Weekly privatization report: The positives of insourcing | The true cost of charter schools | and more

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

THIS WEEK’S HIGHLIGHTS

  • We’ve published a new research brief on the positives of bringing critical government functions back under public control.
  • As Nashville backs away from a parking privatization scheme, Louisville may move ahead with a $750,000 study
  • California’s West Contra Costa Unified School District is losing nearly $1,000 per student as a result of rising charter school enrollments.

EDUCATION

1) National: EdSource reports that In the Public Interest’s new study estimates West Contra Costa Unified School District is losing nearly $1,000 per student as a result of rising charter school enrollments. “The funding calculations in the In the Public Interest reports use an approach developed by Gordon Lafer, a professor in the Labor Education and Research Center at the University of Oregon. The report calculated the difference between the revenues West Contra Costa Unified would have received in state and federal funding for students who have enrolled in charter schools and subtracting the amount it would have had to spend directly on the students in the form of books, supplies, teachers and other staff. What was left was $27.9 million, the portion of the funds that the district could have used to pay for a range of more centralized services provided to all students, the report argues.” 

2) National: The May issue of the Network for Public Education’s charter school scandal chronicle is out and it has 44 entries for just that month alone. In terms of dollar amount, the worst is a report that “up to $1 billion of the money given out nationwide by the [the U.S. Department of Education’s Charter Schools Program (CSP)] was wasted on charter schools that never opened, or opened and then closed because of fraud, poor performance, financial mismanagement, and other reasons.”

3) National: Writing in The Progressive, Carol Burris and Yohuru Williams assess the various positions on charter schools of the Democratic presidential candidates. “There are more than twenty Democratic candidates who believe they are the best choice for President. Bernie Sanders’s comprehensive plan for public education has raised the bar. It is now time for the rest of the candidates to tell the millions of public school teachers and parents where they stand on charters and vouchers, school integration, federal funding of charters, and their support for true public schools.” 

4) NationalWriting on Common Dreams, activist and author Rebecca Solnit challenges what she says are inaccurate implications about Elizabeth Warren’s position on charter schools, mentioning Gadfly on the Wall blogger Steven Singer and education historian and public schools advocate Diane Ravitch. Singer has responded with a title correction, and Ravitch says regarding Warren, “the important question is whether she will release a statement expressing her views about K-12 education. Does she support the NAACP call for a moratorium on new charters? Will she demand the elimination of the $440 million Federal Charter Schools Program, aka DeVos Slush Fund? Where does she stand on federal testing mandate?” Carol Burris says “what progressives need to hear from Elizabeth Warren is the answer to these two simple questions. 1. Do you support the NAACP’s charter moratorium? 2. Do you support funding the federal Charter Schools Program–which funds the expansion of non-profit charter schools?” Ravitch and Burris have set out their position in an op-ed in the NY Daily News.

5) California: The Charter School Task Force commissioned by Gov. Newsom (D) and led by Superintendent of Public Instruction Tony Thurmond has issued its recommendations, which “reiterate the need for accountability and changes to the laws authorizing and operating California’s charter schools. The report recommendations reflect the intent of bills currently being considered by California lawmakers. The majority of the body charged with considering the economic impact of charter schools on neighborhood public schools and recommending policy proposals heard and acknowledged the concerns and hardships posed on California’s students.” [California Charter School Policy Task Force Report

6) Connecticut: The Connecticut Mirror reports that “angered by a provision that will exempt from open meeting laws the board overseeing a $200 million public-private partnership to improve CT’s schools, Sen. @MaeFlexer launched an effort to undo that language in the waning hours of the session.” The ‘public-private partnership’ is funded by a grant from hedge fund billionaire Ray Dalio and his wife Barbara Dalio. Flexer said “I think it’s outrageous that the language in the budget made it so there’s no ethical or Freedom of Information oversight of that money. I think it sets a bad precedent and I think that if a private person or a private entity wants to give money for a public purpose, it should be subject to our state ethics laws and our Freedom of Information laws.” 

7 )Illinois: In a story about “lawmakers’ pork-barrel frenzy,” The Chicago Tribune reports House speaker Mike Madigan (D) supported a $31 million state grant to a Southwest Side charter school because it is headed by a “reputable group and they have a site.” At the same time, lawmakers ended the State Charter School Commission by July 2020 but retained private-school scholarships

8) Massachusetts: AFSCME Local 262 school custodians in Saugus are thanking people who supported a petition drive to get a special Town Meeting to discuss outsourcing. “We feel it is of great importance that the issue of potential privatization of the school custodial services be given the forum it deserves in public session,” they said. “With the taxpayer investment for the new school complex moving forward, we strongly believe we are the best and most invested group to maintain the new and all schools in Saugus.”

9) South Carolina: The Florence School District One school board has approved a controversial food service management contract. “Although district officials have repeatedly reassured employees their jobs aren’t in jeopardy, James William, who spoke on behalf of the group, said that doesn’t make them less worried. ‘Our food service workers have been employed for years and years and years and no other administration had any real problem with them and we don’t believe that this superintendent has probably been here long enough to have found the kind of problems that would facilitate the kind of changes that’s he’s recommending,’ Williams said.” 

10) West Virginia:Teachers have kept on fighting as lawmakers debate charter schools and vouchers. “It is clear that the West Virginia Senate has not budged an inch since, back in February, it passed a bill including charter schools and a form of vouchers. West Virginia Public Broadcasting’s Dave Mistich reminds us that the House, which blocked the original Senate bill will soon be back in session to reconsider what its members rejected just a couple of months ago: ‘Both the omnibus reform measure and the education savings accounts bill now head to the House of Delegates, which is scheduled to reconvene June 17.’”

11) International: Edmonton, Canada, public school trustee Michael Janz is calling for an emergency debate into changes to the Education Act introduced by the United Conservative government. The bill lifts a cap on specialized charter schools. “Fully-funded private schools are a form of taxation without representation, Janz said. ‘I’m very, very concerned that some of these changes are implementing an American-style, risky, ideological agenda with increased privatization and segregation,’ Janz said.” 

INFRASTRUCTURE

12) National: Food & Water Watch has released a first of its kind report on “the emerging fracked gas infrastructure buildout that is symbiotically driving, and being driven by, a new fracking boom in America.” The report calls for an end to eminent domain for private gain. “Refusing shaky interpretations of the ‘public interest’ that include private plunder via state power would undermine the economic basis for dangerous pipeline and export infrastructure.”

13) National: Preqin has published an interview with Associate Investment Manager for Private Equity at CalPERS Liliya Kamalova on the pension fund’s Environmental, Social and Corporate Governance (ESG) strategy. “A manager’s ESG policy, or lack thereof, will not exclude a proposal from moving forwards to the formal diligence process; rather, it will be considered in the context of evaluating all relevant investment parameters,” she says. Naked Capitalism’s Yves Smith, a longtime critic of CalPERS, has written “CalPERS keeps fetishizing the importance of prospective partners sharing CalPERS’ ESG goals. Anyone who is anti-transparency isn’t credible as being a supporter of good governance, the ‘G’ in ESG.”

14) Kentucky: As Nashville backs away from a parking privatization scheme, Louisville may move ahead with a $750,000 study. “The newly created ad hoc committee on efficiencies, chaired by Councilman David Yates, D-26, has focused on the possibility of privatizing the city’s parking assets managed through PARC as a way to immediately infuse Metro Government’s coffers with tens of millions of dollars. (…) However, the [Mayor Greg Fischer] administration has expressed skepticism toward the idea of a parking P3, asserting that doing so with PARC’s assets would hurt the city’s ability to attract new businesses and may require the council to approve additional tax incentives or expenditures for development projects to build their own garages. Additionally, some cities like Chicago have regretted entering into such deals after projections turned out to be off-base, while others like Cincinnati—and now Nashville—considered privatization and opted to pass.

15) Maryland: By a narrow 2-1 vote, the state Board of Public Works has approved Gov. Hogan’s (R) plan to widen two congested highways using a ‘public-private partnership.’ During a tense meeting during which Hogan limited comments to 60 seconds, political horse-trading took over and Hogan slightly amended his plan to gain support. Opposition to the P3 plan was led by State Treasurer Nancy K. Kopp (D) and Joshua Tulkin, Maryland director of the Sierra Club. 

Tulkin “said the organization was ‘greatly disappointed’ that the project is advancing, but expressed some hope that activists would continue to be able to put pressure on state officials. ‘In the past year we have seen thousands of people become active, concerned for how highway expansion will impact their communities and the climate,’ he said. ‘While we did not win the vote today, it is clear that Governor Hogan and Peter Franchot recognized the powerful movement growing in opposition, and we will only continue to grow as more details of this plan emerge.’” Tulkin says “they are pursuing a project with a bunch of fundamental flaws, and it’s going to fall apart at some point.”

Kopp, who voted against the proposal, “said she was ‘very troubled’ that the board was asked to vote on changes that hadn’t been put in writing. Asked about several aspects of the revised plan, Kopp repeatedly said, ‘It’s not clear.’ ‘I think there’s just a tremendous amount of confusion, and insufficient hard information,’ she added.” Tulkin added, “I’ve dedicated my life to fighting greenhouse gas pollution in Maryland. I know what I am talking about. If you are gonna come at me claiming that adding more highway lanes is ‘good for the climate,’ you had better come with hard data.”

16) Missouri: Weakening the case for privatizing St. Louis Lambert International Airport, both Standard & Poor’s and Moody’s have given a strong vote of approval to the airport’s credit standing. S&P raised the airport’s revenue bond rating to A from A- due to an improved financial risk profile, and said it “has strong origin and destination demand, an extremely strong economic profile, and ‘a very strong management team.’” Moody’s weighed in with an affirmation of Lambert’s A2 rating with a stable outlook, citing improved debt service coverage metrics and lower cost per enplanement (CPE)

But the private sector is still after those revenues.

17) Missouri: St. Louis Post-Dispatch columnist Tony Messenger says a top adviser on the Lambert International Airport privatization effort faces questions over his association with the National Rifle Association (NRA) and other right wing organizations. “According to city records,” Messenger says, “McKenna’s firm has been paid more than $1.2 million so far for his advice. So what is his expertise? He is a Republican fundraiser who specializes in dark money. McKenna raises money for the National Rifle Association. He raises money for anti-worker organizations run by Rick Berman, the notorious pioneer of fake grassroots efforts. He has worked for Karl Rove’s Crossroads GPS and the American Future Fund, two of the biggest GOP dark money campaign committees. This is the man whom Mayor Lyda Krewson and Board of Aldermen President Lewis Reed—both pro-labor, pro-gun-control Democrats—are depending on to give the city valuable advice on the future of its airport. What Krewson and Reed might want to know is that at least one of McKenna’s clients have questions about his invoices.”

18) New JerseyEdison residents have delivered a petition opposing privatization of their water system to Suez; the deal would be financed by private equity firm KKR. The petition drive was assisted by Food & Water Watch. “Citizens launched a petition drive to demand Edison keep control and management of those systems. If not, they demand the issue go to a public vote in September. Organizers walked the petitions into the municipal building and delivered them to the city clerk. The campaign collected nearly 5,000 signatures, way above the goal of 4,000. The organizers call the lease deal suspicious. ‘This process all started a few months ago when we found out after three years of negotiating the mayor finally disclosed that they were going to try to privatize our sewer and water,’ said petition organizer Keith Hahn. (…) The clerk has 20 days to certify the petition signatures of mostly registered voters and then the council must act. That could include putting the issue on the ballot.” [Video; about 3 minutes]

19) InternationalWhy does it matter who owns our infrastructure? “This short video clip outlines how privatization crippled the town of Churchill when the Hudson Bay Line was washed out and the Port was abandoned. The private U.S. company Omnitrax refused to fix the tracks and pulled out of port operation for nearly two years. The good news is that the train has returned to Churchill and the outlook for the future of the port is brighter than it has been for the last few years! This Churchill Summer season should be quite the refreshing breath of fresh air for the people of Churchill!”

20) International: Toronto Star contributing columnist Linda McQuaig says pro-privatization Ontario Premier Doug Ford should cancel the privatization of Highway 407. “It’s hard to overstate just how bad a deal Mike Harris made in 1999 when he sold the rights to charge tolls on the 407 for almost a century for a mere $3.1 billion. Today that highway, which was designed to relieve traffic congestion in the heavily travelled corridor around Toronto, is worth an estimated $30 billion. An analyst with the National Bank has described it as a ‘revenue-generating monster.’ Grupo Ferrovial was selected after a bidding process but, in negotiating the terms of the deal, the zealously pro-privatization Harris government failed to impose any limit on how high the company could raise tolls on this crucial roadway.”

21) Think tanks: The Congressional Research Service has published a brief paper with basic useful information on the federal public transportation program. It covers What Is Public Transportation?  Funding the Federal Transportation Program. How Are Federal Dollars Spent? and the Program Structure. Also still useful is CRS’ 2017 paper, “Privatization and the Constitution: Selected Legal Issues.”

CRIMINAL JUSTICE AND IMMIGRATION

22) National/Revolving door news: Sen. Elizabeth Warren (D-MA) and Rep. Pramila Jayapal (D-WA) have written a letter to Jim Van Dusen, “the CEO of Caliburn International, which recently hired former Gen. John Kelly, who ran President Donald Trump’s Department of Homeland Security until January 2, 2019, and later became White House chief of staff. (…) In their letter to Van Dusen, Warren and Jayapal delivered a blistering assessment of Kelly’s time in the administration and questioned his role in the company. ‘General Kelly’s role in promoting and helping execute these cruel immigration policies remains a stain on his decades of public service,’ the lawmakers wrote. ‘It is outrageous that he now appears to be cashing in on those same policies as a board member for the company that benefitted from his actions as a government official.’”

23) NationalTwenty-four immigrants have died in ICE custody during the Trump administration, according to NBC. “Aurora recently expanded to hold more than 1,500 immigrants for ICE. Problems there persist, said Obser of the Women’s Refugee Commission, who visited the facility this April. Obser said detainees interviewed said that medical staff were ‘unresponsive to requests for medical care.’ A spokesperson from GEO Group, the private contractor that operates the Aurora facility, declined to answer questions about Samimi’s case. But the spokesperson said that the company has taken measures to correct facility-wide issues identified in a recently-released inspector general report, which included charges of delays in medical care.”

24) National: Adding to the misery of immigrant detainees and asylum seekers, ICE is now struggling with a spreading outbreak of mumps in its detention centers. “Adelanto is one of multiple ICE detention facilities run by a private prison company. The US government pays hundreds of millions a year to the GEO Group and CoreCivic to detain migrants, making the system even less transparent. Quartz reached out to GEO and CoreCivic for comment but both companies referred all questions to ICE. (…) The detainee population has climbed from 39,000 at the end of 2015 to a record 52,000 in May. The growing numbers are the result of the Trump administration’s zero tolerance policy, which forces asylum-seekers into detention.” 

25) National/Texas: GEO Group’s contract with U.S. Immigration and Customs Enforcement for the Montgomery Processing Center in Conroe, TX, is expanding by 314 bedsto 1,314 beds. 

26) NationalCoreCivic is on a hiring spree due to Trump’s crackdown of immigrants and asy6lunm seekers. “Lately, the company is on a bit of a hiring tear, with job openings up more than 200% since April 2019. In April, CoreCivic was hiring for 218 positions; as of this week, it has 468 openings listed on its careers site. The largest concentration of those openings include 47 openings at CoreCivic’s Eloy Detention Center in Arizona.”

27) National: “Kids for cash” judge loses his appeal in federal court. “Ciavarella, 69, along with former county judge Michael Conahan, 67, were charged in 2010 with participating in a $2.8 million kickback scheme involving the construction of two, private for-profit juvenile detention centers in Pittston Township and Butler County and the placement of youths in the facilities.”

28) KansasState officials are negotiating with CoreCivic to possibly send hundreds of inmates to a prison in Arizona. “Sending inmates to a CoreCivic facility would plunge Kansas into the national debate over private prisons. “It’s dangerous, it’s risky and the state’s going to get sued if we proceed down that road,” said Senate Majority Leader Jim Denning, R-Overland Park, who disclosed the state’s talks with CoreCivic on Wednesday during a meeting of the State Finance Council. Democratic Gov. Laura Kelly said sending inmates to private prisons isn’t ideal but is the only option right now.”

PUBLIC SERVICES

29) National: In the Public Interest has published a new research brief on bringing critical functions back under public control. “Cities and states nationwide are finding out that the “promises” of privatization often fail to materialize once a contract is signed. When cost savings aren’t realized or service quality declines, many governments have been increasingly looking at “insourcing,” “reverse privatization,” or “remunicipalization,” that is, bringing a service or asset back under public, democratic control. Recent research and the experiences of numerous local and state governments show that, by bringing critical functions back under public control, service quality can be improved and cost-savings can be achieved to make the best use of public money.” So, In the Public Interest’s Jeremy Mohler says “the next time you hear somebody spout the talking point that government wastes money, you tell them what’s what.”

30) National: In an op-ed in the New York Times, Danielle Ofri, a physician at Bellevue Hospital and New York University, says the business of health care depends on exploiting doctors and nurses. Dr. Giulia Mobarhan, a pediatrician for over two decades, responds, “Thank you for analyzing and articulating this matter brilliantly! The privatization of Medicaid in Illinois has exacerbated this exploitation to include our finances as practices go into debt from unpaid & underpaid claims.”

31) National: Longtime labor journalist and organizer Steve Early takes aim at Trump’s “revolution” in veterans’ health care. “First starved of resources and then patients as well, more VHA facilities will become targets for down-sizing or closure by the Trump Administration. Where this occurs, it will eliminate the first choice of most veterans and force others to remain outside the VHA system, whether they want to or not. Already, the VHA has more than 40,000 vacancies, which the White House refuses to fill, creating stressful conditions for remaining care-givers, many of whom are paid less than their private sector counterparts.”

AFGE Local1206 in northern California shares the thoughts of VA Nurse Vickey Bornemann: “No knows their veterans like the VA Staff. Veterans won’t see privatization coming. I hope all VA staff who are veterans share this knowledge with all other veterans.”

32) CaliforniaPlacentia became the first city to completely exit the Orange County Fire Authority and form its own fire department last week. “The city will use the private ambulance company Lynch Ambulance to handle emergency paramedic calls instead of fire department personnel. Paramedics account for the majority of 911 calls in the city and each of the two new fire engines coming to Placentia will be staffed by three full-time firefighters and a reserve firefighter. All of the full-time firefighters will also be a licensed emergency medical technicians. Lynch Ambulance will have two ambulances in the city at all times and  staffed by at least four paramedics. Their headquarters is in Anaheim, within 700 feet of Placentia’s border. California Professional Firefighters President Brian Rice echoed what many firefighters said throughout the night during over two hours of public comment when Rice said the move threatens public safety by employing inexperienced firefighters and paramedics. ‘You guys are in a bad spot,’ Rice told the Council. ‘Your consultants are selling snake oil … you can’t get more for less.’” 

33) New Hampshire: NH AFSC’s Arne Alpert tells us that after a controversial episode aroused by CoreCivic submitting a response to last year’s Request for Information from NH HHS regarding building and/or operating a new secure psychiatric hospital, in this year’s budget process the Senate has stepped up and provided funding for a new public psychiatric hospital to care for people with severe mental illness who have been civilly committed to the Secure Psychiatric Unit at the state prison. “The budget language specifies, ‘This facility shall be operated and managed by the department of health and human services. The state shall not enter into a contract with a private or for-profit prison company for the construction or operation of the secure psychiatric facility unit.’” The House version does not include this funding. Reconciliation is ahead and then the governor must sign off on the budget.

34) International: Trump and his ambassador to Britain set off a firestorm last week after saying the National Health Service would be “on the table”—i.e. up for privatization—in any future trade negotiation. The response was clear: “The Americans have a system that checks your purse before it checks your pulse. That is the last thing we want in this country.” Medical professionals have long accused the Tory government of defunding the National Health Service to prepare it for privatization.

OTHER

35) National/International: As the exodus of migrants and asylum seekers from crisis-ridden Honduras has created an emergency on the U.S.-Mexico border and threatened to disrupt economic relations between the two countries, the libertarians have revived one of their old hobbyhorses, now with a Trumpian twist: the idea of entirely privatized “charter cities” to “make Honduras great.” The treasurer (Dan Grossman) of the small think tank which produced this gem is the former chair of the board of the Koch-funded Atlas Network. The reception has not been warm: “The rightwing, hyper-libertarian policies of the narco/coup-regimes since 2009 are a big reason *why* people are fleeing Honduras today…” Closer to home, of course, the charter cities model has collapsed in failure.

36) National: The National Alliance of HUD Tenants is fighting alongside organizations such as San Francisco’s Housing Rights Committee to get the right for tenants to remain in their homes throughout HUD’s [Rental Assistance Demonstration (RAD)] privatization process. In Minneapolis, @MNsureDogedraws a connection between shutting down homeless shelters, the springing up of and shutting down of tent cities, and privatization of HUD housing

37) New York@jqllc reports “the privatization of public parks continues, Central Park arranges VP seating for Summerstage shows.”

38) Texas/National: Texas has joined a number of states in banning red light cameras. “Supporters say the payments for the tickets contribute to government coffers, and use of the cameras reduces serious traffic accidents, such as front-into-side, or ‘T-bone,’ collisions, according to studies cited by the insurance institute. Opponents say that the cameras contribute to rear-end collisions caused by sudden braking and that the enforcement is not transparent. They also complain that the cameras are overseen by private companies that share the revenues from the tickets they generate, creating an incentive to place the cameras in high-traffic areas.” 

39) Revolving door news: Former Chicago Mayor Rahm Emanuel, a fan of privatization, has taken up a position with the “boutique” Wall Street investment bank Centerview Partners LLC, “bringing a Rolodex built over a 30-year political career.” He will open a Chicago office. “Mr. Emanuel, who will start at Centerview in July, also weighed job offers from Blackstone Group LP and Evercore Partners Inc., people familiar with the matter said.” [Sub required]