Privatization report: How much charter schools really cost | Illinois could ban private prisons | 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

EDUCATION

1) National/California: In a new report, In the Public Interest, in partnership with California’s West Contra Costa Unified School District (WCCUSD) staff, directly measured the financial impact of charter schools on students who attend the district’s traditional public schools. “Charter schools add $27.9 million a year to WCCUSD’s costs of running its own schools, this study finds. That’s a net loss, after accounting for all savings realized by no longer educating the charter school students. As a result, the district has $978 less in funding for each traditional public school student it serves. This previously unmeasured cost is a conservative estimate. The district faces additional fiscal pressures due to charter schools that are too difficult to measure, such as the inequitable proportion of state funding it receives for educating high-needs students.”

2) National: Jitu Brown, national director of the Journey for Justice Alliance, joined John Iadarola of The Damage Report to talk about last week’s national day of action on defending public education. [Video, about 7 minutes] 

3) National: Noliwe Rooks, author of Cutting School: Privatization, Segregation, and the End of Public Education, updates us on school privatization, discussing TFA, cybereducation, and more. [Video, about 6 minutes] 

4) National: Writing in the New Republic, Jennifer Berkshire, author of the forthcoming (next year) book, The Dismantlers: The Assault on Public Education & the Future of School, delves into Cory Booker’s long connection with school privatization leader and now Trump education secretary Betsy DeVos. “DeVos has hinted that she is once again looking for Democrats to support her latest iteration of school vouchers, a new $5 billion school choice proposal she’s dubbed ‘Education Freedom Scholarships.’ Democrats have scoffed at the suggestion, seeming to forget that many of them paved the way for such plans by embracing charter schools and parroting the language of school choice.” Booker has rejected Bernie Sanders’ call for a ban on for-profit charter schoolsand a pause on federal funding for new charter schools. “At a campaign stop in New Hampshire last week, presidential candidate Sen. Elizabeth Warren, D-Mass., called for-profit charter schools a ‘real problem’ and said that DeVos’ actions ‘[undermine] the best opportunities for our kids.’” 

5) Arizona: Arizona Republic reporter Craig Harris says “charter school reform failed. If you want to see what it looks like, visit this Prescott campus. The Arizona Legislature is expected to adjourn without addressing an issue that Gov. Doug Ducey, Attorney General Mark Brnovich and key state lawmakers had agreed was desperately needed: Charter school reform. (…) Senate Bill 1394 would have required charter operators to have at least three governing board members, with no more than two being immediate family members. It would also have prohibited them, with a few exceptions, from buying goods or services from a charter operator, board member or immediate family member of the charter holder or board member. And they would have been required to publicize their annual state revenues and income from other sources, as well as their spending on teacher salaries and other expenses.”

6) California: The battle over charter schools is coming to a head. “Amid competing protests in Sacramento on Wednesday, the California Assembly narrowly passed legislation that would give local school districts sole authority to approve new charter schools. (…) AB 1505 is one of four bills regulating charter schools that either the California Assembly or Senate is considering. Here’s a breakdown of what they would do.” At a demonstration, CTA President Eric Heins told his supporters “We’ve been through an era of the Wild West around the charter schools. What we find is that there is a charter school industry that’s risen in California without any accountability or transparency.”

7) California: Teamsters Local 952 is praising a responsible contracting decision by the Santa Ana Unified School District Board of Trustees that recognized “the importance of quality workers over cost” by rejecting a bid from a school bus operator. “Our members mobilized and spoke to the board of trustees, and the trustees listened to what they had to say,” said Patrick Kelly, Local 952 Secretary-Treasurer. “We would like to thank our fellow Teamsters who were so quick to take action on behalf of not just themselves, but the students they transport. We’d also like to thank the board of trustees for addressing the concerns of their constituents.”

8) District of ColumbiaFive new charter schools have been approved despite concerns about vacant seats on existing campuses. “Paul Kihn, deputy mayor for education, wrote a memo to the charter board ahead of its vote expressing concerns about adding charter campuses, saying they ‘are competing for a relatively limited number of high school aged students.’ Kihn said the city has ample empty seats in the charter and traditional public school sectors. Smaller schools are more expensive to run, and some city leaders and education advocates fear that adding schools could further tax resources. Some neighborhood schools face budget cuts for the coming academic year because their enrollment is projected to take a steep dive.”

9) Florida: State education commissioner and longtime school privatization activist Richard Corcoran is demanding state takeover of struggling public schools. “‘We will find ways to hold these districts accountable,’ Corcoran told the State Board of Education during its meeting at Mort Elementary School in Tampa. That could mean never approving the districts’ turnaround plans required in state accountability law, he suggested, or asking lawmakers to grant the Department of Education emergency powers to step in when districts refuse to comply.” Duval superintendent Diana Greene, “visibly annoyed, pushed back. She said her district had 40 charter schools already, and that the community did not prefer IDEA. She added that she had been in her current job for only 10 months, and had seen enough to know in her professional judgment that the schools can improve without taking the step that Corcoran advocated.”

10) Georgia: Baldwin County School District has decided to outsource substitute staffing needs to Education Staffing Solutions (ESS), a Tennessee-based company. “Three ESS representatives were present at last Monday’s board work session to pitch their company and answer any lingering questions board members might have before approving the agreement.” When a similar proposal was brought to the Carlisle, Pennsylvania school system late last year, a staffer said, “If you go to this other thing, my health insurance is going to go up… I will lose $2 an hour pay. I already work two jobs. I don’t like being treated like crap.” ESS has been involved in controversy over its no-bid contracts with the Nashville public schools. In 2017 ESS merged with Source4Teachers, a portfolio company of the private equity firm Nautic Partners LLC. Nautic lists among its active investments “S4T Holdings, LLC (Source4Solutions, LLC / Education Solutions Services / ESS Group).”

11) Illinois: The Earlville School Board of Education has decided against outsourcing its cafeteria services to save money since outsourcing “would only make it worse.” According to Superintendent Rich Faivre, “the bid from Arbor Management was $4.29 for lunch and $1.70 for breakfast, a cost that [he] said could push the cafeteria fund into a $25,000 deficit. ‘It would be significantly more to contract out our food service,’ he said.”

12) New Mexico: Moises Gonzales an associate professor in the University of New Mexico School of Architecture and Planning, says“I committed to voting yes for our union. We need a faculty union at UNM to push back against the privatization of higher education.” William Veeder, a temporary part-time faculty member, says “by forming our union, we can improve adjunct pay and benefits; we have a legal right to have union representation and to organize for a better future.” 

13) Washington: First Student, a private school bus company with ties to charter schools in Tacoma, Tenino, and Rochester, has been fined $23,700 for safety violations, according to the state Utilities and Transportation Commission. “First Student, which operates throughout the country, including in Washington state, was subject to a routine safety investigation in February, according to the state agency. Following that, the agency found more than 150 violations of state and federal transportation safety laws. Among them: 99 violations of failing to require drivers to prepare driver vehicle inspection reports, and 44 violations of using a driver without a pre-employment drug test.”

INFRASTRUCTURE

14) National: The meeting between Trump and top Democrats to discuss a way forward on addressing America’s critical infrastructure needscollapsed after a few minutes when Trump stormed out of the meeting, voicing irritation that Democrats continue to pursue investigations into his finances and House Speaker Pelosi accused him of a cover-up as pressure grows for impeachment. It was hoped, though not really expected, that the meeting would address public and private funding and financing issues. After this latest failure, lawmakers have moved on to focus on a deal to reauthorize existing transportation and transit legislation, which expires next year. “With the unpredictability of today’s political climate in Washington, the only certain forecast is that our nation’s roads and traffic will get worse, the economy will slow, and fewer Americans will have jobs until politicians step up and address this critical issue,” said ATA President and CEO Chris Spear in a statement. “The House and Senate are about to begin drafting a transportation bill, and truckers will continue to support these efforts. We hope the President and Congressional leaders resume productive discussions to solve this.”

15) National: Jeremy Mohler of In the Public Interest explains why “Public-Private Partnerships Will Never Solve America’s Infrastructure Crisis.” The stark realities of the infrastructure crisis “are directly related to another core issue—decreased federal investment is resulting in de facto privatization. The more Washington dithers, the more state and local governments become desperate for cash, and the more receptive governors, mayors and other officials become to lobbying about ‘innovative’ alternatives. Almost all public infrastructure is built and maintained by state and local governments using tax revenue or user fees, like tolls, or a combination of both. (…) This chronic underinvestment has opened the door for a growing industry of global investors, construction giants and water corporations looking to cash in on the crisis. Their tool of choice is the so-called ‘public-private partnership,’ essentially an expensive loan that often comes with strings attached. They front the money to build new infrastructure or manage an existing asset in exchange for lease payments or the right to collect revenue.”

Mohler writes, “the evidence is in. Public-private partnerships are more expensive than traditional public investment, tend towards being secretive and undemocratic, often limit public decision-making and—like all privatization schemes—outsource good, stable public jobs. Congressional Democrats must continue to hold the line if the Trump administration resumes its push for a combination of infrastructure spending cuts and federal subsidies for private investment. In no way should they entertain Republican ideas like asset recycling, in which Washington incentivizes state and local governments that sell off infrastructure. At the same time, they must demand direct public investment paid for with higher taxes on corporations and the wealthy.”

16) National: “Don’t let Donald Trump’s tiny little hands anywhere near infrastructure spending,” says Adam Peck in Think Progress. “In fairness to the president, his deficiency is one shared by most of his fellow Republicans, and an alarming number of Democrats. To these politicians, infrastructure spending is simply shorthand for new construction projects which provide jobs, improve standards of living, and are largely financed by private developers subsidized by state and federal dollars. These public-private partnerships are adored by conservatives, ever eager to prioritize the free market over the public good. But they are appealing to plenty of Democrats as well, who are taken in by the prospect of private financiers footing the bill instead of the public, which would necessarily be hit with higher taxes as a result. There are several problems with this model, however.”

17) Illinois: The Godfrey Village Board has had to set aside about $5 million “to help people with future rates if Illinois American Water Co. makes ‘drastic’ rate increases.”

18) Missouri: St. Louis Post-Dispatch columnist Tony Messenger reports that the funder of the effort to privatize St. Louis Lambert International Airport “is making money on both sides of the deal. (…) Dimensional Fund Advisers, it turns out, owns shares in both the key financial adviser to the airport privatization process, and one of the companies that has been lined up to bid on managing the airport.” In the Public Interest Executive Director Donald Cohen says “cities need to understand that the only way to ensure they really represent the people who live there is to make sure there is no actual nor perceived conflict of interest in projects or how the city is run. This arrangement seems a clear violation of the public trust, weakens democracy and is sure to benefit the powerful over the few.” City Comptroller Darlene Greene adds, “I wish I could say I’m surprised; but a conflict of interest was bound to happen when the city went forward allowing a private entity to use its money to exert influence and control over the privatization process.”

19) New YorkBroome County is exploring the possibility of privatizing management of Greater Binghamton Airport, and has issued Requests for Proposals. County Executive Jason Garnar “says proposals are due back to the county by the middle of next month. He says a panel of stakeholders, including members of his team, the legislature, the Airport Advisory Board and the Greater Binghamton Chamber, will review the options.”

20) Puerto RicoGrassroots and environmental groups are opposing privatization of the island’s electric utility. In an interview with Melinda Tuhus for Between the Lines, energy researcher Cathy Kunkel says “all of the environmental groups in Puerto Rico are against it, in part because of the rate impact, and also because it imposes debt charges even on people who install their own solar system. So it’s going to act like a disincentive to go solar, even though after the hurricane literally everyone agreed that it was ridiculous that Puerto Rico has no solar essentially, and that would help make the system more resilient for future storms.” 

21) Tennessee: City employees denounced Nashville Mayor David Briley’s plans to privatize the city’s on-street parking meters at a Metro Council meeting, and eight council members voted against allowing the measure to proceed to a second reading. [Video, about two minutes] Also, a prominent Nashville business owner is pushing back against the plan.

22) International: Two months after opening, Saskatchewan Hospital North Battleford, which was constructed under a ‘public-private partnership’ model, needs its entire roof replaced

23) International: Prominent Malaysian economist Jomo Kwame Sundaram says the ‘public-private partnerships’ fad is fading. “After the failure and abuses of privatization became apparent, public-private partnerships have since been promoted ostensibly to mobilize private finance for the public purpose. In all too many cases, PPPs have socialized costs and losses while ensuring private financial gains.” 

CRIMINAL JUSTICE AND IMMIGRATION

24) National/Florida: The Miami Herald and WPLG report that activists are bringing pressure on banks that finance the Homestead detention center for unaccompanied migrant children. “Another tactic, one borrowed from those who object to private prisons in general, is starting to emerge. Foes of the facility want to shame financial backers into withholding credit. In recent months a handful of big banks, including Wells Fargo and JPMorgan Chase, have indicated they plan to transition out of the business of financing companies that run private prisons. An exception is Bank of America. According to documents filed in August with the Securities and Exchange Commission, Bank of America provided a $380 million loan for Caliburn, the company that runs the Homestead center under a U.S. government contract, as well as a $75 million revolving credit line, records show.”

25) National: Reps. Jason Crow (D-CO), Rosa DeLauro (D-CT), Sylvia Garcia (D-TX), and Hank Johnson (D-GA) have introduced legislation to require HHS and DHS to open access to for-profit immigration detention centers to members of Congress within 48 hours of a request. “In Colorado 6th’s district, ICE repeatedly denied Crow access to a GEO Group-run facility in Aurora, including blocking the Congressman from attending a press tour. Crow finally received a tour over three weeks after his initial visit and request on February 20th. The Aurora facility has come under fire for multiple reports of poor conditions and disease outbreaks. To date, detention centers in Texas and Louisiana have also reported similar disease outbreaks resulting in quarantines and a loss of due process.”

26) National/Texas: CoreCivic has announced that it has entered into a new contract under an Intergovernmental Agreement between the City of Eden and the U.S. Marshals Service (USMS) to activate its currently idle 1,422-bed Eden Detention Center this summer. “The new agreement permits Immigration and Customs Enforcement (ICE) to utilize capacity at the facility at any time in the future.  USMS and ICE currently expect to utilize the total facility capacity under the new contract.” The contract is expected to create $35-40 million in annual revenue.

27) Arizona: Shortly after a federal judge “ordered the Arizona Department of Corrections to comply with several performance measures after noticing ‘unacceptable levels of noncompliance remain in three critical respects,’” the Prison Law Office and the ACLU have submitted more than 200 letters documenting “women miscarrying due to a lack of proper health care, a woman giving birth alone in a cell, and deaf inmates not getting interpretation services during doctor visits.” Arizona contracts with Corizon Health to provide care to inmates. A new company, Centurion, takes over in July.

28) ArkansasGov. Asa Hutchinson (R) says he plans to hire an Indiana company to manage five state youth prisons, even though lawmakers voted against the $15.8 million contract. “Arkansas Legislative Council members voiced concerns about for-profit Youth Opportunity Investments LLC of Carmel, Ind., because of recent troubles the company had managing Michigan juvenile lockups, as well as issues some of its executives had overseeing facilities in Indiana and Arkansas years ago when they were with different firms. Lawmakers said that state officials failed to carefully review Youth Opportunity’s past when deciding if it met the requirements of a request for proposals to run the Arkansas juvenile lockups. (…) While the Legislature has the statutory authority to ‘review’” state contracts, the governor can override this vote.” 

29) Illinois: A push to ban privatized immigration detention centers across the state is headed for Gov. J.B. Pritzker’s (D) desk. “A spokesperson for Pritzker did not say if the governor plans to sign or veto the bill. His office issued a statement saying Pritzker believes Illinois ‘should be a welcoming state for immigrants and looks forward to reviewing the bill.’ (…) The Illinois bill, if it becomes law, will amend the Private Correctional Facility Moratorium Act. It would prohibit the state or any local government agency from entering into an agreement with a private company over the detention of individuals.” 

30) Michigan: The Detroit Free Press reports that “problems have dropped dramatically 10 months after the state of Michigan ended a privatization experiment and returned state employees to prison kitchens, according to the Corrections Department.” Corrections Department spokesperson Chris Gautz said “the kitchens are also cleaner and more fully staffed and the meals are much more likely to be served on time. (…) Gautz said one of the biggest changes is ‘dramatically lower staff turnover,’ compared with when kitchen contractors were used. ‘Trinity and Aramark both churned through employees constantly,’ he said. As a result, ‘you had people with only a few weeks of experience showing the ropes to the newest employee off the street.’”

PUBLIC SERVICES

31) National: Officials are reeling after the Trump administration moves to kick undocumented immigrants out of public housing. The effect “could be to oust roughly 55,000 American-born children, because many receive partial subsidies to live in public housing with parents or grandparents who might not have their papers, according to a National Housing Law Project analysis of HUD data.”

32) National: Democratic presidential candidate Joe Biden denounces Medicaid privatization.

33) National: The American Federation of Government Employees (AFGE), citing the costs of Veterans Administration privatization, calls for the Mission Act to be repealed. “Powerful special interests see the VA as a money-making opportunity, not an agency meant to help veterans. Through their allies in Congress, they have been enriching themselves by slowly dismantling the VA so that more and more veterans are sent to for-profit hospitals and clinics. Politicians last year passed the VA MISSION Act, an important law that will fast track privatization of the VA under the disguise of helping veterans.”

34) Connecticut: Gov. Ned Lamont (D) is threatening to veto a bill establishing paid family and medical leave because he insists private, for-profit corporations should have a role in running the benefits program. “Public employees have criticized privatizing a paid family and medical leave program. Council 4 of the American Federation of State, County and Municipal Employees said in April the program should be administered by the Department of Labor, which serves the public, ‘not private shareholders.’”

35) Maryland: The shakeup continues at the University of Maryland Medical System as the chief executive of University of Maryland Capital Region Health resigns. “The hospital system is a public-private partnership that received nearly $25 million in state funding in the past two years. It is the subject of multiple audits mandated by the General Assembly. Ashworth, a senior vice president with the system since 2004, became interim CEO in April after Robert A. Chrencik resigned in the wake of the scandal. Pugh, who was paid $500,000 for her ‘Healthy Holly’ books, resigned, along with the board chair and four other members.”

36) Texas: Austin officials are considering selling an historic school that now houses health and veteran services for Travis County residents to redevelop its building and surroundings. County Judge Sarah Eckhardt “said it would be beneficial for both the city and the county to see what private developers propose for the area, and she suggested that a public-private partnership might help the city pay for buying the school. Or the best option for the county might not be a sale at all but a longterm lease, Eckhardt said.”

37) International: UN Special Rapporteur on Extreme Poverty and Human Rights Philip Alston has a new report on the causes and effects of poverty in the United Kingdom, and privatization is part of the picture. “The United Kingdom was a pioneer in privatizing previously public services across a wide range of sectors. In 2018, the National Audit Office concluded that the private finance initiative model had proved to be more expensive and less efficient than public financing in providing hospitals, schools and other public infrastructure.56 Studies of the results of privatization in sectors such as water, energy and public transportation suggest that prices have been raised excessively while access for low-income households has been restricted and capital investments have been inadequate. One study concludes that ‘private providers of basic services are creating structures for sweating capital assets and extracting revenue at the expense of households.’”

OTHER

38) National: Eileen Appelbaum, co-director of the Center for Economic and Policy Research and coauthor of Private Equity at Work: When Wall Street Manages Main Street explains how Private Equity is a Driving Force Behind Devious Surprise Billings. “Private equity has shaped how these companies do business. In the healthcare settings where they operate, market forces do not constrain the raw pursuit of profit. People desperate for care are in no position to reject over-priced medical services or shop for in-network doctors. Private equity firms are attracted by this opportunity to reap above-market returns for themselves and their investors.”

39) National/Rhode Island: WPRI reports on how military families are having to deal with poor conditions at privatized housing at Naval Station Newport and elsewhere. “According to the survey, 71 percent of residents of privatized military housing at Naval Station Newport have had issues with maintenance and repairs.” Includes a brief interview with Shannon Razsadin of the Military Families Advisory Network [Video, about 2 minutes]. See MFAN’s reports on privatized military housing.

40) Minnesota: The Defend Glendale & Public Housing Coalition is joining the Keep Public Housing Public Minneapolis Coalition “because these are our homes and communities, and we don’t want them to be dismantled so developers and investors can profit. We want public housing to stay safe, stable, and vibrant for us and for future generations in this city. That’s why we are proud to be one of the founding members of the Keep Public Housing Public Minneapolis Coalition. Together with Young Muslim CollectiveTwin Cities Musicians Against GentrificationMinneapolis Coalition for Responsible GovernanceTC DSA Housing Justice Branch, and Harrison Neighborhood Association, we are calling on City officials to stop MPHA’s privatization of public housing in Minneapolis, which is being pushed by Trump and his HUD Secretary Ben Carson.”

41) Revolving door news: Scott Amey and Laura Peterson of POGO report on how David Dunlap, a former head of regulatory policy for Koch Industries, “participate[d] in sidelining a long-awaited study on a suspected carcinogenic chemical produced by his former employer—and only recuse[d] himself from the matter after the fact.” They say “Congress is interested in getting answers related to Dunlap and the decision to halt the formaldehyde health assessment, but it should also turn its attention to creating stronger ethics laws requiring a recusal for any appointee or government official when their former employer or client holds any interest in the outcome.”

It’s not only Dunlap. Under Administrator Andrew Wheeler, who Open Secrets describes as “a rank-and-file member of Washington’s revolving door,” EPA is also “considering a change to how oil and gas industry methane emissions are counted that could push them below required reporting levels under the Clean Air Act.”

EPA’s role in policing chemical safety has deteriorated in other areas as well. On Friday, Tom Neltner and Maricel Maffini of the Environmental Defense Fund published an article pointing out how the Trump EPA is weakening contamination standards by nobbling the science. “The agency only got to 56 ppb by distorting the science and essentially throwing out much of the important and innovative work it had done that showed the need for a more protective standard. Plain and simple, this decision puts children’s brain development at risk.”