Here’s our weekly analysis of privatization in the news and in communities nationwide. Not a subscriber? Sign up.
This week’s highlights
- The Trump administration privatized coronavirus testing instead of taking the World Health Organization’s (WHO) cheap test kits. (More on the administration’s obsession with optics over results here.)
- Coronavirus school closures are affecting millions of students nationwide in public, charter, and private schools.
- Here’s why Maryland’s proposed Water Quality Accountability Act is really water privatization bill.
1) National: Coronavirus school closures are affecting millions of students nationwide in public, charter, and private schools. Los Angeles, the nation’s second-largest school system, will shut down its 900 campuses serving more than 670,000 students beginning today. “‘I’m closing the schools. That’s all there is to it,’ West Virginia Gov. Jim Justice (R) said Friday. ‘There’s a downside to this but it is the right thing, in my mind, to do.’ He did not set an end date, saying schools would be closed as long as necessary. No cases of COVID-19 have been confirmed in West Virginia to date, but Justice suggested it’s only a matter of time. ‘We’ve got a monster that’s looming.’”
In New York City, controversy broke out over Mayor de Blasio’s decision to keep the schools open. The Union of Rank and File Educators, a justice caucus in the NYC United Federation of Teachers, warned that teachers would call a sickout if the mayor didn’t relent—which he finally did yesterday. “It is quite clear that this crisis is growing intensely,” de Blasio said. The schools will be closed at least until April 20.
The Centers for Disease Control has issued recommendations on school closure: “There is a role for school closure in response to school-based cases of COVID-19 for decontamination and contact tracing (few days of closure), in response to significant absenteeism of staff and students (short to medium length, i.e. 2-4 weeks of closure), or as part of a larger community mitigation strategy for jurisdictions with substantial community spread* (medium to long length, i.e. 4-8 weeks or more of closure). Available modeling data indicate that early, short to medium closures do not impact the epi curve of COVID-19 or available health care measures (e.g., hospitalizations). There may be some impact of much longer closures (8 weeks, 20 weeks) further into community spread, but that modelling also shows that other mitigation efforts (e.g., handwashing, home isolation) have more impact on both spread of disease and health care measures. In other countries, those places who closed school.”
2) National: The Senate has struck down a rule proposed by Trump’s education secretary Betsy DeVos to “sharply limit debt relief for students misled by schools that lured them in with false claims about their graduates’ career and earning prospects.” The New York Times reports that “Democrats emphasized that the original loan forgiveness rule, on the books since 1995, was little used until for-profit chains starting imploding in 2014. ‘These for-profit colleges are the coronavirus of higher education,’ Mr. Durbin said on the Senate floor. (…) The legislation will now go to President Trump, who will decide whether to uphold the rule with a veto or side with Congress over his own education secretary.”
3) National: FirstGroup, the British-based owner of First Student, one of the largest providers of privatized school bus services in the U.S., has announced that the unit is up for sale. First Student operates 42,500 yellow school buses in 40 U.S. states and seven Canadian provinces. Also on the block is and First Transit, which is used by 324 million passengers each year.
4) District of Columbia: DC Mayor Muriel Bowser is closing the city’s schools because of the danger of coronavirus spreading—but is refusing to close the city’s 123 charter schools, which educate roughly 44,000 students. Bowser’s office apparently told the media that she doesn’t have the authority to tell charters—which are funded by taxpayers—what to do. “Bowser’s interpretation of the law is in contrast to many other cities and states, where leaders have been exerting greater control over their charter schools as fears of the pandemic grow,” Washington City Paper reports.
5) Ohio: Barbara Masters of Perrysburg has written in to the Toledo Blade to denounce state Republicans who are chasing federal money for school privatization. “The Republicans who control Ohio’s government are eager to participate via EdChoice. Forget that Ohio’s public schools have received inadequate state funding for decades. The poorer districts have been unfairly deprived because of low property tax values. Cities voting tax abatements to firms that don’t produce the pledged jobs have also cheated the schools. Now politicians want to enable huge numbers of students to be chosen by private schools with no strings attached for vouchers. They don’t even have to take the battery of public school tests to prove their new success. That is par for the course in a nation run by corporate billionaires bent on privatization and compromised politicians who answer to their lobbyists.”
6) Tennessee: The Tennessee Education Association has called a rally in Nashville today at noon to demand proper funding for the schools. TEA’s Sue Ogg, who represents Maury, Hickman, Giles, Dickson, Cheatham and Humphreys counties “said Tennessee students and teachers receive some of lowest amount of funds in the southern United States and the upcoming event is an effort to push state lawmakers to change that. ‘Right now we are lowest in the Southeast except Mississippi, and that is not okay,’ Ogg said. ‘That means our pupils are not getting what they deserve. They are not getting what students in other states are getting. We want to get money into the hands of teachers and pupils.’”
7) National: Unprecedented conditions created by the COVID-19 selloff have staggered the $3.9 trillion municipal finance market, which underpins public infrastructure, services, and tax and budget financing. The market was hammered on Wednesday and during Thursday’s crash but recovered some breathing space on Friday following Trump’s declaration of a national emergency and massive liquidity operations by the Federal Reserve. But Bloomberg reports that “state and local government debt is headed toward a 4.2% loss, the biggest weekly drop since at least May 1987, according to data compiled by Bloomberg. That wiped $66 billion from the Bloomberg Barclays municipal-bond index’s market capitalization.” Conditions vary by sector, with senior living experiencing greater risk.
The fiscal risks to states and cities going forward are also expected to be substantial, especially for those which don’t have rainy day funds. During the “Great Recession” following the 2008 crash, road traffic declines put serious pressure on infrastructure revenue, and privatizers were on the hunt for desperate governments to sell off their public assets and outsource their services. For the “public-private partnerships” sector, debt pricing will be difficult and liquidity is tight so deals may be delayed or called off.
The Wall Street Journal reports that prices fell drastically last week “after investors pulled $1.8 billion from muni-bond mutual funds over a two-week period. The outflows, which were the first in more than a year, reflect mounting investor concern that the coronavirus will drag down even stable investments such as taxpayer-funded roads and sewers. They may also signal the unraveling of a hypercharged base of buyers that crowded into tax-exempt bond funds to escape the consequences of the 2017 tax law and pushed prices to record levels.” The Financial Times had reported “gluttonous demand” for munis only a few weeks earlier. [Subs required]
For an overview of the happenings in the muni market last week listen to the Bond Buyer podcast interview of Michael Zezas, managing director of research at Morgan Stanley. [Audio, about 30 minutes].
8) National: With air travel getting hammered by the coronavirus outbreak, the Financial Times reports that the future looks bleak for global airports. “The rapid spread of coronavirus, and the ensuing travel restrictions that are putting airlines under huge financial strain, led to one of the worst months on record for the airport industry, putting operators the world over under acute financial pressure.” [Sub required].
9) National: But it seems the COVID-19 financial crisis is putting strange thoughts even into the heads of Wall Street analysts: “If I were President of the United States, I would announce a massive $5-trillion dollar, 10-year infrastructure project paid for with 1% 100-year bonds” says Barry Ritholtz.
10) Florida: The Florida Times-Union’s Nate Monroe reports that despite the ouster of the CEO of JEA, Jacksonville’s electrical utility, over a botched and shady privatization deal, “a key lieutenant remains.” Monroe writes, “Herschel T. Vinyard Jr. is probably best known as the bureaucratic enforcer of a bizarre, unwritten Rick Scott-era prohibition on the use of the terms ‘climate change’ and ‘global warming’ by employees of the state’s top environmental protection agency. A foot soldier in Scott’s war against science and Florida’s environment—which Gov. Ron DeSantis has, to a degree, sought to reverse—Vinyard’s legacy as the head of the Florida Department of Environmental Protection was one of reduced morale, reduced headcount, reduced focus on protecting the state’s natural grace and reduced transparency. (Vinyard’s officials at the time said no ‘climate change’ prohibition existed, but interviews and records from the Florida Center for Investigative Reporting were far more compelling.) So why not hire Vinyard to oversee corporate compliance and environmental affairs for JEA?”
11) Maryland: Writing in Maryland Matters, Rianna Eckel, Glenn Middleton and Claude J. Morales warn that the proposed Water Quality Accountability Act is a water privatization bill. “It would take away all public funding from systems that fail to produce newly required reports. That’s how water corporations would take over systems: by starving them of resources. In particular, many of Maryland’s small, rural communities depend on federal funding through the USDA’s Rural Utilities Service (RUS) and EPA’s Safe Drinking Water State Revolving Fund. This legislation confuses and possibly puts in jeopardy these sources of infrastructure funding. (…) Maryland American Water wants to impose the corporation’s valve inspection schedule and other reporting requirements on all of our state’s 466 community water systems. It wants one size to fit every system—from Washington Suburban Sanitary Commission (WSSC) with its 1.8 million service population to the Thayerville Water District serving around 50 people in Garrett County. This is going to carry a huge price tag, one that water customers will have to pay through rate hikes.”
12) Pennsylvania: Harrisburg has rejected water privatization. “The CRW Board voted to delay implementation of the new storm water fees until July 1. The delay will allow CRW to seek approval from the U.S. Environmental Protection Agency for a 20-year, $315 million plan to reduce wastewater and storm water overflow draining into local waterways. Based on CRW’s decision to postpone the rate increases, the city will drop the idea of selling or leasing the water and sewer systems, The Burg reported on November 20. ‘Ultimately, I’m hopeful that CRW can get the job done,’ Papenfuse said. ‘Privatization is off the table.’”
13) International: Canada’s National Union of Public and General Employees (NUPGE) is calling for accounting standards that recognize the full cost of P3 privatization schemes. “The privatization industry has used lack of accounting standards for P3s to keep all or part of the cost of P3 privatization schemes off governments’ books. This ability to keep the money borrowed to build new infrastructure off governments’ books helps explain why P3s are one of the most popular forms of privatization. P3s allow politicians who reduced government revenues by cutting taxes for the wealthy to borrow money for new infrastructure, while hiding the fact they are doing so.” However, that may not happen because “several members of the Public Private Partnerships Task Force are employed by businesses or organizations that have a vested interest in seeing an increase in the use of P3 privatization schemes. These include accounting firms that provide consulting services for P3s, a law firm that does legal work for P3s, and a public agency that has aggressively promoted the use of P3s.”
14) International: In light of chaotic market conditions, the French government is postponing its highly controversial effort to privatize airports operator ADP, which provoked an intense political battle across the country over the past year to trigger a national referendum process. “However, the idea of a government renunciation of this project has been in the air for several weeks, well before the start of the COVID-19 epidemic,” reports Liberation.
Criminal Justice and Immigration
15) National: Advocates are warning that the coronavirus outbreak is endangering prisoners, immigrant detainees and corrections officers in U.S. public and private lockups. “At the Prison Policy Initiative, Peter Wagner and Emily Widra on Friday shared examples of ‘common sense policies’ which could slow the spread of the virus among the prison population, including: Release medically vulnerable and older inmates; Stop charging copays for medical care in prisons; Lower jail admissions; Reduce unnecessary probation and parole meetings; End imprisonment for technical parole and probation violations, such as breaking a curfew or failing a drug test.”
Emily Bazelon, the author of “Charged: The New Movement to Transform American Prosecution. and End Mass Incarceration,” writes in the New York Times that courts and jails are high risk sites for virus transmission and alternatives should be found to deal with low-level offenses. “Jails and prisons, with crowded and sometimes dirty conditions, are known vessels of infection. The extra risk outweighs any benefit from setting bail for defendants accused of nonviolent crimes who can’t post it. Judges can also delay court appearances for misdemeanor defendants.” [See also Peter Wagner and Emily Widra, “No need to wait for pandemics: The public health case for criminal justice reform”].
16) National: A group of U.S. Senators who recently asked the U.S. Bureau of Prisons (BOP) and the three largest private prison operators about the procedures they have in place to manage a potential spread of the coronavirus in federal prisons requested an answer by today. The letter was signed by U.S. Sens. Kamala Harris (D-CA), Elizabeth Warren (D-MA), Tammy Baldwin (D-WI), Richard Blumenthal (D-CT), Cory Booker (D-NJ), Amy Klobuchar (D-MN), Edward Markey (D-MA), Jeff Merkley (D-OR), Bernie Sanders (I-VT), Chris Van Hollen (D-MD), Brian Schatz (D-HI), Sherrod Brown (D-OH), Mazie Hirono (D-HI), Tina Smith (D-MN), and Mark Warner (D-VA). Let’s see if they respond. Both CoreCivic and GEO Group say they are taking steps to respond to the coronavirus outbreak.
17) National/California: The ACLU has asked ICE to release detainees being held at GEO Group’s Mesa Verde immigration detention center because they are vulnerable to coronavirus. “Stephanie Padilla, the ACLU of Southern California staff attorney who helped write the letter, said that while she’d like to be optimistic that ICE’s procedures would be successful, she had her doubts. The letter brings up complaints the ACLU says it has received from Mesa Verde detainees over the past few years alleging shortages of cleaning and personal hygiene supplies. The letter says several people have reported having to obtain hygiene products through the commissary at high cost.”
18) National/Texas: A former prison guard at GEO Group’s East Hidalgo Detention Center has been indicted for bribery. Estrada is the seventh former employee at the facility to have been indicted since November.
19) California/National: The McFarland City Council appointed a new mayor Thursday to replace former Mayor Manuel Cantu. “Cantu quit in February after the city declined a proposal that would allow The GEO Group, Inc. to turn two state prisons into immigration detention centers. GEO has since appealed that decision. Council member Sally Gonzalez was appointed mayor, but most of the residents who attended the meeting were more concerned about the appeals case. ‘I am here because I want to declare once more that the community is against the expansion of a detention center in the city of McFarland. I ask you to be on the right side of the people and the right side of history,’ said Esmeralda Gonzalez, who has lived in McFarland for 30 years.”
20) Florida: Sentencing reduction efforts in the legislature have fizzled. “Bills appeared bottled up in the House Criminal Justice Subcommittee, led by Rep. James Grant, R-Tampa, who has publicly expressed support for the powerful Florida Sheriff’s Association, which generally opposes reducing prison terms or eliminating mandatory minimums for some crimes.” Grant’s campaign supporters include GEO Group, which runs private prisons across the United States.”
21) Pennsylvania: 11 inmates and 23 employees at the GEO Group’s George W. Hill Correctional Facility who were quarantined after exposure to another prison employee who tested positive for COVID-19 have been showing no symptoms of the coronavirus after eight days. “Delaware County Council Chair Brian Zidek said council is actively engaged to gain more information about the incident. ‘The county is working with GEO to better understand what they knew and when they knew it,’ he said, adding that he’s reached out to Gov. Tom Wolf to determine the same of his office.”
Last week GEO Group offered to terminate its contract with Delaware County to run the facility, which is Pennsylvania’s only privatized prison. “In February, the Delaware County Council took its own preliminary step toward ending the contract, voting to commission a study on what was needed to transition it back to a publicly run prison, so GEO’s move falls in line with where the five-member, all-Democrat council has been heading. It was unclear late Tuesday whether the county had retained a firm to begin that study.”
22) Revolving Door News: The White House has hired Chris Cox, a former lobbyist for the GEO Group, as deputy assistant to the president for legislative affairs
23) National: “Privatization May Be Killing Us,” Thom Hartmann reports in Buzzflash. “According to President Obama‘s Ebola Czar (last night on Rachel Maddow‘s show), Ron Klain, Trump ‘privatized’ the testing here in the United States. Instead of taking the World Health Organization (WHO) test kits which are cheap and widely available all over the planet, and having them distributed across the country back in December, or January, or February when we knew this disease was spreading in the United States, Klain said that Trump has outsourced the testing to two big American companies, Quest and LabCorp. Trump’s head of HHS, Alex Azar, is the guy who doubled the price of insulin when he was CEO of Eli Lilly company. Do he and Trump owns stock in these testing companies? Why are we refusing to accept the WHO test that the entire rest of the world is using? What the hell is going on here?”
24) National: “There are no libertarians in a pandemic,” writes the Atlantic’s Peter Nicholas. “You can choose the term: It’s regulated capitalism, or it’s the interventionist state, or it’s democratic socialism,” he quotes Columbia University’s Jean Cohen as saying. “If you want to serve the public good instead of private profit making, you need government to come in and make sure that’s done.”
The coronavirus outbreak has set off renewed debate over the four decade—and continuing—effort by conservatives to hollow out the social service parts of the government they don’t like and privatize the rest. “While we’re at it, let’s admit something more basic,” says Robert Reich. “The system would be failing even under a halfway competent president. The dirty little secret, which will soon become apparent to all, is that there is no real public health system in the United States.”
Massive budget cuts and privatization have left local health systems cut to the bone and facing an onslaught. “Nationwide, local and state health departments have lost nearly a quarter of their work force since 2008, according to the National Association of County and City Health Officials. As the nation’s local and state public health officials confront a pandemic that has paralyzed much of the world, many of them have made their situation plain: They are heading into a crisis without the resources they need.”
Calls to put an end to half measures on healthcare are multiplying.
Donald Cohen of In the Public Interest says “we need a public health approach that’s truly ‘public.’ (…) We need fully resourced public health systems. We need universal health insurance so that no one is left out. We need rules and standards to ensure that everyone who’s sick can afford to miss days of work. We need investments in water infrastructure so that everyone has clean water. And, most of all, we need everyone to pay their fair share for the public goods we all rely on.”
Luke Thibault, an organizer with Democratic Socialists of America’s Medicare for All campaign, says “without Medicare for all, we don’t have the tools we need to stop coronavirus.” He writes, “With unnecessary misery mounting, the crisis could create a new impetus for reform. For decades, mainstream politicians have pushed for more cost-sharing in health care, arguing that free health care would incentivize people to use more services than they needed. Austerity peddlers insisted that we simply could not afford universal health care. Both arguments are collapsing in the face of existential health care needs. Politicians long skeptical of Medicare for All are scrambling to eliminate cost-sharing—and the notion that Medicare for All is a naive, unrealistic dream is vanishing.”
25) National: Public and private ambulance service workers are not receiving sufficient training and equipment to deal with the coronavirus outbreak. EMTs at American Medical Response, a private ambulance contractor with many municipal governments, “are reportedly upset they were not notified they were transporting someone who was possibly infected with coronavirus. AMR reportedly said the patient did not have the virus, now known as COVID-19, but the entire incident is raising questions in the medical community why the county alerted AMR the patient was possibly infected but word never made it to the first responders.”
ProPublica reports that “as the coronavirus spreads in the United States, emergency medical providers are scrambling to keep up, with key direction on how to protect themselves lagging behind the unprecedented threat. It’s yet another example of a fragmented and halting response at the highest levels of government, including getting testing off the groundand ensuring an adequate supply of resources. It took nearly four weeks from the time the World Health Organization announced China’s novel coronavirus outbreak for the U.S. Centers for Disease Control and Prevention to issue guidance for first responders.”
26) National: Journalist Laurie Garrett says “Trump describes the primary advantage of declaring a National State of Emergency over #COVID19 as the ability to deregulate the health sector, waiving rules that govern hospitals, pharma, @US_FDA etc.”
27) National: Cathy Kunkel and Suzanne Gordon take issue with claims the Veterans Administration is not on the road to privatization. “By privatization, we do not mean the immediate sell-off of the VA to some private entity. Privatization involves slow erosion of the VA’s services over time. This is done, by diverting more funding for veterans’ healthcare into private-sector care, leading to a cycle in which the VA is able to provide fewer services and the private sector takes an ever-increasing share.”
28) Virginia: Is Manassas heading for a privatized public library? City Manager Patrick Pate and the city council “are still negotiating with the county about the agreement at the shared Central Library, which expires this summer. According to Pate, the city is prepared to enter into another agreement with the county to build a new library within the city limits or exit the agreement and operate its own library by contracting Library Systems & Services, a private for-profit company that runs libraries on behalf of municipalities. Last month, Manassas Park announced it will leave the Central Library agreement and operate its own library with the company. ‘The budget contemplates the funding to do either of those options,’ Pate said.”
29) International: Writing in Common Dreams, Linda McQuaig tells the story of a once highly successful public pharmaceutical company that was privatized. “Fuller argues that if a publicly owned Connaught were still operating today, it could be contributing to the development of the coronavirus vaccine — and ensuring a Canadian supply if there was a global shortage. Yet, tragically it isn’t. Succumbing to corporate pressure and a misguided belief that the private sector always does things better, Brian Mulroney’s Progressive Conservative government privatized Connaught Labs in the 1980s. Today, what remains of this once-dazzling Canadian public enterprise has been taken over by a giant French pharmaceutical company.”
30) International: Due to the economic and financial disruptions caused by the coronavirus outbreak, Brazil’s massive privatization program, introduced by right wing President Jair Bolsonaro, has been upended.
Governing for the Common Good
31) International: Following years of a massive combined effort by public health agencies, the nonprofit sector and the private sector, the last Ebola patient has been released from the hospital