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Weekly Privatization Report 11-27-2017

1) National: For-profit colleges are continuing to exploit veterans despite efforts by Congress, the Obama administration and state attorneys general to stop them. The Trump administration is making things worse. “Congress needs to stop the Education Department from dismantling rules that protect students generally, and veterans in particular, from exploitation.” says The New York Times, citing Veterans Education Success’ new report.

2) National: Speculation continues over when Trump will reveal his long-delayed infrastructure plan, which is expected to emphasize private financing of public works projects and incentivizing the sell off of public assets. He’s promising to release it after the tax reform battle is over. “However, White House tech policy adviser Reed Cordish said at an Internet Association conference that the administration currently has a detailed, 70-page memo of infrastructure principles. The White House document, which is still being finalized, will be submitted to Congress and serve as a building block for lawmakers to draft an actual legislative package, Cordish said.”

3) National: Veterans Administration head David Shulkin tells the Wall Street Journal he wants the agency to compete with the private sector. “His view on the future of the VA resembles that of the politically conservative Koch brothers, who recently announced they are launching a major effort to reshape the future of the nation’s largest health-care system,” says the WSJ. “The Congressional Budget Office has estimated that extensive outsourcing of veterans care to the private sector would balloon budgets at the VA by tens of billions of dollars.” [Sub required]. House Minority Leader Nancy Pelosi said in response to Shulkin’s remarks that “the Koch brothers must not be allowed to realize their goal of dismantling our veterans’ and service members’ health care, forcing them to pay out of pocket for the benefits they have earned with their heroism.”

4) National: Two more ICE detainees at the CoreCivic-operated T. Don Hutto Detention Center For Women say they were sexually harassed. “Grassroots Leadership is not naming the guard, but the organization said she was one of two guards previously accused of sexually assaulting an immigrant from El Salvador currently being held at T. Don Hutto. That immigrant, Laura Monterrosa, came forward with the accusations earlier this month.”

5) National/New Mexico: “Across the West there is a raging storm. That storm is privatization,” writes John Crenshaw, board president of the New Mexico Wildlife Federation. “State legislatures and courts are turning over centuries of law to hand our public lands, waters and wildlife to powerful, moneyed interests. In the world of water, the issue here is whether a landowner can block anglers’, boaters’ and other recreationists’ access to a stream—more specifically, to streambeds where they flow through private land.”

6) National: Writing in a forthcoming issue of The New Republic, Diane Ravitch takes on the negative effects of standardized testing. “Supporters of privatization appreciate the testing regime because every year it produces failing schools, the bottom 5 percent that can be closed and handed over to entrepreneurs and charter chains. (…) Education is a developmental process, a deliberate cultivation of knowledge and skills, a recognition of each child’s unique talents, not a race.” [“Settling for Scores,” New Republic, Jan/Feb2018].

7) National: Is for-profit ridesharing coming to the school bus world? “Student Transportation Inc. (STI), the nation’s third-largest school bus operator, has taken a minority stake in an industry ‘disruptor’: HopSkipDrive, a rideshare service for children. STI announced on Tuesday that a subsidiary of its Managed Services Group (MSG) has closed on the strategic investment in Los Angeles-based HopSkipDrive.”

8) National/District of Columbia: George Washington University student Naseem Othman says the university “must take action to combat” the effects of privatized research funding on campus. “Leo Chalupa, the vice president for research, said while corporate deals help accelerate projects, officials often have to –‘protect’ researchers from entering a contract that could exploit the faculty member so the company can profit. When using corporate money for research, universities like GW should create and publicize a set of standard, strict and clear guidelines to preserve scientific integrity. These guidelines should include full disclosure of any and all conflicts of interest and full public availability of findings and research techniques.”

9) Arizona: Christi Driggs says don’t privatize our rest stops. “Rest stops now offer bathroom facilities and a chance to take a break from the bustle of the highway. There are pet areas and quiet picnic tables where humans can relax and recharge for a bit without hectic input. To replace this with vendors and asphalt, people backing in and out and fast-food wrappers flying in the wind would be awful and anything but restful. It would make our roadways less safe by far and our rest stops full of vagrants and litter. Please do not destroy these islands of relative quiet.”

10) Arizona: Gilbert is keeping tourism services in-house. The Town of Gilbert wants to improve its tourism potential by ramping up administrative and advertising capacity. “As for hiring a full-time tourism administrator, the idea is to build the department from the ground up instead of contracting out the work. Tourism Administrator Glenn Schlottman is overseeing that effort, implementing tourism campaigns that target various markets.”

11) California: By investing in a partially bond-financed piece of new equipment, Oakland will be able to speed up road repairs, move more work in-house, and cut down on outside contracting. “While the city was dealing with the last machine’s issues, many paving projects were taken on by contracted crews, Russo said. Though the Department of Transportation plans to continue contracting out some paving work, more of it will be done in-house, thanks to the new equipment and the hiring of 20 more workers with money from Senate Bill 1—the state’s new 12-cents-per-gallon tax on gasoline.”

12) Illinois: Will another round of public school closures pave the way for more charter schools in Chicago? “Since 2013, a total of 39 new schools serving 16,000 students have opened, and 29 of them serve high school students. This includes several new charter high schools and 15 alternative high schools for dropouts. Those alternative schools are mostly in neighborhoods with the most severely under-enrolled high schools.”

13) Indiana: Indianapolis, a “hotbed of privatization,” is on the verge of losing its public, local, community-based schools. “The latest addition to the privatization toolkit is ‘unified enrollment.’ When parents begin to look for a school placement, there is no neighborhood school, no zoned school. Instead, they look for a school on a list that combines both charter schools and public schools, each of which is identified by their offerings or specialty. Thus, consumerism is firmly established, and charter schools are turned into the equivalent of public schools, even though they have private management and may operate for profit.”

14) Iowa: Blog for Iowa has shared a hard hitting video by Senate Assistant Majority Leader Joe Bolkcom (D) on how Medicaid privatization in Iowa, which he says is the worst in the country, is threatening low income and working families. The Iowa Department of Human Services has admitted that “more than a third of patients in Iowa’s privatized Medicaid program will be unable to switch into one of the two remaining insurance companies as originally announced because the company doesn’t have the capacity to add more people. (…) The Iowa DHS said in a press release that Amerigroup will continue to serve people currently enrolled in its coverage but not additional patients. The announcement means UnitedHealthcare will keep about 215,000 patients being sent to it after a third company, AmeriHealth Caritas, said it was leaving the health care program for the poor and disabled.”

15) Kentucky: The Lexington Herald Leader says the use of a for-profit company to house offenders is a sign of failure.  “Kentucky cannot afford to keep locking up so many people. We can’t afford the cost, now almost $600 million a year. And we can’t afford the waste of human potential, including the harm to children when parents are incarcerated.” The state’s announcement that it will employ CoreCivic to house 800 prisoners “signifies the legislature’s failure to enact reforms that can reduce both incarceration and crime. It also signifies the failure of judges and prosecutors to embrace alternatives to imprisonment.” Largely because of opioid addiction, “the state’s prison population has mushroomed by more than 4,000 in the last four years to 24,367. Kentucky houses many low-level felons in severely overcrowded county jails with little to no access to treatment, education or rehabilitation.”

16) Kentucky: Murray State University is sending out a refurbished RFP for outsourcing its health services. “The Board of Regents isn’t stopping at Health Services for possible outsourcing options, either, naming off housing and dining as two possible points of exchange between administration and a private firm. This is being examined in the wake of a year filled with turnover for Dining Services, so far losing a head chef and a director. Currently, the university has hired a consultant as a short-term fix, albeit a more expensive one.”

17) Louisiana: In “Faking the Grade,” The New Orleans Tribune critiques the myth of charter schools and calls out the deceptions of their promoters. “The so-called education reform movement that has held our city captive for 12 long years has been faking the grade this entire time. And we are angry and saddened that few of our so-called leaders have had enough conviction of character to dare to stop it. Many have been complicit even as they return to us every two or four years asking for our votes.”

18) Massachusetts: Three contractors have filed a class action lawsuit against the state, claiming they have been deprived of the equal protection of the law because they are barred from enjoying the same benefits and protections as other state employees. “It’s as if I’m a second class employee,” says 27-year veteran DEP worker Michael McHugh. “State Attorney General Maura Healey has rejected their demands and has asked the court to dismiss the case. Healey contends that the contractors lack the standing to sue because the state has ‘sovereign immunity’ from such claims, meaning that a private party can’t take state agencies to court unless there’s a specific waiver in the law. Stefan Jouret, a Boston lawyer representing the plaintiffs, disputed that argument in a 36-page response he submitted to the court last week. ‘The damage here to class members is immense, and justice requires that they be allowed to have their day in court,’ he said. ‘The doctrine of sovereign immunity is an outdated concept that is fundamentally unconstitutional.’ (…) Healey is functionally endorsing the privatization of public-sector jobs.”

19) Missouri: The question of school privatization vs. public schools has become a local control issue, even for conservative districts, and was in the political mix as the state school board deadlocked last Tuesday over firing the education commissioner. “Patty Quessenberry, president of the Ozark Board of Education, said she believes the governor’s push to remove Vandeven is part of a political agenda—that it could grow into a bigger push for charter and private schools over public schools—because she has seen Vandeven help a number of public schools.”

20) Montana: Gov. Steve Bullock (D) has vetoed a bill that would have forced the state to give CoreCivic a 10-year contract in exchange for freeing up $30 million of the state’s own money.

21) New York: The MTA has hired the former CEO of the Toronto Transit Commission, Andy Byford, to be its head. “There were also controversial measures he brought to the TCC, such as a test run of one-person train operations, contracting out cleaning work and random drug and alcohol tests for safety-critical positions, including executives such as himself.  Byford said those measures were needed to turn around transit in Toronto, though they would not necessarily be a fit for New York.”

22) New York: The political battle over the proposed privatization of Westchester County Airport to Macquarie remains unresolved as the newly elected county executive opposes the deal. “Jonathan Wang, an organizer with Citizens for a Responsible County Airport, a watchdog group, said he had been tapped by Latimer to serve on the incoming county executive’s transition committee. ‘George has made very clear that he does not intend to privatize the airport,’ Wang said.”

23) Pennsylvania: Chester County residents and staff of the public Chester Water Authority are waging a vigorous struggle against Aqua America’s efforts to take control of the system. “‘This company is a predator,’ water customer Joe DiMarco said at Tuesday’s authority board meeting at Neumann College in Aston. He cited rate hikes and profit margins Aqua has requested  and gotten  from the Pennsylvania Public Utility Commission in other towns where it has taken over water systems. (…) ‘The deal, previously thought dead, has new life,’ utility analyst Ryan M. Connors wrote last week in a report to investor clients of Boenning & Scattergood in West Conshohocken after Aqua raised the offer anew at a meeting earlier this month.”

24) Utah: The Private Probation Provider Licensing Board has scheduled a meeting on occupational licensing for December 21 in Salt Lake City.

25) Texas: A fresh battle in the war over toll roads is shaping up in the Lone Star State, as a new coalition is formed to build public support for tolls—and veteran Tea Party anti-P3 and anti-toll activist Terri Hall warns that “they’re gonna be lonely on the wrong side of the toll issue.” The Dallas Morning News reports, “While Texans for Traffic Relief opposes higher taxes, it also is against doing nothing, [TTR spokesperson Dan White] said. He predicted inaction would force an eventual tax hike. State and federal gasoline taxes haven’t been increased in more than two decades. Inflation has sapped their purchasing power, road planners and highway industry leaders complain. Hall said the new group ‘will be representing the money boys.’” TTR is supported by the Greater Austin Chamber of Commerce.

26) International: The Ontario Federation of Labor’s strategic plan for 2018-2019 contains a firm commitment to support public services for survivors of domestic and/or sexual violence, and says OFL will “advocate, along with affiliates, labour councils, and women’s organizations, that all levels of government develop a comprehensive action framework to end violence against women in all forms with a focus on prevention, supports, and services—including ramping up pressure to increase funding for women’s shelters.” (p. 41)

The OFL plan also resolves to “build and amplify sustained opposition to the privatization of public assets in the provincial sector, including Hydro One, Ontario Lottery and Gaming, the Liquor Control Board of Ontario as well as Ontario’s health care, education, and infrastructure systems, by raising awareness—within and external to the labour movement—of its negative impacts, including its role in furthering the austerity agenda.” (p. 34)

27) International: CUPE fights for decent working conditions for domestic violence public service workers. “Despite attempts to intimidate them into accepting a deal that would degrade services at Ottawa’s only francophone women’s shelter, members of the Canadian Union of Public Employees (CUPE) at Maison d’amitié are determined to defend the vital services they provide to women and children who are fleeing violence.”

28) International: The Economist looks into what happened when Britain privatized its probation services. “The experiment has shown the difficulty in contracting out some public services,” says the magazine. “Joanna Williamson worries that she has become a box-ticker. She is a probation officer. But when chunks of the service were privatised in 2015, her bosses became more concerned with meeting targets that have little to do with helping former offenders. The number of cases she handles has soared and safety standards are slipping. The shift has taken its toll on morale. Many colleagues of Ms Williamson have left. She has an eye on the door.”

29) Think Tanks: Urban policy expert Richard Florida of the University of Toronto’s Martin Prosperity Institute says driverless cars will “do the opposite of what techno-optimists hope, and worsen—not ease—inequality.” He says, “rather than being used by a re-suburbanizing rich headed to far-flung luxury developments, driverless cars—or more likely, driverless busses—will extend the commuting range of blue-collar workers, service workers, and the poor.” All this while the ever-more-clogged infrastructure these vehicles will travel on is being privatized and making citizens “more like customers.”

30) From the local investigative newsblogs:

The Arizona Center for Investigative Reporting reports that Arizona is outsourcing some important legislative ideas. “Nearly identical legislation introduced in multiple states, or ‘model legislation,’ comes from national or regional industry associations, individual companies, or policy think-tanks and advocacy groups.” And there’s an analytical tool for finding it: “Using the tool, AZCIR analyzed bills proposed during Arizona’s 2016 session. Some of the results showed clear pieces of model legislation. In other cases, the results indicated bills that at least partially borrow ideas from other places.”

The Florida Bulldog has a story that should make in-house counsel at for-profit nursing homes that receive taxpayer dollars sit up and take notice. “Two years ago, Plaza Health Network agreed to pay the U.S. Department of Justice $17 million to settle a civil investigation that revealed the Aventura-based nursing home chain operated an illegal kickback scheme involving Medicare and Medicaid patient referrals. Now, Plaza Health is looking to recoup the money by suing its former general counsel and the prominent law firm he was a partner in for malpractice.”

Legislative Issues

1) National: Will the elimination of advance refundings, as proposed in the Republican tax bills, drive state and local governments back into risky interest rate swaps and other instruments? The Bond Buyer thinks so. “Halting tax-exempt advance refundings at the end of the year, as proposed by both pending tax bills, would increase issuers’ costs, deprive them of savings for new projects, and push some to enter into swaps that could increase their risk.”

2) California: The state is rushing to beat the passage of Republican federal tax legislation by issuing Private Activity Bonds to finance affordable housing. “‘The goal is to award all of the available money allocated for PABs,’ said Laura Whittall-Scherfee, who was named California Debt Limit Allocation Committee’s executive director in June. ‘So, if a tax reform bill passes that says PABs can’t be issued after Dec. 31, we have done everything we can.’”

3) Georgia: Proposed federal tax reform legislation will harm infrastructure investment in the state, the Atlanta Journal-Constitution reports. It “would eliminate the kind of bonds the University System of Georgia has used to build more than $3 billion worth of dorms, parking decks, dining halls and other facilities on campuses, and it would keep the state from saving tens of millions of dollars refinancing that debt. The Georgia Department of Transportation would lose a tool to help finance major interstate projects. Similar changes to the tax-free status of certain bonds used primarily for refinancing could make it harder for MARTA to find money for new projects as well. In addition, local officials are worried plans to eliminate the income tax deduction for state and local taxes would make it harder for cities and counties to sell new infrastructure projects locally.”

4) New Hampshire: A bill will been introduced on January 3 by Republicans in the state legislature to delete the limitation on public charter schools that required them to be in operation for five years before incurring long term debt. [NH HB1228 | 2018]

5) Pennsylvania: Pittsburgh Mayor Bill Peduto is opposing a Republican lawmaker’s plan to insert an additional layer of oversight of the Pittsburgh Water and Sewer Authority on top of the state Public Utility Commission. “The mayor fears that full state control would lead to privatization of this city asset, and he’s right to worry,” says the Pittsburgh Post-Gazette’s Brian O’Neill. “As poorly run as the PWSA has been, it could easily get worse in the hands of people whose chief concern is the bottom line. Veolia Water, a company hired to manage the PWSA from July 2012 through December 2015, did such a poor job that Mr. DePasquale saw its profit motive getting in the way of its obligations to customers. Councilwoman Deborah Gross also noted that Flint, Mich., was under state supervision when it started cutting costs by drawing water from the tainted Flint River.”

6) Maine/New Hampshire: The elimination of Private Activity Bonds under Republican tax reform legislation “would devastate not-for-profit sponsors of both life plan communities and affordable senior housing. Without tax-exempt bonds, these providers would no longer be able to raise funds to develop or renovate these kinds of properties. Waiting lists will grow and job growth supporting this sector (construction and direct care workers) will be reduced. Seniors seeking secure places to call home will have fewer choices and what choices remain will be more expensive.”

 

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