Privatization report: The charter school movement is in trouble | Nashville fights off multinational parking meter investors | 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

  • The national charter school movement looks to be in trouble. Educatio researcher Jack Schneider explains why.
  • Nashville is dropping plans to privatize on-street parking meters—for now.
  • An ICE detention center contract has divided a Rhode Island city along racial and generational lines.

EDUCATION

1) National: “The charter school movement is in trouble,” writes Jack Schneider in the Washington Post, pointing to continual failed promises and an invigorated opposition movement. “In light of these shortcomings, the long-running consensus that has sustained the charter movement has begun to unravel. That isn’t because charter schools have suddenly gotten worse. If anything, leaders in the sector have learned something over the past 25 years, and standardized scores have improved over time. Instead, it’s because the promised future has failed to materialize.”

2) National: Democratic presidential candidate Joe Biden, speaking before an audience of educators, criticizes some charter schools for draining money from public schools. “Biden’s criticism of charters represents the latest attack on these schools from the Democratic side―and notably strays from the Obama administration’s embrace of these schools. Earlier this month, Sen. Bernie Sanders (I-Vt.), another presidential hopeful, released his proposed education plan, which called for a full ban of for-profit charter schools, as well as a moratorium on public funding for the expansion of charters. Biden’s comments did not go nearly as far. When asked about for-profit charters, which only represent around 15 percent of all charter schools, he said, ‘I do not support any federal money for for-profit charter schools, period.’”

3) National: Are charter school bonds skating on thin ice? Municipal bonds are on a hot streak, including risky issues. Can it last? Investors “have poured $8 billion into funds that deal in high-yield muni bonds—or junk munis—this year, (…) Now, the strong appetite for munis has extended to sometimes riskier borrowers in the historically safe market for state and local governments. That has translated to lower interest costs for some borrowers, money managers said. These include charter schools, retirement communities and some companies that aren’t backed by the taxing power of cities, states or essential entities like water and sewer utilities.” [Sub required]. 

4) NationalPublic employees have scored wins on privatization thanks to union engagement, AFT reports. “The [Montana] House Education Committee tabled the legislation but the idea did not die easily, as some state legislators tried to tie pre-K privatization to an unrelated measure. ‘It was ugly stuff,’ said Montana Federation of Public Employees President Eric Feaver. ‘Because the union stood up,’ Cohenour said, including lots of member-to-member texting for the first time ever, MFPE was able to engage the public and halt that privatization scheme.”

5) California: “The California Legislature failed to take action on bills to impose a moratorium on new charter schools, and charter lobbyists were exultant,” Diane Ravitch reports. “Despite the ongoing scandals in the charter industry, the Legislature was unable to act. (…) Let’s see what happens to AB 1505, which enables districts to have some say over whether charters can open in their space, which would curb the rapacious appetite of sleazy operators who are able to get a charter in Rural District Z and open the school in an urban district that doesn’t want them.” AB 1505 has passed the Assembly and been referred to the Senate education committee. AB 1507, which would require all charter schools approved by a district to be located within it, has also passed the Assembly and been referred to the Senate committees on education and appropriations. 

6) California$50 million in state funds have reportedly been stolen in a charter school scheme. “According to the San Diego [County] District Attorney, the pair sought out small school districts with limited experience in oversight and proposed they start online charted schools to earn more public funds. (…) Co-defendants in the case who worked under McManus and Schrock at the charter schools reportedly failed to disclose their relationship with the men when starting the schools, claiming to be the schools’ leaders.” 

DA Summer Stephansaid “In other instances, McManus would direct co-defendants or their employees to backdate student enrollment information in order to receive additional funding. The state pays school districts based on ‘average daily attendance’ (ADA) and the defendants used their knowledge of how the state doles out funding to collect as much money as possible. For example, McManus and Schrock dual enrolled students from private schools into their charter schools. In exchange for enrollment documentation, McManus and Schrock would pay private schools a fraction of the state pays in ADA and pocket the rest – anywhere from $2,000 to $5,000 per child.”

7) California: University of California staffers represented by AFSCME 3299 held their fifth strike in the past year over unfair labor practices and outsourcing jobs. Rudy Gonzalez, the president of the San Francisco Labor Council, told the Regents “when we talk about outsourcing, we’re talking about surrendering. We’re talking about giving up. When agencies and enterprises outsource, it’s really a race to the bottom. You’re taking good middle class, union jobs, in this case, and outsourcing them to vulnerable workers who are being paid barely minimum wage. In fact, some of your internal audits show some of these workers haven’t even achieved minimum wage.”

8) Florida: The battle over school vouchers and charters is getting nastier. “One Polk County School Board member, Billy Townsend, [said Governor] DeSantis is clueless when it comes to education, and ‘all of his position (sic) on vouchers is going to do is feed vulnerable kids to grifters and abusers. (…) ‘I am very skeptical as a rule, of any essential for profit charter,’ said Townsend. ‘This school Bridgeprep has a very much for profit management company. They talk quite a bit about their real estate portfolio.’”

9) Florida: Shortly after a Manatee County charter school’s principal claimed he didn’t know about the evidence that ultimately led to a teacher’s arrest, it has now emerged that the school is facing financial difficulties. “Known as Lincoln Memorial Middle Schoolbefore its conversion to a charter last year, the school is now in ‘deteriorating financial condition,’ according to a May 29 memo signed by Heather Jenkins, chief financial officer for the School District of Manatee County.” 

10) Illinois: Over the weekend, reports emerged that Gov. Pritzker “will NOT axe the private school tax credit scholarships so long as state fulfills education funding formula. Technically, he breaks a campaign promise, but honors GOP wishes. Some hardline folks in teachers unions may bristle, but they still get paid.” The governor is “committed to negotiating ion good faith,” his spokesperson says.

11) Massachusetts: A controversial proposal to allow a New Bedford charter school to open a new campus has died in the legislature. “On May 23, Representative James Hawkins of Attleboro blocked referral of the bill to the Education Committee, saying the full House should have the opportunity to weigh in on a charter school issue instead of the handful of lawmakers attending that day’s informal session. Six days later, Cabral, with support from his fellow New Bedford-area Representatives Christopher Hendricks and William Straus, moved to send the bill to the committee for a hearing and review. (…) The Massachusetts Teachers Association, parents, and local activists last month sued in Bristol Superior Court, arguing the expansion deal violates the state Constitution, which restricts public money from going to entities that are not publicly owned and operated.”

12) Michigan: Despite pleas from union representatives, bus divers and parents, the Almont Community Schools Board has voted to outsource school bus services. “The board was set to vote on the Dean proposal at its regular May meeting, but following a last ditch pitch by [Almont Education Support Personnel Association (AESPA) representative Marty Zmiejko] agreed to give them time to come up with a counter proposal. Noting that Dean’s promised $15,000 in savings represented 0.1% of the district’s budget, Zmiejko called it a ‘rounding error.’  (…) He also questioned if Dean could deliver on its projected savings. Zmiejko said the union’s proposal was ‘just as good as Dean’s’ with the advantage of drivers who live in and are committed to the community.”

13) Ohio: The long-delayed 2016 state audit of the Richard Allen charter schools was released Thursday, and “features five findings against the schools or their leaders, including a referral asking the Ohio Ethics Commission to review the relationship between the school and its management company. ‘The arrangement between the management company and the school appears to be a violation of (Ohio law) as the management at the school has an interest in the affairs of the management company,’ the audit documents say.”

14) Pennsylvania: As the Philadelphia board of education votes on charter school approvals, it denies one application and approves three, but one of them provoked sharp dissent among board members. “‘I object,’ said school board member Chris McGinley, referring to Belmont’s renewal. ‘And I’ll be voting no, because the terms and conditions, while they don’t specifically refer to the sale of the building, this is all part of a deal that will obligate the board later to sell that building.’ (…) But the charter has a catchment area, so it functions like a neighborhood school. If it were to lose its charter, the District would lose that neighborhood school and have to buy or rent the building back—or take on millions in debt to build a new school. ‘I don’t think it’s appropriate to sell that building, but further, I don’t think it’s ever appropriate to sell a neighborhood,’ McGinley said. ‘By selling the building, we are permanently removing our presence in that neighborhood.’”

15) PennsylvaniaPittsburgh public school leaders are standing up for public education. “During the news conference, the group decried proposed legislation regarding facilities that charter schools can use and creating a uniform application process for new charter schools; a $100 million expansion of the EITC private school scholarship program, which Ms. Williams called a ‘back door voucher program;’ the makeup of the Charter Appeals Board, whose members were appointed years ago by former Gov. Tom Corbett; and funding for cyber charter schools, which they argue should be lower because they have lower overhead costs than brick-and-mortar schools.”

16) West Virginia: Teachers and other public education supporters chanted “charter schools No! public schools YES!” in the state capitol rotunda at Saturday’s special session on education. Union presidents “informed everyone that the bill has been amended slightly but not in a way that is acceptable to any of the unions.” For updates check out @AFTWV.

17) International: Watch a new short video on the Abidjan Principles on the obligations of states to provide free public education, suggested parameters for reconciling public and privatized education, and a reassertion of the central role of government. [About 2 minutes; the text of the Abidjan Principles]

18) Think tanks: The Center for American Progress has produced an issue paper setting out how Education Secretary Betsy DeVos has put students at risk by deregulating education. “Through aggressive use of its regulatory authority—including what two judges have found to be misuse—the U.S. Department of Education under DeVos has delayed, watered down, or outright eliminated crucial regulations and guidance in an effort to subvert federal laws that ensure students are treated fairly and receive a high-quality education.”

INFRASTRUCTURE

19) National: The Wall Street Journal reports that Transportation Secretary Elaine Chao failed to disinvest from one of the nation’s biggest construction-materials suppliers. “Shares of the company, Vulcan Materials Co., the country’s largest supplier of the crushed stone, sand and gravel used in road-paving and building, have risen nearly 13% since April 2018, the month in which Ms. Chao said she would be cashed out of the stock, netting her a more than $40,000 gain, corporate and government filings show. The shares, now worth nearly $400,000, were paid out to Ms. Chao in April 2018, as deferred compensation for the roughly two years she served on Vulcan’s board of directors before being confirmed as secretary of transportation, the company said.” The WSJ reports that a Vulcan spokesperson said the company “hasn’t lobbied DOT since Ms. Chao was named to head the agency,” but here’s a lobbying report apparently stating that Ice Miller Strategies LLC lobbied the Department of Transportation this year on behalf of Vulcan Materials Company.

20) National: New York Times columnist Paul Krugman says Democrats should thank Trump for helping them with a political dilemma by walking out of infrastructure talks. “Until now, Trump officials have been completely unwilling to consider a traditional, clean infrastructure program—you know, just build stuff. Instead, they have proposed complex public-private partnerships that would in effect subsidize the privatization of public assets. It has been easy for Democrats to reject such ideas, as not really being about infrastructure at all.” 

21) National: How does climate change impact state and local public finances, pensions, etc.? Here’s a podcast from the Bond Buyer in which Natalie Cohen and Lynne Funk Posner discuss the issue. “Analysts say climate change is real and impacts credit.” [Audio, about 20 minutes] 

22) Connecticut: A bill is pending in the State Senate that “provides that prior to a specified date, the Governor shall approve not more than a certain number of projects to be implemented as public private partnership projects, provides the Governor shall not approve any such project unless the Governor finds that the project will result in job creation and economic growth.” [CT S 878]

23) Maryland: Gov. Larry Hogan (R) is seeking approval on Wednesday from the Board of Public Works to solicit companies to build and operate toll lanes on the Capital Beltway and Interstate 270. “What makes Hogan’s request to the Board of Public Works unusual is that he is pursuing it over the vocal objections of many elected leaders in Montgomery and Prince George’s counties, the jurisdictions the toll lanes are intended to directly benefit.” Hogan’s decision to use a ‘public-private partnership’ model has allowed him “to bypass the legislature, which is controlled by Democrats, and Democratic strongholds in the D.C. suburbs.” 

Hogan is claiming public support. But Josh Tulkin, director of the Maryland Sierra Club, says, “Of course it appears to have public support because people have been promised congestion management with no environmental impacts and at no cost to the public. I’m surprised 100 percent aren’t for it. People are being sold a bill of goods with no data. . . . It’s a fantastical proposal that can’t possibly play out as they’re selling it.”

24) Michigan: The Detroit Free Press reports that the wealthy Moroun family, owners of the private, tolled Ambassador Bridge, would benefit from a questionable land deal connected with the proposed Fiat Chrysler development proposal that the Detroit City Council is poised to vote on. “The image that comes to my mind,” said Peter Hammer, the director of the Damon J. Keith Center for Civil Rights at Wayne State University, “is a small number of billionaires gathered around a Monopoly board game named Detroit moving all the pieces around the city.” 

25) Tennessee: In a victory for public interest advocates and some political leaders, Nashville is dropping plans to privatize on-street parking meters—for now. The deal had become a political hot potato and campaign issue, so the mayor wants to “get past the noise of the election season”

26) Tennessee: Although the parking privatization issue has been sidelined for now, a vigorous debate between mayoral candidates is taking place over the need to modernize and build new sidewalks and provide for bike lanes. But outsourcing, which brings a loss of public control, is an obstacle. At-Large Councilman John Cooper “faulted Metro for contracting out sidewalk construction. He said it wastes time and money. ‘We’re never going to stop building sidewalks and yet the way we handle it is by subcontracting it out. So much of what we do by eliminating competency of government actually ends up with having a very high linear cost and the time delays are much greater than any other city we have any data on,’ Cooper said. Swain agreed. She said Public Works should build sidewalks out in the neighborhoods where they are most needed.” 

27) Washington: Tacoma City policymakers have voted “on ‘terms’ for handing over Click! Network, the first municipal broadband system in the USA, to a private company. The policymakers, and City Staff, refer to the 40 year deal as a ‘Lease.’ This is important because the City Charter prohibits the ‘Sale, Lease or Disposal’ of any Utility System. The matter is moving to the Courts, to see if the privatization can be stopped.” [Video, about three minutes]

28) International: The energy and finance industries are getting nervous about prospects that the Labour Party will nationalize Britain’s energy network should it come to power. Several weeks ago the party released its plan to integrate public ownership of the network with a wide-ranging program for a “Green Industrial Revolution.” 

In the report, Rebecca Long-Bailey, Labour’s Secretary of State for Business, Energy and Industrial Strategy, says “Key to ushering in the Green Industrial Revolution, and the tremendous economic opportunities that come with it, will be the role of government in guaranteeing the right infrastructure is in place. The energy sector is central to the UK’s decarbonisation process. Yet energy networks are poorly placed to respond to the task at hand. Since Thatcher’s wave of privatisations, energy network companies have been able to post huge profit margins, overcharging customers to the order of billions of pounds, and failing to invest properly in infrastructure needed to accommodate the transition to renewable energy. (…) Energy networks that are owned by the public and responsive to the public interest will be able to prioritise tackling climate change, fuel poverty and security of supply over profit extraction, while working with energy unions to support energy workers through the transition.”

The business and trade press is flashing red. Infrastructure Investor says a “possible Labour victory means investors will need to be ready for battle. Logical or otherwise, the party will not abandon its nationalisation policy without a fight.”

29) Think tanks: Trade Unions for Energy Democracy’s new working paper, “The Road Less Travelled: Reclaiming Public Transport For Climate-Ready Mobility,” contains lots of good information on public-private issues. First, on the usage of the word “public,” TUED says “In relation to public transport, the word functions differently. In the phrase ‘public transport’ (or ‘public transit’), the word ‘public’ generally refers to the users of the systems, rather than their owners. Thus, some ‘public transit’ systems are privately owned or operated. At the same time, efforts to privatize ‘public transit’ may involve calls for the use of public funds to subsidize private investments, without implying public ownership, and without altering the fact that the end result is still called ‘public transit.’ In challenging the privatization of public transport systems and calling for ‘public ownership of public transport,’ we need to keep in mind that we are using the word in both of its senses.” 

In a section titled “The P3 Trip and the Underfunding Trap,” the report says “P3s are seen as a means of helping cash-strapped governments and public agencies ‘unlock’ funds held by private investors. This would allow governments to obtain the up-front capital needed for infrastructure projects that they supposedly could not otherwise find. According to UN Environment Program (UNEP) the elimination of private investor risk is a top policy priority, and the agency recommends that financial institutions and governments make use of ‘instruments for de-risking clean investment.’ This will require, among other things, the ‘identification and removal of regulatory hurdles, improvement of institutional capacity, and provision of bridging investment subsidies. Such financial de-risking instruments can transfer risk from private investors to public actors.’ P3s therefore serve to reduce risk to private sector players by shifting a larger share of it onto public entities.”

CRIMINAL JUSTICE AND IMMIGRATION

30) NationalAn inspector’s report obtained by CNN has revealed that the El Paso Del Norte Processing Center “is so unsanitary and overcrowded that migrants held by the Trump administration were forced to wear ‘soiled clothing for days or weeks’ at a time and stand on toilets to find breathing space in their cells.” Rep. Barbara Lee (D-TX) said “the administration’s continued treatment of immigrants is beyond barbaric—and shows exactly how racist and xenophobic Trump is.”

31) National: CoreCivic has just released an interesting and detailed 2019 Investor Presentation. They say they are “well-positioned to be the core solutions provider at the intersection of government and real estate.” Rather ambitious. Any other prominent people you can think of who are at the “intersection of government and real estate”? They say a “correctional facility can be converted to a detention facility and vice versa with minimal CapEx” and “owned & operated correctional facilities can be easily converted to a leased facility, operated by a government partner.”  What can they have in mind

32) National: Which 501(c)4’s does CoreCivic say they contributed to last year? A New Day for Kansas, America Works USA, Center Forward, the Congressional Black Caucus Institute, Freedom Frontier, and the Onward Ohio Policy Institute. Check out the list of state-level lobbying firms they used also.

33) National: Condemning President Trump’s “racist attacks on immigrants,” Democratic presidential candidate Bernie Sanders is calling for bans on mass raids and for-profit detention centers. Sanders is also calling for a fully funded immigration adjudication system and not holding asylum seekers in detention while applications are processed. 

34) California: The bail industry is gearing up to block bail reform in an upcoming 2020 referendum. But Elan Bustos, Charlie Kvoriak and Maksim Zarkovich, students at Oakland Technical High School say “with your help, we can make a difference. In the 2020 election, you should vote yes to uphold the contested legislation, SB 10.”

35) Connecticut: With the legislative session due to adjourn on Wednesday, lawmakers still have time to consider HB 6714, a bill that would, as an inmate’s mother puts it, “eliminate the fees that families like mine pay to stay in contact with our incarcerated loved ones.” Advocates have rallied and run a media campaign to press for passage of the bill. “‘We are waiting for it to be called for an actual vote,’ said Bianca Tylek, executive director of Worth Rises, a national advocacy group that works on criminal justice issues. ‘We understand there’s a little bit of negotiations happening between the House Democrats and the House Republicans.’”

36) Florida: Jacksonville civil rights attorney William J. Sheppard urges state attorneys to prioritize bail reform

37) Illinois: Marlen Garcia, a member of the Sun-Times editorial board, urges Gov. Pritzker to sign a bill banning private immigration detention centers. “The Private Correctional Facility Moratorium Act says that the management and operation of a correctional facility “involves functions that are inherently governmental” and must be run by a government. Gov. J.B. Pritzker must apply the same reasoning to immigration detention centers and sign a bill passed by the Legislature to bar private facilities from Illinois.”

38) Rhode Island/National: PRI’s The World reports on how an ICE contract divided a Rhode Island city along racial and generational lines. “Until this past March. Magana heard about it at school: The Wyatt was holding 133 people for Immigration and Customs Enforcement, or ICE. People were protesting outside. Magana was asked to speak at a demonstration. She’d never done that before, and her parents were worried. They’re from El Salvador.”

PUBLIC SERVICES

39) Alaska: The Dunleavy administration is getting rid of a consulting company, the Public Consulting Group, that advised that privatization of the Alaska Psychiatric Institute would make things worse. “The Dunleavy administration, which wants to privatize the institution, will shop for a new consultant. The health department says it has ‘withdrawn from its current contract with PCG for an updated feasibility study at API.’” PCG had concluded on the basis of a cost-benefit analysis that “additional staff reductions needed for budget neutrality would likely diminish the quality of service delivery.”

40) InternationalMassive protests have rocked Honduras over efforts by the rightist government to privatize public health services and education.

41) International: As Trump visits Britain amid widespread protests, U.S. ambassador Woody Johnson tells the BBC’s Andrew Marr that the whole of the economy, including the National Health Service, would be “on the table” in a future US-UK trade deal after Brexit. War on Wants says “the NHS is already part-privatised and facing ‘systematic underfunding’—and under any US-UK deal, US big business will demand access to the tendering of health contracts, likely championed as worthy additional ‘investment.’”

OTHER

42) National: Writing in the American Journal of Public Health, Julia A Dilley assesses the costs of alcohol deregulation and the impact of privatization. “During the two years following privatization, there were increases in alcohol-related emergency department visits, single-vehicle nighttime traffic crashes (a proxy for alcohol impaired driving), and alcohol dependence treatment among youths.” See also Paul J. Gruenewald, “Regulating Availability: How Access to Alcohol Affects Drinking and Problems in Youth and Adults.”

43) National: The Trump administration is reportedly set to release a plan to privatize the federal housing finance agencies Fannie Mae and Freddie Mac. “But some say the move to strengthen the GSEs before releasing them—an idea that has become known as “recap and release”—is a massive undertaking [and] could cost as much as $125 billion to shore up the GSEs’ reserves to ensure they could withstand another housing slump without requiring a taxpayer bailout.”

44) National: Private, for profit corporations are aggressively pursuing the privatization of nuclear waste removal. “Supporters say the accelerated method can get rid of a hazard more quickly and return the land to productive use sooner. But regulators, activists and others question whether the rapid timetables are safe and whether the companies have the expertise and the financial means to do the job.”

45) International: Maggie May, a small business owner, author, and story-centric content strategist headquartered in Annapolis and Philadelphia, writes about Feminist Philanthropy and the Fight Against Water Privatization. “As providers for their families, leaders in self-sufficiency, and pioneers of 21st-century survival, women are forming the front lines of the campaign against water privatization. Their unique—and often degraded—social roles place them in the optimal position to observe, respond to, and fight against water privatization, but they are also disproportionately affected by the disastrous impacts.” Though some support is available from foundations to back women’s efforts in this area, “it isn’t enough. Although women are often at the forefront of environmental initiatives, their voices are not adequately supported by philanthropic efforts. (…) Until women are accurately represented in the campaigns that seek to improve their lives, true improvement and the dissolution of water privatization remains a pipe dream.”

46) Musical interlude: Dan “Cool Hand Uke” Scanlan sings “Privatize.”