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Weekly Privatization Report 2-5-2018

1) National: The Trump administration is expected to release its long-awaited infrastructure plan today. CNN proposes some key questions, and here are a few more: How big will it be? How much new federal money would be in the plan, how much private financing? How would the money be split up (intermodal, water, buildings, transit, highways? Rural vs. urban?) Who will decide on project approvals? Will Congress be cut out? How will proposals be vetted? By whom—cozy industry insiders or neutral qualified auditors? Will it require rigorous, or counterfeit, value for money analyses? Public sector comparators? Will the costs of private financing be transparent? Transaction costs? What else might the plan do (litigation limits on permitting, or local hire; environmental standards)? How would the plan be paid for? And perhaps most importantly, what are its legislative prospects and what might a bill look like after it goes through the House, Senate, and White House negotiations?

State and local leaders are bracing for an infrastructure financing and funding hit. The Bond Buyer reports, “a leaked outline showed the plan reverses the traditional formula for certain competitive grants with a 20% rather than 80% federal share awarded to governments. That’s problematic for many state and local officials who are accustomed to having the federal government pay 75% to 80%. ‘Dropping the federal share is short-sighted and doesn’t make sense,’ said Mayor Steve Benjamin of Columbia, S.C. and vice president of the U.S. Conference of Mayors. ‘We are carrying our fair share,’ said Benjamin, who also chairs the Municipal Bonds for America coalition. ‘Seventy-five percent of all infrastructure investment now is coming from local and state governments primarily using tax exempt muni bonds.’”

2) National/Colorado: In a major legal victory for 62,000 immigrant detainees held in a GEO Group facility and forced to do manual labor for minimal wages, a federal appeals court has ruled their case can go forward. “The lawsuit, which was originally filed in 2014 on behalf of nine individually named plaintiffs, seeks more than $5 million in damages for as many as 62,000 detainees who performed sanitation chores like cleaning toilets without pay over the past decade. The lawsuit also accuses GEO, which runs numerous detention facilities and prisons across the U.S., of unfair enrichment at the expense of 2,000 detainees paid $1 a day for work such as preparing food and doing laundry during the past three years.”

Boulder attorney Brandt Milstein, one of several attorneys representing the plaintiffs, said, “I think the most important message we get from the Tenth Circuit is that the detainees who brought this case, and who were forced to work under the threat of solitary confinement, and who were paid a dollar a day for their labor, have strong claims.” David Lopez of Outten & Golden, a law firm that represents the class, said “this ruling shifts the power from a huge corporation to vulnerable detainees. With that power, detainees will be able to challenge long-standing practices that have allowed GEO to exploit detainee labor while pocketing taxpayer dollars.”

3) National: The budget deal signed last week provides that infrastructure spending will increase $10 billion in the current fiscal year and another $10 billion in the 2019 fiscal year beginning October 1. Sen. Chuck Schumer (D-NY) said in a Senate floor speech that the $20 billion would “augment our existing infrastructure programs, including surface transportation, rural water and wastewater, clean and safe drinking water, rural broadband so desperately needed in large parts of rural America, and energy infrastructure.” Details of how that money will be apportioned are left to the House and Senate appropriations committees. A coalition of state and local government officials said last week that they are seeking “the correct balance between federal, state and local investments and private sector partnerships.” [Sub required]

Governing magazine says the $20 billion set aside by McConnell and Schumer is “a fraction of the $200 billion over 10 years Trump has previously outlined. That has led some to chastise parts of the deal as mere gestures, rather than real action. ‘We’re a long way with this bill for claiming we’ve done something about opioids and infrastructure,’ says G. William Hoagland of the Bipartisan Policy Center.”

4) National: A yearlong investigation by Michael Blanding of Heavy.com finds that “privatized water management has been a disaster for American towns, with residents paying 59 percent higher fees for water, on average; suffering high-profile health problems; and bracing for an infrastructure time-bomb. Residents of contracted towns, from Indiana to Florida, are commonly paying almost $200 more each year, while some Eastern cities have found life-threatening lead in tap water as part of the wreckage left from their contracts. And it’s set to get worse, with both the Trump administration and numerous local authorities pushing to privatize, despite the devastating number of failures.”

5) National: Rudy Gonzalez of Teamsters 856 talks about charters, privatization and education, and on service workers being blocked from organizing in charter schools. “We’ve got to organize on a regional level.” He says the housing crisis is “the number one issue” facing workers right now, eating up the benefits they gain by struggling for better contracts. “We have to look at community benefits agreements. We’ve got to get responsible developers.” [Video, about 4 minutes]

6) National: In the Public Interest’s Jeremy Mohler highlights the vital importance of public libraries for local journalism and community engagement. “In November, we lost Gothamist (and its sister sites, like DCist) after its billionaire owner balked when its journalists tried to unionize. Later that month, LA Weekly was purchased by a group of conservative-leaning private investors who then laid off much of the paper’s staff. That’s why I was floored by the recent story of a public librarian in New Hampshire launching his own weekly paper. The paper, which he began producing and printing at the library after a community paper shuttered, has been an instant success: more people are showing up to the town events he advertises, and local officials are now emailing him news items.”

7) National: Despite a $1 trillion need for water infrastructure repair and construction, the private sector is struggling for acceptance and growth, reports Infrastructure Investor. The article looks at the Bayonne and Rialto PPPs, discusses rate politics and labor differences between public and PPP systems, and fragmentation issues. “Bundling, or combining multiple systems into one deal, is a possible solution on investors’ radars. But given the difficulty of getting a PPP deal in place for a single utility, the complexity of a bundled deal covering multiple assets can be prohibitively daunting.” [Sub required]

8) National: “There he goes again,” says NRDC’s Scott Slesinger about Trump’s claim that it takes 10 years to get environmental approvals for infrastructure projects. Trump uses the claim regularly as a reason for gutting environmental regulations, especially NEPA as they apply to projects. “But—spoiler—there is no such evidence, anecdotal or otherwise, as the Congressional Research Service confirmed. After all, 96 percent of federal highway projects have only minimal or no environmental review before they proceed; of those complex projects requiring the full analysis, the average time for a permit is 4.7 years, according to the White House’s own infrastructure adviser. Even that’s overblown.”

9) National: The new Trump/GOP tax bill is subtly subverting public education, reports Clint Smith in The Atlantic. “Families can now use 529 college-savings plans to pay for private K-12 schooling, allowing them up to $10,000 in tax-free withdrawals per child annually. This new provision effectively operates the same way a voucher program would, but without the name: While vouchers distribute funds directly to parents to pay for private school, the new law uses the tax code to facilitate private school attendance.”

10) National: The GEO Group will hold its earnings call this Wednesday, February 14, at 11AM ET. The earnings release is before market open the same day at 8AM. CoreCivic will release its earnings results on February 14 after market close, and will hold its earnings call the next morning, February 15, at 11AM ET.

11) NationalMarketWatch reports that one company will handle close to half of all student loan payments. “Nelnet has prepared for that for years, acquiring companies, including FACTS, a firm that helps private and religious schools process tuition payments. That division is poised to grow if Secretary of Education Betsy DeVos gets her way and is able to expand so-called school choice programs that send government dollars to private schools.”

12) National: As the Trump administration promises to direct more funding to for-profit prisons, it is slashing jobs in the federal prisons and creating security and safety risks. “We haven’t hired anybody in over a year,” says Louis Davis, the President of the American Federation of Governing Employees Local 3976. “What WTOC found in this decision-making is interesting. After digging through the Bureau of Prisons 2018-2019 budget report, their committee strongly recommends additional staffing. They expose the inmate to correctional officer ratio and admit it is unsafe for both the inmates and the staff. It goes on to recommend an immediate correction.”

13) National: Dr. Kate Antonova says “for those who don’t know the reason university press books are so outrageously expensive and scholarly articles are behind outrageous paywalls: this is the result of yanked public funding (removing subsidies) and privatization for-profit middlemen running the journal databases).

14) ArizonaFox News’ Tucker Carlson talks about red light cameras with Republican state representative Travis Grantham, who wants to ban them. “One of the biggest problems I have is this privatization of law enforcement where you’re incentivizing this for-profit company to issue more and more tickets to people,” says Grantham. Redflex, an Australian company, is big in Arizona. [Video, 2 minutes]

15) California: Aspire Public Schools, one of the largest charter chains in California, is looking at dropping out of CalPERS, possibly damaging the public employee pension fund. “‘At some time, if they become 20, 40 percent of the public schools, that could cause a serious shortfall in the pension systems,’ said Dave Low, president of the California School Employees Association, the union that represents classified public school workers. The California Federation of Teachers in 2012 sponsored a bill that would have required charter schools to offer retirement plans through CalPERS and CalSTRS. The California Charter Schools Association opposed the bill, arguing that charter schools needed flexibility in setting their finances.”

16) California: Teachers and parent are blindsided by the sudden closure of Paramount Collegiate Academy in Sacramento. “‘It’s frustrating, I didn’t just work here I also had four of my children were students here,’ said Jed Christian, a parent and teacher at the school. Parents began looking for transcripts and were trying to get their kids transferred to new schools. Teachers were waiting for stipends and belongings from their classrooms.”

17) District of Columbia: A charter school entrepreneur plans to open an elite private school in DC, the Washington Post reports. Chris Whittle’s global plans call “for a rollout of 36 campuses in 15 countries within a decade.” Whittle “serves on the boards of Friendship and of the Center for Education Reform, which supports charter schools, private school vouchers and educational choice.” His new Cayman Islands-registered private school, which is going to focus on “personalized instruction” and frowns upon “educating groups of children” as the (cash strapped) DC schools do, will have a tuition rate of around $40,000, says the Post. Funds per student in the DC schools range from $6,569 per year to $11,828.

18) Florida: School privatization has become an issue in the governor’s race. In a press release, Democratic candidate Gwen Graham has denounced Speaker Richard Corcoran, a potential Republican candidate, “for pushing legislation that benefits a family lobbyist and corporate donors.” The Florida Education Association has also accused Corcoran of supporting legislation to divert funding from public to private schools, though PolitiFact Florida says the claim needs “more context.”

19) Georgia: Atlanta takes a step toward reforming its notorious cash bail system. Cash bail systems have been criticized around the country for promoting profit and for facilitating the criminal justice system’s provision of unequal protection of the law to poor people. Some groups are organizing revolving funds and others are pushing for abolition.

20) Hawaii: A public hearing on the closure of a Big Island charter school turns heated. “The state Public Charter School Commission organized the community gathering about Ka’u Learning Academy to explain the ‘notice of prospect of revocation,’ the first step in the process of revoking the school’s charter.”

21) Idaho: The Department of Corrections is to send 250 inmates out of state to a facility operated for profit by the GEO Group, Karnes County Correctional Center in Texas. “The inmates will remain at the Karnes County Correctional Center until the Idaho Department of Correction executes a long-term contract for the incarceration of up to 1,000 inmates at an out-of-state facility and the facility’s beds become available. The department’s contract request is for up to 1,000 beds for up six years. The department expects to have a contract finalized by March 17, 2018.”

22) Indiana/National: The American Association of University Professors (AAUP) is organizing an anti-privatization campaign against Purdue University’s acquisition of the for-profit Kaplan University, which would be exempt from Indiana’s public open records law under a move by its Republican governor, Eric Holcomb, even though it is a public university. AAUP says the Purdue-Kaplan deal puts Kaplan shareholders over Purdue students, takes resources from a public university and gives them to a private corporation, slashes job security, tenure, and shared governance, undermines local campuses and Indiana communities, and pushes the public into a contract with an unethical corporation. Sens. Dick Durbin and Sherrod Brown have warned that “Indiana taxpayers risk becoming owners of a predatory for profit college.”

23) Indiana: Transfers out by students are hurting Vigo County schools. “Of those 751 students, 246 attended a traditional public school in another district, by parental choice. (…) Another 323 attended a public charter school, primarily online charters such as Indiana Connections Academy (106 students), Indiana Virtual School (83 students) and Indiana Virtual Pathways Academy (61 students). Also, 164 students attended a non-public school and used state-funded vouchers, including 150 at St. Patrick’s School and 12 at Terre Haute Adventist.”

24) Maryland: Red Emma’s, the worker cooperative behind the restaurant, coffee roaster, bookstore, and community events space at 30 W. North Avenue, Baltimore, is hosting a discussion of Noliwe Rooks’ Cutting School: Privatization, Segregation, and the End of Public Education. Friday, February 23 at 7:30. The event is co-sponsored by the Baltimore Movement of Rank-and-File Educators (BMORE), a diverse group of educators committed to advancing quality public schools and the labor movement.

25) Michigan: In a major victory for organized labor, prisoners rights, and public interest campaigners, Gov. Rick Snyder (R) has finally caved in and will terminate private food services contracts for the state prison system. This is the second time a privatized food service contract in Michigan has been terminated in recent years. Snyder took the step “after years of maggots in food, smuggling by kitchen employees, kitchen workers having sex with inmates, inadequate staffing levels and other problems documented by the Free Press in a series of articles.” Snyder spoke “as union protesters from the Service Employees International Union gathered in the Capitol rotunda and tried to drown him out with chants of ‘Tricky Ricky,’ asked for $13.7 million to move back to state workers running the prison kitchens. Snyder called the privatization effort an area where ‘we haven’t been successful.’ (…) Nick Ciaramitaro, legislative director for American Federation of State, County and Municipal Employees Council 25, whose members used to staff the prison kitchen, said many of the more than 300 former workers have moved on to other jobs or retired, but he expects there will be a core workforce available to train new hires.”

Governing magazine reports that “incarcerated people are six times more likely to contract foodborne illnesses than people on the outside. Across the country, prisoners complain of hunger, sometimes intense enough that it drives them to eat toothpaste and toilet paper.”

26) Minnesota: Defend Glendale fires back at efforts by the Minneapolis Public Housing Authority (MPHA) to discredit their anti-privatization campaign to shield affordable housing. “Privatization of any Minneapolis public housing, Glendale or otherwise, is unacceptable,” they say. “While releasing Glendale from DOT protections might not be on this year’s docket, MPHA conveniently omitted that its request to HUD potentially would allow it to do so in later years without explicit HUD approval. If these DOT releases are granted by HUD, any and all MPHA properties could be privatized in the years to come. MPHA’s claim that its request for DOT releases is just to make its buildings more ‘energy-efficient’ and to ‘help meet the city’s climate change goals’ is undercut by the fact that it has already made numerous eco-friendly upgrades to properties with DOT protections still in place.”

27) New York: State education officials have filed a suit to block charter schools from certifying their own teachers. “‘The consequences of the regulations will be profound and far-reaching as they will impede equity in access by all such students to quality teachers,’ says the lawsuit, which was filed on behalf of the state Board of Regents, Regents Chancellor Betty Rosa, the state education department, and state education Commissioner MaryEllen Elia.” The NAACP is seeking to join a union lawsuit oppose the new self-certification regulation.

28) Ohio: Progress Ohio Executive Director Sandy Theis think Ohio’s charter school scandal “is really, really bad for Republicans.”

29) Puerto Rico: Attorney Anoa Changa spoke to Michael Brooks about her recent trip with a grassroots reconstruction and action group to Puerto Rico. “Disaster Capitalism, Privatization and the Looting of Puerto Rico.” [Video, about 24 minutes]

30) Puerto Rico: Arturo Massol-Deyá of the University of Puerto Rico-Mayagüez explains why privatizing Puerto Rico’s power grid won’t solve its energy problems. “Places like Costa Rica, Germany and Hawaii have either achieved or are building renewable grids that makes good use of sunshine, water, wind and biomasses like wood. Puerto Rico has plenty of those resources. But embracing renewable power requires government commitment. Instead, Gov. Rosselló seems to be backing out of the Puerto Rican energy game, leaving the island’s energy future at the mercy of private capital. In its desire to privatize and deregulate, Rosselló’s administration looks to be in lock step with Donald Trump, the U.S. president who doubts climate change and loves coal mining.”

31) Texas: The effort by Empower Texans to get public school teachers to snitch on their colleagues and make public education look badspectacularly backfires, as teachers tweet about all the wonderful things dedicated public educators do. The campaign by the right wing group was a clumsy attempt to piggyback off the head-scratching recent claim by Texas Attorney General Ken Paxton that voter education and turnout efforts by school districts don’t serve any “educational purpose.”

32) Texas: Lt. Governor Dan Patrick (R), of whom the Austin Chronicle’s Mary Tuma said “there is no other state official as vocally bigoted, sexist, and inhumane,” is being challenged by a pro-public education Republican in the primary for the Lt. Governor’s race, Scott Milder. John Kuhn says “Lt. Gov. Dan Patrick made vouchers & privatization of public schools his #1 issue for years. Now he’s opposed in the R primary by the most ardent public school supporter in TX. Desperate Dan has spent over $5m on ads. Has billionaire $ to spend, but @smilder has teacher votes.”

33) International: Water privatization in Australia has been successfully beaten back by public interest activists and electeds, but the industry hasn’t given up trying. “Despite all its privatisation experience, water and wastewater services are generally seen as a sensitive sector in Australia, notes Parvathy Iyer, a Melbourne-based senior director of infrastructure at S&P Global. With state governments concerned about any socio-economic impacts from privatising water utilities. In Australia, the private sector has been more active in the development of desalination plants, which were delivered under the PPP model about 10 years ago. Outside that, though, private-sector activities have been limited to contracting arrangements for new-build projects.”

34) International: Last year, a coroner in Australia denounced the GEO Group for “the excessive pain Mr. Howlett endured, making his final weeks ‘tortured’ and ‘full of despair.’ (…) The 49-year-old had previously been diagnosed with lung cancer, HIV, peripheral vascular disease, chronic nausea, depression, anxiety, insomnia, gastro-oesophageal disease and hypercholesteromia. But while in jail, he was weaned off his pain relief, his cancer treatment was not continued and he never saw a psychiatrist.” Ten months later, “human rights advocates say nothing has changed.”

35) International: Veolia is to slash nearly 40 jobs following the outsourcing of trash collection in Croydon, Britain.

Legislative Issues

1) National: House Democrats have called for a $1 trillion federal investment in infrastructure. “‘The federal government is a necessary partner in this effort to rebuild our country. It’s not enough to punt this to the private sector, as the president wants,’ said Rep. David Cicilline (D-RI). ‘Rebuilding our country will require a serious smart investment of real federal resources to get this work done.’ The blueprint pushes for a stronger federal investment in various infrastructure programs, including energy, airports, schools, water and roads. It also calls for the use of U.S.-made materials like iron and steel, in addition to green materials. The $1 trillion direct federal investment in the Democrats’ plan is a steep increase from the $200 billion of federal seed money the Trump administration is expected to kick in for a rebuilding initiative.” [Video of press conference, about 40 minutes. Summary. Also see the more extensive “blueprint” document released by Democrats in January 2017].

2) Arizona: The sudden closure of a charter school in Goodyear has prompted calls for stricter oversight of charters in the state. “‘The financial oversight that we provide for district schools should be the same that we provide for charter schools,’ said Arizona Education Association president Joe Thomas. The AEA called on lawmakers Tuesday to consider a suite of charter school reform bills that have been introduced by Democratic legislators but have yet to be given committee hearings.’”

3) Connecticut: The combination of Connecticut’s aging infrastructure and immediate transportation funding crisis casts doubt on the Trump administration’s plan to rely on state and local financing to support a national infrastructure program. The state is having a very hard time coming up with money to repair its existing roads. The 25-cent gas tax hasn’t been increased in two decades. Hartford is struggling to avoid Chapter 9 bankruptcy. The privatization industry wants to put tolls everywhere, including on the interstates, but there’s bipartisan resistance to that. “Senate Republican leader Len Fasano, R-North Haven, sees too many unanswered questions about tolling. ‘If Connecticut has to toll every major route in our state to stop people from dodging tolls, how will the state afford to pay for the installation of such broad infrastructure so quickly?’ he said. ‘And how much will residents have to pay at the tolls in order for the state to generate a profit?’ According to Fasano, a Republican transportation plan would guarantee at least $1 billion annually over 30 years without tax hikes or tolls. It would reserve a set amount of GO bonds for transportation priorities and preserve current special tax obligation bonds dedicated to transportation.”

4) Iowa/National: Public education advocate Jennifer Berkshire says “Whacko #schoolchoice plans spreading across the #Heartland like a grasshopper plague. This week: Iowa.” The Des Moines Register reports “A Republican plan to expand school choice options would give Iowa families about $5,000 worth of state aid each year to help cover tuition and other education-related expenses at accredited non-public schools. House Study Bill 651 would create an Education Savings Account program in Iowa in addition to loosening regulations on charter school operators.” But public education supporters are deeply opposed, saying such voucher programs will siphon money from an already financially challenged school system, and that Republicans are guilty of the “systemic underfunding of our schools.”

5) KansasThe Topeka Capital-Journal endorses a bill to limit privatization at state prisons and maintain the role the Kansas Department of Corrections. “CoreCivic, which is based in Tennessee, was contracted to build the new prison. However, under measures outlined in the bill, which was endorsed by the Senate Federal and State Affairs Committee, CoreCivic would not be granted authority to oversee personnel operations at Kansas adult and juvenile facilities. Concerns with CoreCivic first arose when lobbyists with close personal relationships to former Gov. Sam Brownback were hired by the company.”

6) Pennsylvania: The Philadelphia Inquirer calls on lawmakers to finally take action this session to toughen up the state’s charter school law. “Full-blown education reform is a big ask, and takes time. That said, there is one change that could make an immediate difference in the quality of education, and that’s a serious review and revision of the state’s policies on charter schools. The charter-school law, over 20 years old, has never been revised to improve accountability or performance. Charters were intended to create and spread innovations into traditional public schools, but the evidence they have done so is scarce, and study after study has found charters trailing traditional public schools in key areas of performance.”

7) Pennsylvania: Inaction on closing a loophole that allows charter schools to collect rent reimbursements from the state even though they own the buildings they operate in is still soaking taxpayers. “[State Auditor Eugene DePasquale,] called on then-Gov. Tom Corbett’s administration to close the loophole, saying, ‘The charter schools are funded by tuition payments from school districts and should be focused on providing the best possible education for students, not looking for additional revenue streams funded by taxpayers.’ But the loophole wasn’t closed. Roberto Clemente did not pay the state back because it wasn’t legally obligated to. Since DePasquale issued his report, more charter schools have opened under the arrangement he flagged.”

8) Utah: The Salt Lake Tribune warns that charter school oversight should not be taken away from the state board of education. “Another legislative session, and another attempt by charter schools to break the chains of their overlords. Rep. Dan McCay has proposed House Bill 313, which, among other things, would take the approval of new charter schools away from the Utah Board of Education and let the independent state Charter School Board’s decisions stand without further approval. Some Utah Board members are objecting, and one of them said it would be unconstitutional, as Utah’s constitution puts the state board in charge of public education.”

 

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