Weekly privatization report: The ACA’s public-private liability, and more.

Here’s our weekly analysis of privatization in the news and in communities nationwide. Not a subscriber? Sign up here.

1) National: A conservative Texas federal district court judge has struck down the Affordable Care Act, the public-private system that has brought healthcare to millions of Americans. While the ruling may be struck down on appeal because of its faulty reasoning, its problems, argues Ezra Klein, have flowed from its public-private conception: “The basic idea behind Obamacare was that a public-private system based on Mitt Romney’s Massachusetts reforms would command some Republican support, or at least acceptance, and thus be easier to pass and to expand. Republicans have proven that theory wrong. Instead, the private-public construction of Obamacare has given opportunistic Republicans their most effective attacks on the bill. Those attacks have been legal, like this assault on the regulations governing private insurance purchase, and political, like the attacks on high deductibles and complex shopping schemes.”

2) NationalTrump’s hand-picked committee wants to privatize your mailbox. “The Postal Service could capitalize on a ‘highly valuable’ asset by selling mailbox access to companies such as FedEx Corp. and United Parcel Service Inc., the administration said in a report last week.” Mark Dimondstein, president of the American Postal Workers Union, said “expanding access beyond postal workers could require residents to give up a certain amount of privacy. ‘I don’t think the customers would take kindly to anybody being able to open that mailbox and put something else in there.’” [Sub required]

3) National: Jeremy Mohler of In the Public Interest points out that the disruption and chaos that charter school closures bring to students, parents and communities, is a feature not a bug of school privatization. “Disruption is exactly what the likes of DeVos, Zuckerberg, and Gates want. They want public education to be like a marketplace, where private boards can decide whether they listen to parents or not, large corporate-like chains like KIPP and Rocketship dominate, and schools open and close overnight in a constant churn of ‘innovation.’”

4) National: Washington Post education reporter Valerie Strauss posts a piece by Carol Burris, a former New York high school principal and now executive director of the Network for Public Education, asking “Can charter schools be reformed? Should they be?” Burris writes, “We are therefore left with two very important questions. Can charter schools be seamlessly folded into the public school system while remaining privately governed? Should the charter sector continue to grow through government subsidies, even as demand for new charters has waned? The answer is a resounding ‘no.’ Here are five reasons.”

5) National: Boston Globe columnist Renée Loth raises concerns about the privatization of social welfare by turning it over to mega-billionaires rather than having it administered by elected officials subject to democratic accountability. “The truth is, even huge donations can’t replace broad-based public investments in social welfare,” she writes. “Maybe if our society were organized differently—if CEOs did not earn 312 times the mean employee pay in their own companies; if we did not exempt the first $7 million in inherited wealth from any tax at all; if real wages for 80 percent of American workers weren’t stagnant for the past 30 years—we’d have a real opportunity society. Maybe we wouldn’t need the Bezos billions to make sure everyone could afford a home.”  Beyond that, Loth points to a more fundamental solution—living wages rather than charity. “It’s positively Scrooge-ian to begrudge such largesse. But you have to wonder if this latest symptom of economic inequality isn’t privatizing the social compact, and if the wealth amassed through corporate tax cuts, stock buybacks, and the like wouldn’t be more beneficial if it were spread around, say, as wages.”

6) National: At an investor briefing, Mark McDonough, President of American Water’s Military Services Group, laid out some details on how their “utilities privatization” business works, and how its key elements secure long-term profits for the company. “One of which is that 50-year service contract because what that does is it really creates a partnership between the utility provider in American Water and the installation. We’re not an average defense contractor with a 50-year contract. As I said, they don’t exist in any other part of the federal government. And what we like to think of is that, that partnership, that relationship is really akin to the relationship that our regulated operating companies have with their municipalities. If you’ve never been on the military installation, they’re really like little cities. And we operate them much in the same way that we operate with our regulated footprint. So that’s one of the reasons, we think.” [Investor Day presentation transcript, December 11, 2018; sub required; see also their 69-slide investor presentation]

7) National: The New York Times asks Is an All Charter School System Really the Way to Go? “Even so, the district as a whole this year maintained a C letter grade in the state’s annual school performance scores. Likewise, only 29 percent of New Orleans students are achieving a ‘Mastery’ rating or above on state assessments in English language arts and math combined.”

8) Arizona: Azcentral has published the third in its series of articles on charter schools in the state, this one on the role of money. “This was like the Oklahoma Land Rush,” Ruiz remembered. “The charter model is just like Walmart, but do we want our schools to be run like that?” asked Cardine, a former charter school executive. “That’s the big picture, and that’s what is wrong with charter schools.”

9) California: Protesters showed up at a Los Angeles school board meeting last week in support of teachers and their union, “which has been negotiating for more than 1½ years with the Los Angeles Unified School District and its new superintendent, Austin Beutner. (…) Beutner, a former investment banker, is working on a major plan to restructure the district into 32 ‘networks,’ a proposal that includes slashing the resources of the central office, according to an L.A. Times story. Critics have charged that he is seeking to bust the teachers union and privatize the district by moving toward the ‘portfolio’ model, which turns traditional school districts into collections of individuals schools that are run separately.” The district goes on holiday recess today and doesn’t reopen until Jan. 7—“unless, that is, the teachers decide to call their strike then.”

10) Colorado: The state’s congressional delegation has written a letter to federal and local officials urging all parties in the Denver Eagle P3 dispute to resolve their differences in a cooperative manner before Saturday’s deadline. The dispute is over ongoing issues with grade crossings on the Eagle Project’s commuter rail lines. It is unclear if the parties have made any progress. 

11) Florida: Anger grows after governor-elect Ron DeSantis (R) says he wants to appoint former Florida House Speaker Richard Corcoran as the state’s next Education Commissioner. “Angry tweets with the hashtag ‘#StopCorcoran’ started populating timelines. Fedrick Ingram, the newly elected president of the Florida Education Association, a statewide federation of teacher and education workers’ labor unions with more than 140,000 members, came out strongly against the pick, calling Corcoran a ‘Betsy DeVos clone.’ (…) Critics of the pick also include Michelle Dillon, president of the St. Johns Education Association, a local teacher’s union. She said Corcoran — whose wife runs a charter school in Pasco County — has conflicted interest, little to no experience in education and has supported charter schools at the expense of public education.”

12) Georgia: The private, for-profit ambulance service AMR is being kept on a tight leash by DeKalb County elected officials, and its performance seems to have improved under its temporary six-month contract extension. Dunwoody officials had raised concerns with DeKalb over AMR’s performance, and were threatening to break off and run their own service. “The DeKalb Board of Commissioners voted Dec. 11 to extend DeKalb Fire Rescue’s contract with American Medical Response until June 30, 2019. AMR’s five-year contract with the county was set to expire Dec. 31. The extension is needed as county officials continue to work with a consultant on writing a new request for proposal and bid process that is expected to be completed by March.”

13) Georgia/National: Writing in Capital & Main and Fast Company, Robin Urevich asks Why Does CoreCivic Want a Detainee’s Death Report Kept Sealed? “Ginny Davis, the [Georgia Bureau of Investigation’s] deputy director of the office of privacy and compliance, told Capital & Main that Stephen Curry, an attorney for CoreCivic, the private prison company that operates Stewart under contract with U.S. Immigration and Customs Enforcement, recently alerted her to a federal regulation which, he said, prohibits states and local governments from disclosing information about federal detainees. ‘He said you can’t disclose any of this under open records,’ Davis said. ‘It was a warning letter.’ The GBI consulted with the Georgia attorney general’s office and decided against disclosure, Davis said. Curry, who represents CoreCivic, did not return a call for comment.”

14) Idaho: The state Board of Correction has extended its $46 million-plus a year contract with Corizon Health for inmate health care for another two years, but is immediately launching a process to take the contract out to bid at the end of the two-year extension. “‘There were lots of hesitations, let’s put it that way,’ said Debbie Field, board chairwoman, ‘because the contract ends the 31st of this month. We talked about can we do a one-year extension.’ But even a full year wouldn’t allow sufficient time to develop a new request for proposals and go through the bidding and selection process, she said. ‘So we realized, OK, we will extend, but we will start the RFP process immediately.’”

15) Illinois/NationalIn a major victory for teachers, the charter school strike in Chicago has been settled. Martin Levine, writing in Nonprofit Quarterly, says this offers a key lesson:  “By going on strike, the teachers of Chicago’s 15-school Acero network took a step once limited to traditional public schools and began a new era for the nation’s growing charter school sector. When, after a week of walking the picket lines, they settled with the network’s management on very favorable terms, their union may have neatly helped to eradicate one of the arguments for charters in the first place—that is, the ability to work outside the strong influence of the greatly maligned teachers’ unions.” 

16) Illinois: Will the change to a Democratic governor free up a long-discussed new airport south of Chicago? “One of the top items on the to-do list for the airport is to secure a developer for a public-private partnership, said Rick Bryant, senior advisor to U.S. Rep. Robin Kelly, D-Matteson.  (…) In the old days, public entities would typically fund runways, roads, parking lots and other infrastructure and airlines would finance construction of passenger terminals, he said. Now, it’s more likely for a public entity to own terminals and operate common-use gates used by more than one airline. ‘Now public-private partnerships build terminals and runways and recoup their costs through fees,’ Bryant said.”

17) Maryland: Gov. Larry Hogan’s (R) plan for an $9-11 billion toll-supported ‘public-private partnership’ project to widen I-495 and I-270, two critical arteries in the DC area, moves forward as the state Department of Transportation holds an industry forum. According to the industry forum presentation, the Maryland Board of Public Works expects (slide 53) to announce the P3 designation in February 2019, to release the Request for Qualifications in April 2019, to announce the shortlisted teams in the second quarter of next year, and to release the final Request for Proposals in the first quarter of 2020, aiming for a financial close in the last quarter of 2020. This Wednesday, the BPW (chaired by Hogan) is scheduled to discuss a first-phase “$90 million, five-year contract with Maryland Traffic Relief Partners to oversee engineering, planning, final design and construction of expansions to I-270 and portions of I-495 that run through Maryland.” [Sub required]

But public opposition is stiffening over the costs of the proposed project, the decision to use a P3 model, its impact on neighborhoods and the environment, the inclusion of “compensation events” in the deal and other issues. Citizens Against Beltway Expansion has produced a series of downloads setting out their analyses and objections. In response to a recent pro-expansion editorial by the Washington Post, Myles Boylan of Silver Spring wrote that “the focus should first and foremost be on the viability of the proposed public-private partnership. Citizens Against Beltway Expansion has done an economic analysis indicating that a $9 billion investment in four additional lanes will fall short of yielding adequate toll revenue for a $9 billion investment even if tolls are in the $40-per-trip range. Data from the U.S. history of public-private partnerships for road expansion projects is another cause for concern, because they have often required additional sweeteners from the states after the initial contracts were signed. In this regard, we think the total cost of the governor’s plan would be far above $9 billion.”

18) Missouri: The 8th U.S. Circuit Court of Appeals has granted class status to Missouri prisoners who allege the state and Corizon failed to adequately screen and treat their chronic Hepatitis C. “At least half of those who suffer from chronic HCV will develop either cirrhosis or liver cancer, and every day without treatment increases the risk that an infection will develop into a serious condition, Erickson wrote in the opinion. New treatments exist, however, which are estimated to cure more than 90 percent of patients who receive them as a treatment.” [Missouri Lawyers Media, December 17, 2018]

19) North Carolina: The Global Achievers charter school will be closing by the end of this month. “Alexis Schauss, director of school business for the state Department of Public Instruction, said the school had been receiving its allotment in monthly installments rather than as lump funds because of concerns over its financial state. ‘For this school, they were placed on disciplinary financial non-compliance status in the fall, and schools that are on this status receive the state funding in monthly installments,’ Schauss said.”

20) OhioA downtown Toledo charter school is in danger of being shut down by the state. “Last month, the Ohio Department of Education sent the school a letter saying that because of poor academic performance they are subject to automatic closure. The state cites an ‘F’ on performance index and a ‘D’ or ‘F’ on gap closing.” 

21) Pennsylvania: A proposal by the Carlisle school district to outsource the jobs of school staff will “put a serious crimp on the paychecks of the remaining instructional aides” employed by the Carlisle Area School District. Melody Fountain, “a library aide for eight years, told the board ‘outsourcing will significantly impact the compensation to this critical portion of the district workforce. While some [aides] may see a small increase in their hourly wage, most will take a direct hourly pay cut.’ By her calculations, the switch-over from the district health care plan to the insurance provided by the contractor would cost each aide $144 a month for individual medical, vision and dental coverage and almost $479 a month for family coverage. ‘With the increased cost of health care benefits, Carlisle aides will be working for significantly less overall compensation,’ Fountain said. ‘The low hourly wage that the staff currently works for is offset by the benefits the district offers us. It is that portion of the compensation that allows many of us to continue working for the district and to support ourselves and our families.’ The proposed changeover would also impact paid leave, Fountain said. Aides now receive 10 to 15 days of leave per school year that roll over if not used. By contrast, an ESS employee could earn five days of ‘use it or lose it’ leave after the first 90 days of school, Fountain said.”

22) Pennsylvania: After almost a year of negotiations, faculty and staff of the New Foundations Charter School have joined the Alliance of Charter School Employees, Local 6056 of the American Federation of Teachers Pennsylvania. “ACSE represents teachers in three Philadelphia schools — West Oak Lane, Olney and New Foundations charter schools. ‘Two years of hard work was worth every second,’ Jim Schmidt, a New Foundations math and engineering teacher, said in a statement. ‘A great school got even better.’”

23) Texas: The Longview News-Journal says the Longview school district has questions to answer on its proposal “to team with the charter school network known as East Texas Advanced Academies to manage more than half the district’s campuses.” Citing the newness of the system in Texas, the editors say “this may not exactly fit the definition of a ‘beta test,” but it isn’t far off. No one in the state has much of an idea how this will eventually work. It might be great, or Longview ISD might find that it is not workable. That makes it a gamble that might be fine for those with no children on the affected campuses, but we’re guessing parents are not so thrilled. Another major concern is the leadership team for East Texas Advanced Academies. One of the founders of the network is Adrain Johnson, superintendent of Hearne ISD. That district received an ‘F’ grade for accountability for the 2017-2018 school year.”

24) WashingtonSeattle EMTs have voted to strike later this month unless they can reach agreement with their private, for profit employers American Medical Response (AMR). “Without a contract by noon on December 21, all union AMR employees plan to drop everything they’re doing, return their ambulances to their stations, and go home. The only exception, they say, would be if they were transporting a patient with life-threatening injuries. The union says wages start around $15 an hour. In its latest offer, AMR offered to bump that to $17 an hour. The union argued that rate was barely over minimum wage and not enough to live on in Seattle.” The EMTs are represented by Teamsters Local 763which says “AMR and Teamsters 763 have been in bargaining since January 2018. [Liz Brown, a business agent with Local 763] said the main issues in dispute are a livable wage and affordable health care. The starting wage for employees at AMR is $15.54 per hour, just above Seattle’s minimum wage. The corporation’s contract offer would force the employees to pay much more for their health insurance.” 

25) International: Prem Sikka, a professor of accounting at the University of Sheffield and emeritus professor of accounting at the University of Essex, says we need to avoid more auditing disasters such as the one that crippled the British outsourcing giant Carillion. Commenting on a 171-page report released last week, Prof. Sikka highlights “a requirement that auditors of large companies must act exclusively as auditors—i.e. their only business should be to provide audits. They would not be permitted to sell any consultancy service to audit clients, creating a conflict of interest. That means the firms will need to be restructured. To free auditors from fee dependency on companies and their directors, the report recommends that auditors be appointed and remunerated by an independent body.” The report, commissioned by the Labour Party Shadow Chancellor John McDonnell and conducted independently by Prof. Sikka and others, calls for a series of major reforms of the auditing industry.

26) Think Tanks: Writing in Counterpunch, Ron Jacobs has taken aim at a pro-privatization “propagandist,” Alexander Markovsky of Los Angeles-based Litwin Management, for promoting the privatization of public infrastructure and assets. “Those like Markovsky who believe that the privatization of public assets will solve both the problem of failing infrastructure and the problem of crumbling capitalism have it backward. Historically, it is the government that bails out capitalists, not the other way around,” writes Jacobs.

Legislative Issues

1) National: In an informative interview, incoming House Transportation and Infrastructure Committee chair Peter DeFazio (D-OR) provided an overview of what will likely happen on an infrastructure package in the coming year. “‘I’m hopeful that we can get a package together in the first months of this Congress,’ DeFazio told Hill.TV’s Krystal Ball, referring to the 116th Congress. ‘Hopefully get it done in the first sixth months because then you’re really getting into…the presidential election. So if we can move a good package out of the House, expeditiously, I think the Senate is going to be hard-pressed not to follow on.’” DeFazio said a potentially successful deal would include some real federal money, improve transit options and help the U.S. control carbon emissions. He was also critical of the so-called “asset recycling” approach floated by Republicans last year. [Video, about 12 minutes] . 

2) National: A contentious floor fight over the criminal justice reform bill is finally set to hit the Senate floor today, after apparent pressure from the White House and especially Jared Kushner, shook the bill loose from Majority Leader Mitch McConnell’s deadly grip. “GOP leaders, backed by the administration, are pushing forward as they try to get the bill across the floor with only days left until the end of the session and a stalemated shutdown fight looming at the end of next week.” McConnell has teed up a test vote for today. If the bill gets more than 60 votes “leadership thinks the bill could be wrapped up as late as Wednesday by allowing opponents the opportunity to have amendments considered to the measure. “My impression is that people are not going to string this out unnecessarily for procedural reasons as long as they get an opportunity to make their arguments and have a vote on their amendment,” said Senate Majority Whip John Cornyn.” 

Mark Holden of Koch Freedom Partners spoke with NPR’s Michel Martin yesterday about why his group supports the bill. GEO Group and CoreCivic are also backing the bill. “It could be good for business,” says Steve Contorno of the Tampa Bay Times. But Sen. Tom Cotton (R-AR) has proposed an amendment that some say could kill the bill.

3) National: New York Senator Kirsten Gillibrand (D) says cash bail should be eliminated, and says a No Cash Bail Act will be among the first bills introduced in the new Congress. 

4) National: Noted economist and former labor secretary Robert Reich says “Stay vigilant! Before Republicans leave Congress they’re going to try to privatize even more government services, padding the profits of their wealthy donors in corporate America on their way out the door. Know the truth about so-called privatization.” According to Reich, “the question should be what’s best for the public?” (Video, about 4 minutes).

5) NationalSenate Democrats have again successfully blocked a pro-privatization nominee to head the NOAA. “Barry Lee Myers, the chief executive of AccuWeather, a private forecasting firm that relies largely on data from the agency’s National Weather Service, has been a controversial figure since President Trump first nominated him to lead the agency in October 2017. Democrats have said that Mr. Myers has significant conflicts of interest, including his past eagerness to privatize the National Weather Service. For several years, Mr. Myers fought government programs that would compete with AccuWeather services.” It’s unclear if Trump will put his name forward for a third time.

6) NationalA strong defender of the Veterans Administration, Rep. Mark Takano (D-Riverside), is expected to chair of the House Committee on Veterans Affairs. Current VA Secretary Robert Wilkie is under fire “for a 1995 speech in which he reportedly praised Jefferson Davis, who presided over the Confederacy during the Civil War, as a ‘martyr to “the Lost Cause”’ and ‘an exceptional man in an exceptional age.’ In August, the journalism nonprofit ProPublica reported a trio of Trump allies known as ‘the Mar-a-Lago crowd’ was influencing VA policy. The trio, none of whom served in the military or worked in government, ordered the start of new programs and required VA officials to go to Mar-a-Lago to see them at taxpayer expense, ProPublica found.”

7) National: Rachel Marshall, the federal policy counsel for the Campaign for Youth Justice, has put together a rundown of how the midterm elections affected criminal justice policy at the state and local level.

8) National/District of Columbia: Elected leaders and community activists in DC are accusing the Republican Congress and the Trump administration of riding roughshod over the public’s wishes on their plan to put financing for a rebuilt stadium for Washington’s NFL team, owned by controversial Trump-backer Daniel Snyder, into the massive budget authorization now before Congress. “Helping a billionaire build a new NFL stadium, I just think is a bad idea,” said D.C. Council member Charles Allen. “Allen represents Ward 6, which includes the old stadium site. Allen said Monday that he is not all that surprised by the recent Washington Post report that Snyder is working with congressional Republicans and the Trump administration to include language in the latest federal spending bill, that would help open the way for a new stadium in the District. “Greasing the skids so that there’s going to be an NFL stadium at the RFK site, I just think is the wrong decision,” Allen said Monday in an interview with WTOP, noting he plans to fight it, if the effort moves forward.” Allen wrote on Twitter, “Trump & GOP helping Dan Snyder build a new stadium at RFK? Every dollar & square foot we put into a stadium, parking lots, & oceans of asphalt is one that we’re not putting into affordable housing or local businesses or parks and green spaces. #HailNo.” For more listen to Dave Zirin on WPFW’s “The Collision” (at 19:20).

9) CaliforniaDemocratic Assemblyman Marc Levine (of the North San Francisco Bay Area) took the heat on Friday over his support for charter schools. “‘This morning I looked through your donor list, which includes the California Charter Schools Association (CCSA),’ Goldman said. ‘You have consistently voted in accordance with CCSA and organizations trying to privatize education, which is what your constituents do not want.’ Heather Bennett, a member of Stand with Ross Valley Schools, also singled out Levine. ‘We have written repeatedly to your offices and sent almost 500 letters recently through the Action Network urging you to pressure the California Department of Education to immediately require complete material revision of the Ross Valley Charter petition,’ Bennett told Levine. ‘This charter is damaging our public school district.’”