Reports

Report | Georgia PIRG Education Fund | Transportation

Road Privatization

Privatization of toll roads is a growing trend. During 2007, sixteen states had some privatized road project formally proposed or underway. In the last two years Indiana and Chicago signed multi-billion dollar private concession deals for public roads for 75 years and 99 years respectively. As a result of these deals, toll rates on these roads will increase steadily and revenues will be paid to private company shareholders rather than to the public budget.

Encouraged by the enormous anticipated profits that private road operators will reap from these deals, Wall Street investors and high-priced consulting firms have promoted similar deals to other states and local governments. Although offering a short-term infusion of cash, privatization of existing toll roads harms the long-term public interest. It relinquishes important public control over transportation policy while failing to deliver the value comparable to the tolls that the public will be forced to pay over the life of the deal.

Proposed deals to construct new roads or bridges that would be privately operated are a more complicated matter. There may be instances where private companies can deliver services that the public sector currently lacks and can not efficiently create. However, private deals for new construction should also follow the principles outlined below to adequately protect the public interest. Any potential advantages of privately construction should be weighed against the disadvantages of private financing and control.

Governments have a long history of outsourcing service delivery on public thoroughfares. Private companies, for instance, operate gas stations and food service at public rest stops. But the public interest is best served by outsourcing only those functions where public capacity is lacking and where continual competition exists for privately provided service.

In general, privatization makes sense only for activities where the private sector has a clear comparative advantage over public provision of those same services. The common characteristics of road privatization deals are that they enlist a private intermediary to borrow large sums of money backed by a schedule to collect multiple decades of steadily increasing toll rates. Private proposals should thus be judged according to the relative costs and benefits of enlisting this intermediary to borrow and to hike tolls. Governments can borrow upfront sums at substantially lower cost than can private companies. Government is also more democratically accountable than private companies when it comes to setting tolls. (In fact, according to a chorus of investment analysts, a chief contribution of the private intermediary is precisely that it can diminish public accountability for future toll hikes). Thus toll road concessions are a bad idea precisely because they outsource activities where the private sector is less capable of serving the public.

In addition to an inability to ensure that the public will receive the full value for its future toll revenues, privatization of toll roads entails a number of additional problems. Over the long-term, these may be of even more serious concern:

• Loss of public control of transportation policy due to a fragmented road network, and an inability to prevent toll traffic from being diverted to local communities, or to change traffic patterns on toll roads without paying additional compensation to road operators.

• An inability to ensure fair or effective privatization contracts due to leases that last for multiple generations and therefore can not fully anticipate future public needs.

• The upfront privatization payoff is a short-term budget fix that does not address long-term budget problems and requires drivers and taxpayers to pay more over the long term.

For both existing toll roads and new construction, the safeguards to protect the public interest against bad privatization deals can be expressed in seven basic principles:

Public control retained over decisions about transportation planning and management;

Fair value guaranteed so future toll revenues won’t be sold off at a discount;

No deal longer than 30 years because of uncertainty over future conditions and because the risks of a bad deal grow exponentially over time;

State-of-the-art maintenance and safety standards instead of statewide minimums;

Complete transparency to ensure proper process;

Full accountability in which the Legislature must approve the terms of a final deal, not just approve that a deal be negotiated; and

No budget gimmicks because a deal must make long-term budgetary
sense, not just help in the short term.
 

Report | Environment California | Consumer Protection

Toxic Baby Bottles

Products marketed for infants and children are not always completely safe for their use. Many contain toxic chemicals that may have detrimental health impacts for children exposed during critical stages of development. In this report, we analyze the extent to which five popular brands of baby bottles leach bisphenol A, a developmental, neural, and reproductive toxicant, into liquids coming into contact with them.  We found that all five brands leach bisphenol A at dangerous levels found to cause harm in numerous laboratory animal studies.

California and the U.S. should reform chemical policy to ensure that all products on the market are safe for children.

Report | Georgia PIRG Education Fund | Consumer Protection

Trouble In Toyland

Toys are safer than ever before, thanks to decades of work by product safety advocates and parents and the leadership of Congress, state legislatures and the Consumer Product Safety Commission (CPSC). Nevertheless, as parents venture into crowded malls this holiday season, they should remain vigilant about often hidden hazards posed by toys on store shelves.

The 2006 Trouble in Toyland report is the 21st annual Public Interest Research Group (PIRG) survey of toy safety. This report provides safety guidelines for parents when purchasing toys for small children and provides examples of toys currently on store shelves that may pose potential safety hazards. This year, we focused on four categories of toys: toys that may pose choking hazards, magnetic toys, toys that are excessively loud, and toys that contain potentially toxic chemicals.

We visited numerous toy stores and other retailers to find potentially dangerous toys and identify trends in toy safety.

Report | Georgia PIRG Education Fund | Health Care

Paying the Price

Millions of uninsured and underinsured Americans struggle to afford the medicines they need, even forgoing medically necessary drugs when prices are out of reach. When discussing the high cost of prescription drugs, politicians often focus on the financial burden carried by senior citizens. Unfortunately, as this report shows, high prescription drug prices are a problem for Americans of all ages, particularly for the uninsured.

Today, nearly 46 million Americans under the age of 65 lack health insurance, and millions more with insurance lack prescription drug coverage. Young adults from 19 to 34 years old are the fastest growing group of uninsured, accounting for 40 percent of the total.

At the same time, prescription drug prices are skyrocketing in the United States, rising much faster than the rate of inflation. In 2005, Americans spent $252 billion on prescription drugs.

Report | Georgia PIRG Education Fund | Health Care

Turning Medicine Into Snake Oil

False and misleading prescription drug advertising is common and dangerous. Prescription drug marketers are inundating doctors, and to a lesser extent, the public, with marketing that misrepresents risks, promotes unproven uses, and makes unsubstantiated claims. The false and misleading messages are communicated through conventional advertising, sales representatives, doctors speaking on behalf of drug marketers, and through clinical trial suppression, manipulation and misrepresentation. Sadly, the Food and Drug Administration (FDA) is ineffective at addressing the problems. This report takes a comprehensive look at all of these facets of the prescription drug marketing problem and suggests effective solutions.

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