the particulars are not trivial and may be argued within the wonkish weeds of legal opinion and revenue policy, there is a big picture measure being missed in the Corbett administration's commitment to privatization.

It takes us back to the "you didn't build it" national divide so frequently chanted at separate party conventions last summer.

Free enterprise enthusiasts emphasize the industrious, risk-taking, pioneering entrepreneurs unleashed from crushing taxation and regulation. They emphasize individualism.

Those who see strength-through-unity emphasize economic progress as the offspring of a social contract that creates the context for individual success through public investment in transportation, education, well being and peace.

Both viewpoints properly borrow from each other. But they should not steal, which, regrettably, appears to be the Corbett administration's definition of privatization.

The governor's policies bend toward the sale or outsourcing to private ownership and management such revenue-generating assets as the state liquor store monopoly and the state-run lottery system and market-capture opportunities that result from compulsory public education.

The very reason these enterprises are attractive to the private investment is that they are state-enforced opportunities. They are brands, markets and value created by laws, regulations and capital extracted and invested under threat of imprisonment.

What startup company would not succeed if armed with the tax-free, regulation-exempt power to separate the world between investors and inmates? There is no genius in that.

When the public acceded to or embraced these public services for the greater good, that bargain came with the promise of responsible management and accountable ownership. That was the contract.

A temporary occupant of the executive office should neither have nor believe he or she has the authority to auction away Pennsylvania's public property without the expressed consent of the owners -- in this case, the voters through their elected representatives.

To do otherwise is to confuse privatization with plunder.