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COVID-Related Fiscal Issues Could Become New Excuse to Privatize Drinking Water

A Philly suburb wants to sell its water as a “path to financial stability,” offering a glimpse of a post-COVID society.

A Philly suburb wants to sell its water as a "path to financial stability," offering a glimpse of a post-COVID society.

Is Chester, Pennsylvania, the proverbial canary in the coal mine? Sure does look like it.

The Philadelphia suburb is trying to sell its drinking water system. “The city’s fiscal issues have been greatly exacerbated by the COVID-19 crisis,” Mayor Thaddeus Kirkland wrote in an April letter to residents. “It is our hope that the fiscal problems will be of a limited duration, however, as there is a path to financial stability on the horizon.”

That “path to financial stability” is to hand over the Octoraro Reservoir and the surrounding 1,358 acres of public land to a private corporation. Water bills would almost certainly go up, because, on average, private water utilities charge 59 percent more than public utilities. The system’s public workers would be outsourced (and almost certainly paid less). And all that land could be fenced off from public use.

For what? Somewhere around $200 million. A nice chunk of change, given Chester’s longtime budget issues. But add up the headaches and rate increases that often come with privatization, plus the loss of public control and land access, and it wouldn’t be worth it.

“A lot of people around here take ownership of [the reservoir],” a nearby resident told Lancaster Online. “We’re proud of it. It would be a crime.”

Why should anyone care outside of Chester? Because vulture capitalists might be coming your way soon.

Like during the Great Recession, state and local revenues are cratering. State governments are looking at a $765 billion budget shortfall over the next three years. Rainy day funds are woefully inadequate. States can raise taxes on corporations and the wealthy — and they should. But the federal government has to send aid to states and localities rather than continue to overwhelmingly help large corporations.

Until then, companies like Aqua America — the front-runner in Chester — and the entire infrastructure privatization industry will be licking their lips. Global Water Intelligence, an industry insider rag, writes, “The inability to raise water rates … [and] an instant reduction in tax revenues for many municipalities on the back of job losses brought about by COVID-19 could accelerate acquisition opportunities for investor-owned [i.e., private] water utilities.”

Chester isn’t alone. Nationwide, water and wastewater systems are expected to lose $27 billion in revenue this year. And water isn’t all that’s at stake. Word on the street is, there’s a renewed effort to privatize St. Louis Lambert International Airport, a plan axed back in January because it made zero fiscal sense.

As a finance executive admitted back in 2008, “Desperate government is our best customer.”

Chester must resist the temptation of the fleeting sugary high a few hundred million dollars would bring. Does it want to be another tragic story of privatization gone wrong? Does it want to be like Chicago, which recklessly sold off its downtown parking meters in 2008 for at least a billion dollars under value? Does it want to be the next Flint, where a private water company was part of the team that enabled a lead crisis?

Selling off access to drinking water — a fundamental public good — is wrong, no matter the circumstances, and especially during a pandemic.

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