Here’s our weekly analysis of privatization in the news and in communities nationwide. Not a subscriber? Sign up.
1) National/Connecticut: As the real estate, finance and construction industries try to muscle in on the lucrative school construction and maintenance business, Stamford is considering adopting the P3 model, claiming that putting all the moving parts under a single corporate roof for years will bring cost savings and efficiency. Officials are rushing toward a decision. [Sub required].
However, as Jeremy Mohler of In the Public Interest points out, P3s are often more expensive than the traditional model for construction and maintenance of public infrastructure. “Proponents of P3s often think the model is cheaper based on ideological beliefs in the efficiency and speed of the private sector, but the traditional route may often be the better route to go, said Mohler. ‘I would say the biggest issue after the numbers is the issue of public control,’ said Mohler. ‘With this contract, residents may be giving away decision-making power of their schools.’”
The scientific literature backs up Mohler’s position, notwithstanding the P3 industry’s self-interested spin. In light of the many failures of “public-private partnerships” in the United States and internationally over the years, more recent thinking, including in the corporate sector, has taken aim at the P3 model and is advocating an unbundling of such arrangements precisely because they are not cost effective and are inefficient.
For example, Swapnil Garg and Sachin Garg, leveraging learnings from the management literature on strategic alliances, call for “a fundamental rethink of the PPP world view.” They argue that “in PPPs, where risk and uncertainty loom large, there is a need to consciously move away from long term, rigid, monolithic, and complex contracts and adopt short term, flexible, modular and simple arrangements that allow for effective management. We view this as an unbundling approach. The PPI World Bank database and experiences from the Indian highway sector are leveraged to contextualize the arguments made.” Of course, such an approach demands more energy and public accountability from local officials.
2) National: Steven Singer of Gadfly on the Wall has written a review of Diane Ravitch’s new book, Slaying Goliath: The Passionate Resistance to Privatization and the Fight to Save America’s Public Schools.
“The tide has finally turned against them,” Singer writes of Ravitch’s survey. “After three decades, it’s become painfully clear that the snake oil they are selling just doesn’t work. Our public schools are NOT failing—they’re struggling under reduced funding and the needs of students who are increasingly living in poverty. Standardized testing is NOT an effective way to assess learning; it mainly reflects family income. Charter schools are NOT producing better academic outcomes than authentic public schools; in fact, they often do much worse while denying students basic services and scamming the public. However, where the book is truly unique is in its celebration of the education activist community. Diane Ravitch talks about groups like Journey for Justice, United Opt Out, the Badass Teachers Association, and her own organization, the Network for Public Education. She talks about education bloggers, researchers, journalists, student protestors and parent groups.”
3) National: Major weapons manufacturers are increasingly getting into the business of education, Grafton Tanner reports in The Nation. “Raytheon launders many of its educational endeavors through MathMovesU, a STEM engagement initiative that boasts numerous programs aimed at young people. By 2010, Raytheon and its army of 5,000 MathMovesU volunteers had ‘engaged with’ some 50,000 American students. That same year, the company launched the Raytheon U.S. STEM Education Model in accordance with President Obama’s public-private organization Change the Equation. Raytheon pledged to get kids interested in STEM by gifting each state its own educational model that would influence how policy-makers shape public education at the state level. A detailed and subsidized plan for the corporate takeover of public learning, the STEM Education Model was a major step in the contractor’s infiltration of the US education system.”
4) National: Next week has been declared “National School Choice Week” by advocates of charters and vouchers. But as Valerie Strauss of the Washington Post reported a year ago, “It also has lots of right-wing billionaire bucks behind it. In 2016, Media Matters, a progressive nonprofit that researches conservative groups, did a masterful job of exposing where the money comes from to fund National School Choice Week. The week was started by the right-wing Gleason Family Foundation that also funds the American Legislative Exchange Council (ALEC), Uncommon Charter Schools, the libertarian Cato Institute and anti-union organizations that promote ‘right to work.’ According to the Center for Media and Democracy, the National School Choice Week website listed the American Federation for Children, the Walton Family Fund, ALEC, SPN, the Freedom Foundation, FreedomWorks, Cato Institute, Reason Foundation, the Heritage Foundation, the James Madison Institute, and the U.S. Chamber of Commerce as education partners in 2016.”
5) National: Julian Vigo reflects on the impact of new technology on education and social relationships. “One report even states that online education is the fastest-growing segment of higher education and its growth is overrepresented in the for-profit sector which begs the question as to why online learning is ignoring the many criticisms made by faculty about the quality and value of online education which many view as inferior to face-to-face education.”
6) Alaska: Rigorous public contract renewal reviews pay off, even for longtime vendors. The Fairbanks Daily News-Miner reports that the Fairbanks North Star Borough School District is dropping First Student as its school bus service provider in favor of Durham. “Student transportation in the district has been handled by First Student since it purchased Laidlaw International Inc. in 2007. The district has had a tumultuous relationship with the company, with late buses, parent complaints and driver shortages culminating in new management and a recruitment campaign in 2018. (…) In its evaluation summary, the district administration notes factors that led to the decision include the overall competitive price, a plan to attract and retain employees including a wage increase for drivers, a new fleet of unleaded gas powered buses, digital surveillance with automatic upload via Wi-Fi, safety features and high quality references from other school districts. ‘Not only is Durham offering more at a lower price, all indications are they are more than capable and willing to provide what they offer. For that reason, the Evaluation Committee recommends award to Durham.’ the document concludes.” [Sub required]
7) California: Ashford University, an online for-profit university formerly headquartered in San Diego, is converting itself into a charter. “The bottom line,” says Will Huntsberry of Voice of San Diego, is that “even if Ashford converts itself into a nonprofit, the investors in Zovio may still be able to line their pockets with federal dollars, even while the school produces poor student outcomes.” Zovio was formerly Bridgepoint Education. For more details watch Zovio’s webcast when the separation announcement was made (registration required).
8) California: Santa Clara County has reversed its decision to deny Cornerstone Academy’s charter application, which will now be resubmitted. “In August of 2019, Alpha Public Schools Chief Executive Officer John Glover sent a letter to the Franklin-McKinley School District stating that Cornerstone did not enroll “any students with moderate/severe disabilities” and did not have any “moderate/severe education specialists because of the population and needs of its scholars.” At the Oct. 22 board meeting where the district rejected the school’s renewal, the charter did not refute that statement.” But “in deciding to renew the school’s charter, the county’s board of education members stressed that Cornerstone must provide clear communication with them moving forward. The charter, in turn, made numerous commitments to the county, including increasing its recruitment efforts to Latino families and families of students with disabilities, adding at least three parents to its school board within the next year and overall, improving its transparency.”
9) Florida: They’re back. Some state lawmakers, upset that charter schools need to be sponsored by the districts in which they will operate, are trying once again to pass legislation to allow other entities to authorize charters and enter contracts for their operation. “The House in 2019 adopted the same bill, put forth by Jacksonville Republican Rep. Jason Fischer, but it had no Senate counterpart. This session, the concept of another authorizer might have more chance for success: The Senate has two bills (SB 536, SB 1578) considering the concept. SB 536, which would establish a state-level council to review applications for high-performing charter schools, already made it through its first committee stop.” But Rep. Geraldine Thompson, D-Windermere, says “the school board is elected individuals responsible for expenditures of public funds. What is proposed is authorization of charter schools by people who are not elected and not accountable to the people.”
10) Georgia: A Kennesaw charter school has announced it will close at the end of the school year, leaving children and parents scrambling for a school. Parents were informed by an email asserting it constituted “ample notice.” GaDOE’s College and Career Ready Performance Index scores over the last five years “show the Kennesaw charter school has not once equaled or exceeded [Cobb School District’s] score, and has only equaled or exceeded the state’s score twice—in 2017 and 2019.”
11) Pennsylvania: The Catasauqua School Board has denied a charter renewal to the Innovative Arts Academy Charter School. “In 2018, two former teachers filed a lawsuit against the school, claiming their contracts were not renewed because they criticized the administration.
Catasauqua school administrators have continually cited data showing the charter school underperformed in all subjects in standardized assessments, with an average growth index in 2018 that was among the worst in the state. In addition, a majority of the academy’s students come from the Allentown School District, despite the original charter expecting 75% of its students to come from the Catasauqua Area School District.”
12) Utah: A grassroots movement has sprung up to combat a recently passed regressive tax bill that would lower income taxes statewide, but raise taxes on gas, food and other services. On food, the tax would increase from 1.75% to 4.85%.
The Utah Constitution states all income tax is to be used for public and higher education. However, the food tax will shift into a general fund, which is then distributed based on the decision of lawmakers. James Tobler, president of the Salt Lake Teacher Education Association, “said this is concerning, and he worried the ultimate danger of this shift would be privatization of education. ‘Distribution of money depends on the whim of the legislature, and that is the problem,’ he said. Tobler said the Legislature has a poor record on supporting education, and he does not trust that lawmakers will work for the benefit of public schools. He believes that there is enough support to pass the referendum. His main concern is whether or not there will be enough resources and people collecting signatures to get there.”
13) National/Pennsylvania: Aqua America is renaming itself Essential Utilities, Inc., and has received permission from the Pennsylvania Public Utility Commission to complete the acquisition of Peoples Gas. “The combination will create a utility, which has 99% regulated water and gas distribution. This deal is expected to be accretive to earnings from the first full year after the closing of the same and over the long term. People’s rate base is expected to improve 8-10% annually. Rising usage on natural gas also works in favor of Aqua America.”
14) Missouri: St. Louis Aldermanic President Lewis Reed told reporters that he supported leaving intact the city’s preliminary application to federal authorities to allow the potential privatization of St. Louis Lambert International Airport even though the city no longer is considering the idea. He said that “would leave the action open for the city in future years” if officials want to reconsider the issue. Last Wednesday a city board terminated a contract with a team of consulting firms that had advised the city on privatizing the airport. The following day, the St. Louis County Port Authority “officially withdrew a request for proposals to study regional governance and the potential privatization of St. Louis Lambert International Airport. The East-West Gateway Council of Governments, the region’s planning arm, is scheduled to discuss a similar study at its board meeting later this month, according to Port Authority Chairman John Maupin.”
15) National: In a letter to the editor of the Wall Street Journal, Mary Grant of Food & Water Action takes aim at a WSJ op-ed by Seth M. Siegel which said that fears of price gouging by private water companies are overblown and that “there are too many drinking-water utilities”—meaning public water utilities that should be gobbled up by the private water industry. [Sub required] Siegel was criticizing presidential candidate Elizabeth Warren’s plan for prohibiting the privatization of America’s water infrastructure. “Regardless of where you fall on the political spectrum,” Grant writes, “water privatization isn’t in your best interest as a consumer. The U.S. is facing a water-affordability crisis, and if we hand over water services to private companies, as Mr. Siegel encourages, that crisis will worsen. On average, private water utilities charge typical households 59% more than local governments charge, largely because private financing is significantly more expensive than government borrowing on the municipal-bond market.”
16) Florida: The state attorney is asking federal investigators to review how Jacksonville’s municipal utility, JEA, decided to explore privatization and pursued negotiations with potential suitors. Melissa Nelson “confirmed that federal agencies would be taking over her investigation into the city’s energy and water utility in an emailed statement Jan. 13. ‘After thorough review, the State Attorney’s Office has determined that the appropriate venue to continue this investigation is the federal justice system. We have referred our investigation to our federal partners, who will take the lead moving forward and have the full support of this office,’ Nelson said.” Meanwhile, JEA’s new interim CEO Melissa Dykes has told city councilors that JEA should remain owned by the city. “The best way forward for JEA is a new path — one that leverages the talent of the more than 2,000 employees, the partnership of City Council and a close-knit community that supports JEA in simply becoming the very best government-owned utility it can be,” she wrote.
17) Florida: Can “public-private partnerships” lock taxpayers into a debt trap? Jacksonville is now grappling with the question of whether three downtown garages run as a P3 owe more in city loans than their garages are worth. “Metropolitan Parking Solutions, was commissioned by the city in 2004 to design, construct, own and operate a parking garage near the Duval County Courthouse, as well as two garages—the Arena and Sports Complex garages—near the Baseball Grounds of Jacksonville and other entertainment venues.”
There’s more. “While operating those garages, which opened for business in 2006 and 2007, MPS has borrowed more than $57 million from the city to cover its losses, make bond payments and earn a contractually guaranteed return on its initial $3 million investment. That amount covers only its losses through 2017, and MPS continues to borrow about $4 million a year – money that comes from the DIA budget.”
And more. “The DIA discussed the garages Wednesday after CEO Lori Boyer presented the June 2019 findings of the Council Auditor. That report identified a number of MPS errors, including a failure to pay property taxes on time for 13 consecutive years, late and inaccurate cashflow statements and violations of contract terms governing the rates charged and the number of parking spaces provided. It also identified multiple DIA errors, including a lack of written policies governing the oversight of the contract, which DIA inherited from a city agency that no longer exists.” [Sub required]
18) West Virginia: The Exponent Telegram reports that public broadband is on the way via a “public-private partnership” with Citynet. “The Doddridge County Commission, Board of Education and Citynet are teaming up to provide the wireless internet service throughout the county. The Doddridge County Commission is expected to contribute $1.5 million to the project, the Board of Education has committed $600,000 and Citynet will pay the remaining $1.9 million for a total project cost of $4 million, according to Commission President Ronnie Travis. (…) The county school system wanted to take the collaboration a step further, however, and connect students with the ongoing project, said Doddridge County Schools Superintendent Adam Cheeseman. ”
Criminal Justice and Immigration
19) National: Trump has weakened standards for ICE detention facilities. “Although ICE has come under fire for inadequate medical and mental health staffing, the new NDS no longer requires health care and medical facilities at these jails to be under the direction of a licensed physician, but instead a ‘Health Services Administrator.’ (…) The new NDS further weakens protections for immigrant detainees against the use of force and solitary confinement by officers. The prior version of the NDS barred officers from the use of ‘hog-tying, fetal restraints, tight restraints, improperly applied’ against immigrant detainees — but this restriction is now eliminated.”
20) Colorado: GEO Group’s decision to terminate its relation with the state has created a crisis of where to put the inmates—or release some. There is a proposal to reopen a wing of a state prison built in 2010, but lawmakers have yet to make a decision. “Despite warning in December that GEO Group could give the state two month’s notice, lawmakers haven’t signed off on the prison’s opening. They are working to thread a needle that not only works within the tight constraints of the budget this year, but also pleases criminal justice reformers who would likely oppose opening a new prison without legal changes intended to reduce the number of people locked up in prisons.”
21) New York: Thirty-seven of the artists participating in the current MoMA PS1 group show Theater of Operations: The Gulf Wars 1991-2011 have collaborated on an open letter addressed to the museum calling for a reappraisal of its “dysfunctional and abusive relationship to toxic philanthropy.” The letter “asks for the museum to sever ties with two of its board members: Larry Fink, CEO of investment firm BlackRock, and Leon Black, owner of the military security group Constellis and equity firm Apollo Global Management. The two have profited from weapons manufacturing, private prisons, immigration detention centers, and other industries the artists find morally objectionable.”
22) Revolving Door News: Senators Elizabeth Warren (D-MA) and Kamala Harris (D-Calif.) and Congresswomen Pramila Jayapal (D-WA) and Ayanna Pressley (D-MA) have sent a letter to Immigration and Customs Enforcement (ICE) and the Federal Bureau of Prisons (BOP) “questioning their anti-corruption policies and practices after a series of high-profile officials responsible for oversight of the private prison and detention industry have left to join the biggest companies in the industry.” The letter mentions Scott Sutterfield, Tracey Valerio, Frank Lara, Daniel Ragsdale, and David Venturella. [Text of the letter]
23) National: Sen. Bernie Sanders (I-VT) has accused fellow Democratic presidential candidate Joe Biden (D-DE) of consistently advocating the privatization of Social Security, charges Biden has rebuffed. Forbes reports that the Republican Party is targeting the programs. “In using deficit fears to target entitlement programs, many Republicans are hoping to use Trump’s second term to cut Medicare and Social Security. First, expand deficits through tax cuts, then declare that spending must be slashed. The chief target of these proposed cuts is Social Security, which historians have noted the mainstream Republican party has long sought to diminish, privatize, or both.”
24) National: In the Public Interest’s Jeremy Mohler has tracked the growing popularity of free public transit. “It saves money for those who need it most, poor and working people. Some frequent riders could save about $1,000 per year under Kansas City’s new plan. For the same reason, it can boost the local economy. More money in the pockets of working people is more money spent locally. And the public jobs it potentially creates pay better and are more stable than their private counterparts.”
25) District of Columbia: Healthcare unions are planning to use their political muscle to halt the District’s plan to replace a hospital in one of its most disadvantaged neighborhoods unless the “public-private partnership” deal, at a minimum, guarantees that workers keep their jobs and union contract. The District government “has been negotiating since 2018 with operator Universal Health Services Inc., and its business partner George Washington University, over terms to replace the only hospital in the city’s Southeast quadrant. (…) ‘What we want to definitely stress is that UHS is not the right partner for this hospital,’ Yvonne Slosarski, communications coordinator for 1199SEIU United Healthcare Workers East, said in an interview. Slosarski said an ideal outcome for 1199 would be for the district to abandon current negotiations and work with a different operator.”
26) Minnesota: Twin Cities Musicians Against Gentrification reports that more elected officials calling on @MPLSPubHousing to pause its unprecedented privatization of scattered site housing across Minneapolis. “Shouts out to @TorresRayMN @KariDziedzic @jeffreyhayden @ScottDibble @BobbyJChampion for standing with PH residents! #KeepPublicHousingPublic.”
27) Virginia/District of Columbia/Maryland: Amalgamated Transit Union Local 689 members have approves a contract to end 82-day Metrobus garage strike against Transdev. The head of the regional transit authority says he expects the authority to take over operation of the Cinder Bed Road garage as soon as Transdev’s three-year contract ends in 2021. DC Jobs With Justice says “Congratulations @ATULocal689 for winning a historic strike! Thank you for taking a stand for good jobs and public transit! #1u.”
28) International: The British National Audit Office says the construction of two hospitals will be delayed for years because of the collapse of Carillion, the outsourcing giant. “The 669-bed Midland Metropolitan, due to open in October 2018, is now expected to open in the summer of 2022, at a cost of at least £988 million, over £300m more than the original amount, said the report. The taxpayer is expected to pay £709m of this, an increase of 3 per cent from the original figure, said the NAO. The private sector has borne most of the cost increase, with shareholders, investors, insurers and Carillion losing at least £603m on the construction of both projects, it was found.”
But the Daily Mirror says that under the Conservative government, “two years on from Carillion’s collapse nothing has changed. The Government is still wedded to privatisation and outsourcing despite clear evidence that they neither offer value for money nor lead to greater efficiency. And unscrupulous bosses are still making excess profits from government contracts.”
29) National: The Securities and Exchange Commission examiners are going to be probing the risks of outsourcing to the financial and operational health of private firms, the Wall Street Journal reports. “On the outsourcing front, they plan to keep an eye on risks stemming from giving data-storage, asset-management and other duties to outside vendors.” Time for a similar study of the risks to the public services and structures?
30) Colorado/Revolving Door News: The Western Values Project looks back on how “three years of revolving doors, huge campaign contributions, and reckless decisions” under Trump have left public lands users footing the bill. “Even worse, the Trump administration wants to privatize the way public lands and national parks are run, which could lead to increased fees for public lands users.” Under Interior Secretary David Bernhardt, “the corruption is absolutely shameless,” said Public Citizen as it released a new report.
31) District of Columbia/National: How democratically are public goods distributed? Robert Shibley, the dean of the School of Architecture and Planning at SUNY’s University at Buffalo says expectations from past experience play a role. “Ward 2 may log a higher number of complaints relative to other wards because residents of wealthier parts of the city, like Ward 2, may be accustomed to higher quality public goods than residents of less privileged areas. ‘There’s a high expectation based on the demographics of high levels of service,’ Shibley said. ‘That is to say, more privileged communities might get large amounts of calls because they have an expectation of service that other groups have long since given up on trying.’”
32) North Carolina: In a feature-length cover story, the Triangle Business Journal reports on how healthcare jobs are booming in North Carolina—but low pay is a big problem. “Those changing payment models include the transition to ‘value-based care’ from ‘fee-for-service,’ which reimburses providers based on outcomes instead of individual services and forces health systems to share in the total cost. Few places have seen a more aggressive push toward the model than North Carolina, which has incorporated the approach into its looming privatization of Medicaid plans and has seen its largest insurer—Blue Cross and Blue Shield of North Carolina—announce value-based care contracts alongside the state’s largest health systems last year.” [Sub required].
33) Revolving Door News: In a new exposé, the Project on Government Oversight has laid out the details of how accountants took Washington’s revolving door to a criminal extreme. “As Sweet would later testify, his bosses at KPMG soon made clear how they expected him to earn it. KPMG had been performing disastrously on inspections conducted by the Public Company Accounting Oversight Board (PCAOB), and it was under pressure to improve. In the annual inspections, the oversight board scrutinizes a sample of the audits that major accounting firms perform on companies listed on U.S. stock markets. Advance word of which audits the PCAOB planned to inspect would give KPMG an edge. On Sweet’s first day at the firm, over lunch at a posh Mediterranean restaurant, KPMG brass pumped him for information on the PCAOB’s inspection plans.”
34) New Book: Cornell University Press has published a book edited by UMass Amherst Labor Center faculty members, “Labor in the Time of Trump.” It includes a chapter on privatization by In the Public Interest’s Donald Cohen. Issues covered include Trump and privatization, how privatization relates to attacks on unions and workers, the charter school agenda, the Clinton administration, fine-print contracts and privatization, rebuilding a pro-public movement, and much else.
35) New Book: Linda McQuaig writes on how privatization is impoverishing the public in Canada. “In her latest book, The Sport and Prey of Capitalists: How the Rich Are Stealing Canada’s Public Wealth, McQuaig argues that Canada was built by massive public investment in railways, energy, Medicare and public spaces—and that in the last 25 years, governments have been on a privatization crusade. ‘I’m trying to make Canadians aware of this wonderful history we have. The United States excels at private enterprise. We excel at public enterprise. But we don’t know those stories,’ she told The Sunday Edition’s Michael Enright.”
Governing for the Common Good
36) National: On Martin Luther King Day, historian and museum curator Samir Meghelli reminds us, “as many of our cities experience rapid gentrification,” of what Dr. King had to say about the need for participatory planning and community-led development. “Few D.C. residents today are aware—though longtime residents may remember—that in March 1967, the Rev. Dr. Martin Luther King Jr. led a grand parade through the Shaw neighborhood. (…) The Model Inner City Community Organization (MICCO). MICCO sought to reimagine the federal policy of urban renewal that was displacing more than 23,000 residents and 1,500 businesses from southwest D.C. in the 1950s and ‘60s. Rather than that kind of undemocratic redevelopment in which residents had no say, Reverend Fauntroy and MICCO pushed for urban renewal ‘with the people who lived there, by the people who lived there, and for the people who lived there.’”
37) National: The National Employment Law Program (NELP) reports that on January 1, the minimum wage increased by law in 21 states and 26 cities and counties. In 17 of those jurisdictions, the minimum wage reached or surpassed $15 per hour. “Later in 2020, four more states and 23 additional localities will also raise their minimum wages—15 of them to $15 or more. This is the greatest number of states and localities ever to raise their wage floors, both in January and for the year as a whole. More and more jurisdictions have been raising their minimum wages since the Fight for $15 movement began in November 2012. In total, 24 states and 48 cities and counties will raise their minimum wages sometime in 2020.”
38) West Virginia: In Huntington, local officials and community based organization have developed an on-the-ground immediate response program for the addiction crisis—the Quick Response Team (QRT). White House Office of National Drug Control Policy Director Jim Carroll explained how it works to The Hill’s Rising With Krystal Ball and Saagar Enjeti. “Within 24 hours of an overdose and someone is revived and sent home there’s four people that show up at the door, someone from the county or city health department saying we can help you find treatment, we’re here for you. There’s law enforcement, not in uniform, to say, if you have anything in the house I’m just going to take it, we’re not going to arrest you, we’re not going to prosecute you, we’re going to be able to do that. There’s someone from the faith community to say we can help put food on the table, we’ll help your family, we’ll foster your pet, all these reasons people are hesitant to go into treatment. And then finally, a peer.”