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This Week’s Outsourcing Scan 3-14-2016

1) National: In the Public Interest and the Partnership for Working Families issue a report on community and labor best practices for ‘public private partnerships,’ which would contribute to reducing inequality. “While the use of P3s is hotly debated, if governments are ultimately paying a higher cost of capital through private financing schemes, it is even more critical that they demand that the resulting projects provide community benefits, including quality jobs for disadvantaged communities. This report offers several recommendations for incorporating job quality and job equity programs and policies into P3 arrangements.”
 
2) National: As Sunshine Week kicks off with multiple events across the country, the Associated Press gives a rundown of how open record laws are applied in state legislatures. AP “sent open-records request to the top lawmakers in all 50 states and most governors, seeking copies of their daily schedules and emails from the government accounts for the week of Feb. 1-7. The AP received more denials than approvals from lawmakers. It did not generally request emails from private accounts because rules and practices on those vary widely from state to state.” AP provides summaries of the responses.
 
3) NationalFortune and the Washington Post look at how Uber is cutting into public transportation, in part by using public subsidies to compete with public services. “‘I see this plan as blowing (the city’s) budget out of the water,’ said Joann Weiner, director of the master’s program in applied economics at George Washington University. Subsidies usually cause costs to increase because someone else is picking up part of the tab, she said. The city’s budget also may not account for rider demand.”
 
Jobs with Justice reports
 that “Faced with drivers who are coming together to confront its exploitative business model, Uber is turning to traditional big-business unionbusting tactics, like enlisting customer service representatives in their effort to dissuade drivers from having a say over their jobs and tapping the Chamber of Commerce to block Seattle’s new ordinance from taking effect.”
 
4) National: Privatization opponent Diane Ravitch calls on Democratic presidential candidate Bernie Sanders to clarify his position on charter schools. “In a hotly contested election, we need to encourage both Democratic candidates to stand up for public education with democratic governance.”
 
5) National: T. Jameson Brewer discusses “how teach for America is covertly privatizing public education.”
 
6) National: Writing in Politico, Arjun Sethi of Georgetown Law School and Cate Graziani of Grassroots Leadership call for a campaign to end private profiteering by the “treatment industrial complex.” Despite calls to end mass incarceration, “a new system has emerged that bears many of the same features. You could call it the ‘treatment-industrial complex’—the growing network of facilities and companies built to handle court-ordered community corrections, correctional medical care, and mental health and civil commitment facilities. As more individuals are being treated and rehabilitated both inside and outside prison walls, for-profit companies are stepping in and profiting.”
 
7) National/International/Louisiana: The Toronto Globe and Mail warns of the risks to public pension investors of getting involved in the wrong kind of infrastructure P3 deals, such as a Louisiana utility company. The deal was blocked by the Public Service Commission as not in the public interest.
 
“The regulator’s criticisms also raise a more challenging question about the stability of these long-term investors. Pension funds are fond of touting their long-dated liabilities as an indication that they will invest for many years. In the case of Cleco, the bidders said private ownership offered ‘more patient investors, who are better able to focus on long-term growth opportunities, rather than on short-term gains.’ But Louisiana Public Service Commission Staff worries that’s only a guarantee for eight years—when Macquarie, which would own over 54 per cent of the company, could exit the investment. No other investors will be obligated to stay either. At that point, the higher debt levels could make the asset less attractive to other purchasers, they said.” [Sub required]
 
8) Alabama: A riot at the jam-packed Holman prison complex has again raised questions about new prison construction. “Alabama has about 24,000 inmates in prisons designed for about 13,000. Bentley and Department of Corrections Commissioner Jeff Dunn are pushing a plan to build three new men’s prisons and close 13 of the 15 the state now operates.” Design-build vs. design-bid-build proposals are competing. Legislation authorizing the plan is still stuck in committees. [Alabama Prison Transformation Plan]
 
9) California: As the MTA prepares to unveil its plan for a new half-cent sales tax measure for new rail projects, LA Weekly looks at some of the items on the menu. “We don’t know exactly what’s on the list, but we can make an informed guess. Here is what the MTA calls its ‘shovel-ready’ projects. This is probably a pretty good starting point.”
 
10) CaliforniaAlternet’s Steven Rosenfeld details how the California Board of Education rolled over local objections and allowed Rocketship Education to open a computer learning-centered charter elementary school in Mt. Diablo Unified School District, despite objections from “a parade of local and county school board members, top administrators and principals, English language and special education teachers, Latino community outreach workers, parents and others.”
 
11) Connecticut: Responses to a Request for Proposals to finance, build, operate, and maintain a solid waste management facility are due tomorrow at the state’s department of energy and environmental protection. “By design, the project is meant to be privately funded, but ‘the state retains the right of public financing,’ said the RFP.” [Sub required]
 
12) Florida: The board of Tampa General Hospital, a revered public facility that was privatized some years ago, backtracks on the idea of giving its members hefty raises after an angry public reaction. “The board voted recently to pay its members a yearly stipend of between $15,000 and $30,000, depending on a board members’ individual assignments. David A. Straz Jr., a valued board member for nearly 20 years, voted against any stipend and promptly resigned, telling the Times ‘it’s a horrible idea.’” [Nonprofit Quarterly looks at the issue of board compensation]
 
13) Florida/National: Geo Correction Holdings pays nearly $10 million for land to build a new headquarters for the Geo Group in Boca Raton. “Malcolm Butters, head of the Butters Group, told The Real Deal that it made economic sense to sell the land instead of developing it. “As they say in the Godfather, they made us an offer we couldn’t refuse,” Butters said.”
 
14) Illinois: The Chicago Transit Authority awards an up to $1.3 billion contract to the Chinese firm CSR Sifang America to build 846 railroad cars at a facility to be built on the city’s south side. The city is seeking a federal loan to support the project: “The Transportation Infrastructure Finance Innovation Act loan request of up to $350 million for the Rail Fleet Renewal Project has long been planned by the CTA and is tentatively scheduled to be finalized in March. It would mark the transit agency’s third TIFIA loan.” [Sub required]
 
15) Kansas: Larned State Hospital director resigns as lawmakers take up a bill that many fear will lead to the privatization of the state hospital system—allowing a for-profit contractor to hire and fire staff. “Current law requires the commissioner of community services and programs to name a superintendent for each hospital. The legislation would move that power to the KDADS secretary. The appointment of a superintendent would become optional, unlike current law. The legislation also holds out the possibility the appointment of a superintendent, who would not be part of the civil service system, could be contracted out.”
 
16) LouisianaThe Orleans Parish School Board will take up a controversial new funding formula this week. “The proposed funding method, which has divided school leaders, would shift more dollars to pay for students with special needs and cut some funding assigned to so-called ‘gifted and talented’ students. Two of the city’s selective-admission magnet schools, Lusher Charter School and Lake Forest Charter Elementary School, have promised to sue if the formula is approved.”
 
17) Maryland: “Determining if the Purple Line contract is a good deal isn’t easy,”  says the Washington Post. “There on Page 481 was the formula that the Maryland Department of Transportation plans to use to calculate its monthly payments to a private contractor. The formula: MAPn = MAPGn + (MAPOn x ESCOn) + (MAPMn x ESCMn) + (I x ESCGn) + LCPn — ΣD + PSGS + QVA.”
 
18) Massachusetts: Aaron Leibowitz looks at the decades-long experience of Salem with charter schools. “There are other road blocks, too. Almost all charter schools are non-union, and the longer school days and school years that distinguish many of them are extremely difficult to implement in a unionized setting. Medford Superintendent Roy Belson has yet to find much inspiration in the charter sector. ‘Besides a longer school day, what innovation have charter schools provided?’ Belson said, arguing that money diverted to charters would be better spent helping district schools improve early childhood education, technology, substance abuse prevention and social/emotional health. ‘Why would we not invest in those things first?’”
 
19) Massachusetts: The New Bedford School Committee is opposing lifting the cap on the number of charter schools. Funding is a key issue. “‘I do not think there should be more in the district,’ said Chris Cotter. ‘It does take funding away from other public schools in the district.’ Ward 3 City Councilor Henry Bousquet sought for the City Council to write a letter opposing lifting the cap, but other councilors tabled his proposal last fall. ‘I don’t believe it should be lifted,’ Bousquet said. ‘If they’re going to do it at the state level, we need to fix the funding formula.’”
 
20) MississippiNine private charter school operators propose opening 14 new charters in the state. On Friday the Charter School Authorizer Board announced that 11 of them were proposed for the Jackson school district. “Groups that have never run charter schools before propose to open them in Drew, Jackson, Newton and Tunica.”
 
21) NevadaMembers of the Regional Transportation Commission of Southern Nevada take a road trip to Denver to see how that city has planned its transit system. They are exploring “several funding options that Denver used, including seeking out federal grants—Denver got $1.1 billion—public-private partnerships that operate the system and possibly approaching voters to consider special tax districts or bond proposals.”
 
22) New JerseyAtlantic City fights back against efforts to turn its water utility over to a for-profit corporation or the county. “The last thing we want to do is privatize the MUA,” City Council President Marty Small said. “It is in the residents’ best interest that the MUA become a city department to avoid privatizing and raising the rates. This is something we can control. (…) The consensus is to bring it under the city. When citizens have spoken, 100 percent of the time they say, don’t privatize the MUA. With all due respect, the private-public partnership would lead to privatizing it.”
 
23) North Carolina: Gov. McCrory instructs the transportation department to reassess contracts with the Cintra-led consortium building the I-77 ‘public private partnership’ express lanes in light of the bankruptcy of Cintra’s SH-130 concession in Texas (see below). “It is unclear how the public-private partnership agreement could be re-assessed since the project reached financial close in May 2015 and construction began last November.” NCDOT asserts that a similar bankruptcy would not impact state finances. [Sub required]
 
24) TexasSH-130, the first toll road to be delivered as a ‘public private partnership’ in the state, goes bankrupt. It was a 50-year concession. “According to the US Department of Transportation’s Build America Transportation Investment Center (BATIC), revenue levels generated by SH-130 were more than 60 percent below the original forecast for the highway.” Taxpayers may be on the hook for the federal TIFIA loans that supported the project. [Sub required]
 
25) International: Australia’s parliament passes legislation permitting the privatization of the Port of Melbourne, with no restrictions on foreign bidders and a compensation provision if another port is built that competes with the existing port before 15 years. “After threatening twice to sell the asset through the State Owned Enterprises Act, the government backed down and agreed to the 15-year clause.” The facility is Australia’s largest shipping container terminal.
 
26) Upcoming Conference: The Network for Public Education will be having its annual conference April 16-17 in Raleigh, NC. “Aligned with the theme, And Justice for All: Strengthening Public Education for Each Child, keynote speakers and workshop presenters will tackle the challenges facing our students and schools as we all work towards achieving a more just system of public education in America.” Speakers will include Diane Ravitch, Rev. William Barber, Bob Herbert, and others.
 
Legislative Issues
 
1) NationalCashing in on Kids warns that ALEC education legislation is being pushed through the states, citing Center for Media and Democracy research. “Despite widespread public opposition to the corporate-driven education privatization agenda, at least 172 measures reflecting American Legislative Exchange Council (ALEC) model bills were introduced in 42 states in 2015.” [CMD report]
 
2) National: A new bill has been introduced to make Congressional Research Service reports public. The Project on Government Oversight (POGO) reports that the bipartisan legislation is backed by a coalition of 40 civil society organizations, libraries, think tanks, and other groups. [Coalition statement]
 
3) Connecticut: Lawmaker, citizen activists, and environmentalists come behind legislation to block “a deal between the town of Bloomfield and the Niagara Bottling Company that will allow up to 1.8 million gallons per day to be withdrawn from the Farmington River watershed, a water source controlled by the MDC that provides drinking water to 12 towns.” Anne Hulick, the state director for Clean Water Action, says “we are deeply concerned about how water is managed by the MDC and concerned about any attempt in the state to privatize and sell Connecticut’s water.” [SB 422 text and public hearing testimony]
 
4) FloridaLawmakers send a massive “school choice” bill to Gov. Scott. “As part of a last-minute deal, the House rejected efforts by the Senate to crack down on businesses using state capital dollars to profit from charter schools, which are publicly funded but privately managed.”
 
Florida 2016 legislative session roundup

 
Alternate sentencing: Creates a new program to allow defendants to avoid prison time for technical violations of probation);
 
Juvenile detention: Requires a 50-50 split of juvenile detention costs between counties and the state and requires counties to drop previous legal claims against the state); Immigration: A bill fails that would have it a felony to re-enter Florida after being deported by immigration officials); 
 
Charter schools: Changes capital funding eligibility for charter schools and spending limits for traditional schools; allows public school students to attend any school in the state that has space available; increases financial transparency of charter schools; allows high school athletes to transfer schools and have immediate eligibility; codifies in law performance funding for state colleges and universities; among other provisions);
 
Charter schools: A bill fails that would have put on a 2016 statewide ballot a constitutional amendment seeking to create a statewide body to authorize, operate, control, and supervise all charter schools;
 
For-profit colleges: A bill fails that would have established a framework to protect students from fraudulent practices, improve graduation and accreditation rates and impose a follow-up plan when schools close;
 
Red Light Cameras: A bill fails that would have banned local authorities from using red light cameras at intersections.
 
5) IllinoisSweeping ‘public private partnerships’ legislation is introduced in the Senate. “The Public-Private Partnerships Act, introduced by State Senator Heather Sterns and co-sponsored by Senator Karen McConnaughay last month, would create a state-run Office of Public-Private Partnerships within the executive branch. Its aim would be to establish best practices and assist smaller government bodies around the state in managing their capacity for procuring P3s. The bill would allow any public agency, with approval from the office, to enter into P3 agreement with any private entity ‘for improving transportation assets, public buildings, public services, or other public assets.’” [Sub required]
 
6) Louisiana: As the special legislative session ends, budget shortfalls still loom. “The Legislature and the governor still need an additional $50 million to close the gap in the state budget that lasts through June 30. And they have an $800 million hole in next year’s fiscal cycle.” Lawmakers are still hoping to make the “five entities that manage Louisiana’s Medicaid program pay more. But that money requires the federal government to approve higher rates, so Edwards and the Legislature can’t rely on it coming in at this point.”
 
7) Michigan: The Petoskey News-Review reports on budget proposals that would impact mental health services in the state. “So what exactly are politicians doing for mental health? So far in 2016, Gov. Snyder has proposed in his 2017 budget to change the way mental health programs in Michigan are funded. Snyder’s $54.9 billion proposal for state spending in the coming year transfers $2.4 billion in Medicaid funding for community mental health services to Medicaid health plans. Essentially, he has proposed to change the plans to private HMOs.”
 
8) New Jersey: Senate president Stephen Sweeney (D) opposes legislation that would restrict Horizon Blue Cross Blue Shield of New Jersey from selling a new line of discounted health plans, which hospitals have opposed. A senate committee is scheduled to debate legislation on the issue today, and Sweeney is expected to testify. “Prior to the hearings, five state lawmakers held a press conference calling for the state to ‘freeze’ OMNIA policy availability during the next open enrollment period. The lawmakers were Sen. Raymond Lesniak (D-Union), Assemblymen John Wisniewski (D-Middlesex), Assemblyman Jamel Holley (D-Union) Reed Gusciora (D-Mercer) and Assemblywoman Elizabeth Maher Muoio (D-Mercer).” Sweeney is expected to run for governor next year.
 
9) OhioLawmakers consider legislation that could partially privatize the workers compensation system. “The Property Casualty Insurers Association of America said in a statement it is watching the bill. PCI sees the bill’s prospects as suspect because no broad support exists among state leaders in Gov. John Kasich’s administration or the state’s business community for a private workers’ compensation option.” [Sub required]
 
10) Virginia: The General Assembly session ended Friday night. Among the highlights: “Lawmakers narrowly defeated legislation that would have put a charter school amendment to the Virginia Constitution before voters in November. The measure would have let the State Board of Education approve charter schools — currently, only local school boards may do so.” Also, budget legislation now requires legislative approval for most road tolling, “with some exceptions, such as plans for relieving congestion on Interstate 66 in Northern Virginia.”
 
11) Washington: Cracks emerge over whether Gov. Inslee (D) will sign a charter school funding bill.   

 

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