By now, there is no need to recount how badly the Great Recession battered public finances, other than to reiterate that governments’ fiscal challenges remain unprecedented - especially at the state and local level. The economy’s steep, prolonged downturn and slow recovery have hit tax revenues hard and put historic pressure on safety net programs.
As noted in CSG's new fiscal and economic policy brief, challenges will likely persist through 2012, as Recovery Act funds dry up, healthcare costs grow, and other structural factors weigh on state and local budgets. For policy makers weary of cutting spending or raising taxes to close budget gaps, asset privatization – the long-term sale or transfer of public assets to private parties – offers an attractive alternative. Here is a run-down on some recent experiences with this practice at the state and local level.