Ventures a drain on states, localities : For government-run businesses, $3.5B loss

USA Today reports:

Government-owned businesses that generate revenue for states and cities have taken a sharp turn downward and now are draining money from many struggling governments, a USA TODAY analysis found.

States and cities operate hundreds of such enterprises — power companies, sewer systems, betting parlors, subways and more — that earned more than $120 billion in profits during the 1990s.

These businesses started losing money in 2006 and are on track to lose $3.5 billion nationwide this year, according to an analysis of data from the Bureau of Economic Analysis (BEA).

This reversal is adding to the financial squeeze state and local governments are suffering because of a 6.7% drop in tax collections during 2009. Governments are raising taxes, hiking utility rates or cutting budgets to cope.

Great moments in government.