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Weekly Privatization Report 3-12-2018

1) National: This is National Public Schools Week, led by the American Association of School Administrators (AASA). On Wednesday, there will be a news conference on Capitol Hill where “House and Senate Co-Chairs of Public Schools Week will share their support for public schools and specific legislation that supports public schools.” See their public education infographic. Diane Ravitch has some suggestions for messages to lawmakers.

2) National: As striking West Virginia teachers win their demand for a 5% increase for themselves and all of the state’s public employees, teachers in Oklahoma, Mississippi, and Arizona are poised to follow suit, amid reports that “a backlash is brewing against the Republican tax-cutting frenzy.” The Payday Report’s Mike Elk reports that “West Virginia Governor Justice vowed to veto any bills that would fund charter schools, strip teachers of their seniority, or reduce or remove the deduction of union dues from their paychecks even if those dues are applied to political work.”

3) National: On Friday Trump issued an executive order creating a “Federal Interagency Council on Crime Prevention and Improving Reentry.” ALEC loved it, seeing it as reflecting the ALEC model Resolution on Reentry Programs, which recommends the involvement of “nonprofits, faith-based organizations, private companies, or government agencies.”

As private, for-profit prison companies such as CoreCivic and the GEO Group play up and market their alleged answers for prisoner reentry—such as “social impact bond pilot programs that tie contractor payments to positive outcomes”—the real world offers a bleaker prospect without fundamental social reform. This goes for public prison systems too. Alessandro De Giorgi argues that “as long as living conditions at the bottom of the U.S. racial and class hierarchy will be characterized by widespread economic destitution, institutional abandonment, and public neglect, ‘prisoner reentry’ will be little more than a self-absolutory figure of speech, and formerly incarcerated people will keep coming back to nothing.” Fast fact: “A lifetime ban on food stamps eligibility for felony drug offenders was introduced as part of the 1996 welfare reform.”

4) National: David Dayen points to a provision of the new banking bill, which rolls back elements of Dodd-Frank,that poses risks to municipal bonds, which are often used to finance public infrastructure and works. “Section 403 lets Citi and other big banks count municipal bonds as ‘highly liquid assets’ that could be used toward the ‘liquidity coverage ratio,’ a stockpile of assets that can be sold off in a crisis. Some have questioned whether muni bonds, which are thinly traded, could be sold for cash so quickly in an emergency. Mega-banks using muni bonds as liquid assets can load up on risk elsewhere on the balance sheet. Lobbyists have been working on this provision, initiating an AstroTurf campaign to get random cities to call Congress in support.”

5) National: This week is Sunshine Week, an “annual nationwide celebration of access to public information and what it means for you and your community” supported by ASNE and the Reporters Committee. Here is the calendar of events. In Utah, the Division of Archives and Records Service is holding a program on “why transparency matters and how to work together for a better open government. Topics range from discussion on the importance of transparency to providing advice on how to adopt ‘Sunshine’ standards and forming lasting partnerships and trust between the government and the public.” This year, ASNE, The Associated Press and the Associated Press Media Editors are, once again, marking Sunshine Week with a package that examines some of the new challenges confronting traditional journalism.

6) National: Sen. Richard Blumenthal (D-CT) is calling for an Office of Government Ethics investigation into the conduct of Trump aide and son-in-law Jared Kushner. “Mr. Kushner reportedly met repeatedly with Mr. Joshua Harris, of Apollo Global Management and an outside adviser on the Trump Administration’s multi-billion dollar effort to privatize public infrastructure,” Blumenthal said. Apollo Global Management is the lead owner of Apollo Education Group, which owns the private, for-profit University of Phoenix and BPP Law School. The private equity giant teamed up with The Vistria Group and Najafi Companies to buy the Apollo Education Group. On March 1, a class action suit was filed against the University of Phoenix and two other schools, “alleging the schools engaged in aggressive telemarketing practices by using predictive dialers to contact him several times to advertise their programs and services in violation of the Telephone Consumer Protection Act.”

7) National: In the fourth part of a four part series on Real News, school privatization opponent Noliwe Rooks and Dwight Draughon discuss real solutions to educational apartheid.

8) Alabama: A Montgomery charter school is to open despite an Alabama Education Association lawsuit claiming it was improperly approved. AEA Executive Director Theron Stokes “said the organization believes Richardson decided to close four MPS schools as part of his intervention plan so that charter schools could open in them.”

9) Arizona: Parents and other concerned citizens can check financial performance reports for all charter school at the Arizona State Board for Charter Schools. Arizona charter schools are facing a financial crisis. “Another Valley charter school is being looked at for collecting 401k and health insurance payments from teachers but holding on to the money. The Arizona Republic is reporting as many as 40 charter schools are dealing with serious financial issues and have been red-flagged for potential closure within a year.”

10) California: San Diego Republican Mayor Kevin Faulconer has reportedly raised $5,000 from the GEO Group Foundation for his One San Diego nonprofit.

11) California: It looks like some of the promises made to the public by the private partner in the Presidio Parkway ‘public private partnership’ deal, which has been much touted by the privatization industry, have not been kept. “The Presidio Parkway roadway and tunnels opened in 2015, but nothing happened regarding the promised landscaping, other than the words “Presidio Parkway” were chiseled in concrete. Everyone involved is closed-lipped about the delay. The concept of transparency is nonexistent.” The problem seems to originate in an often-heard marketing point by the P3 industry, that risk will be transferred to the private party, so voilà it’s a good deal for the public. “The promise was that the arrangement would ‘transfer cost-overrun risks to the private developer,” writes Marin Independent Journal columnist Dick Spotswood. “The power behind Golden Link Partners is HOCHTIEF AG, a well-connected German construction and engineering powerhouse. As I wrote in my 2011 Christmas Day IJ column, ‘Unfortunately, with Caltrans out of the picture, if something does go wrong there will be no entity this side of Germany looking out for North Bay-bound travelers.’ In 2018, Golden Link has no local contact person, so it’s impossible to ask them anything.”

12) California: A La Mesa charter school is in a tight spot because local school districts are refusing its requests for oversight. “The superintendent of the La Mesa-Spring Valley School District would not discuss the issue with NBC 7 Wednesday but according to the San Diego Union-Tribune, the district is reportedly concerned about the charter’s financing of the new campus and whether it can meet its enrollment goals.”

13) California: The California Public Employees Retirement System increased its investment in CoreCivic by 3.8% in the fourth quarter of 2017.

14) Massachusetts: A relentless stream of bad news for charter schools, including scandals, has prevented the industry and its political supporters from staging a comeback, the Boston Globe reports. “The atmosphere has become so charged that any proposal tied to charter schools appears to be almost radioactive. The Boston schools last month abruptly turned away an entreaty by Conservatory Lab Charter School to join the system. In the fall, Mayor Martin J. Walsh, who describes himself as a charter school supporter, dropped a proposal to unify the registration process for traditional and charter schools amid heated opposition from parents.”

15) Massachusetts: Students are pushing back against a charter school’s ban on male students wearing do-rags. “Dean of Students and Culture Shauna-Kaye Clarke sent an email about the ban to students Sunday, saying the headgear is reflective of gang culture.” Students at KIPP Academy Lynn Collegiate “are challenging a new dress code policy that bans the wearing of do-rags and bandannas, calling the head covering a cultural choice.”

16) Nevada: The surprise opening of a charter school in North Las Vegas is delaying the opening of a public elementary school. “State-authorized American Leadership Academy opened at the beginning of the current school year, unbeknownst to Rick Baldwin, the district’s director of demographics, zoning and geographic information systems. (…) Tracking charter school openings and adjusting enrollment expectations has been a constant headache for district officials, although Baldwin said the district and the State Public Charter School Authority—which authorizes new charters statewide—have improved communications recently.”

17) North Carolina: A charter school leader is accusing public schools across the nation of “milking” the federal school lunch program. But “the latest state charter school report found that 30.6 percent of charter students were considered economically disadvantaged in the 2016-17 school year compared to 50.4 percent in traditional public schools. That’s comparable to the gap shown in data from the federal Title I program which showed 33 percent of students enrolled in charters in 2016-2017 were low-income, compared to 53 percent in traditional public schools.”

18) Pennsylvania: The mayor’s blue ribbon panel says “privatization is not the answer for the Pittsburgh Water and Sewer Authority” for a number of reasons. “Then, too, there is the cost of borrowing capital for much-needed infrastructure improvements. While public authorities can borrow with tax-exempt bonds at low interest rates, the interest costs of for-profit entities could be upwards of 3 percent, which adds significantly to billion-dollar-plus loans. Privatization significantly increases the cost of financing water and sewer projects. One thing is certain in considering privatization: The absolute worst time to negotiate is from a position of weakness. While PWSA has made significant improvements in recent months, it remains in a fragile and precarious position. The mayor’s blue-ribbon panel firmly believes that now is not the time to make such a drastic decision.”

19) Puerto Rico: The Puerto Rico Energy Commission is suing the federal board overseeing Puerto Rico’s finances, “seeking to assert itself in the privatization of the public monopoly known as PREPA. The lawsuit marks an escalation of tensions between Gov. Rosselló, the oversight board and the energy commission over the future of Puerto Rico’s bankrupt power system. [Sub required]

20) Puerto Rico: As preparations are underway for the 2018 hurricane season, Senators Elizabeth Warren (D-MA), Richard Blumenthal (D-CT), and Bernie Sanders (I-VT) have written to the FEMA administrator requesting information on the agency’s plans. Sen. Warren has also “written to the Office of Management and Budget requesting information on how a proposal to reorganize and privatize the Puerto Rico Institute of Statistics (PRIS) would affect the Federal Statistical System, including preparations for the 2020 Census.”

21) South Carolina: An all-boys charter school is facing closure less than two years after opening “due to low enrollment that spurred financial strife.” The Post and Courier reports that “of the 29 closures [since charters began in the state in 1996], 12 were voluntary and 17 had their sponsorship revoked by a school district. One of the most common reasons listed was finance, which is closely tied to enrollment under the state’s charter funding formula.”

22) Texas: An underperforming San Antonio public elementary school may be taken over by a charter school operator. “But leaders of the San Antonio Alliance of Teachers and Support Personnel, an elected group of SAISD employees, say that they don’t think it’s a good idea. ‘They are known for very regressive approaches to student discipline that push students out of their school,’ said Shelley Potter with the Alliance. ‘It’s been described by former teachers at their New York schools as a police state that teaches students through fear.’ If Democracy Prep takes over Stewart Elementary, teachers at that school will give up their status as SAISD employees and become at-will workers of Democracy Prep. ‘So you’re asking people to trade their contract rights and the security of their own families for the students who they care about,’ Potter said.”

23) Wisconsin: Parents, students, and community members are resisting the attempted privatization or co-location of North Division High School in Milwaukee. They are building support for a protest at the school board meeting this Wednesday, and are circulating a petition. They say the move “threatens local control. North Division parents and students were never included in the discussions to co-locate a privately owned and operated charter school inside of North Division.”

24) International: Moody’s downgrades Turkey’s sovereign ratings for a number of reasons, including the effects of ‘public private partnerships’ on its budget. “The growth of contingent liabilities outside of the budget, such as the Public-Private Partnerships (PPPs) or the Credit Guarantee Fund, is a reversal of reforms that were undertaken in the 2000s after the 2001 financial crisis. Moody’s considers that Turkey’s exposure to PPPs, its costs of military campaigns and its plans for borrowing against the collateral of the Turkish Sovereign Wealth Fund lack full transparency.” [Sub required]

25) International: Conner Beaton makes the case for free public transport. “There is a strong economic, social, and environmental case for adopting this policy throughout the country. There is also precedent from successful fare-free public transport schemes in parts of France, Germany, Belgium, and Estonia as well as far-flung cities in China and the United States. We have evidence of the policy’s affordability and benefit.”

26) International: A Canadian firm that looked set to buy a substantial number of public sector contracts from the collapsed British outsourcing firm Carillion has pulled out of the deal, imperiling 2,500 jobs. It looks like off the books financing of PPPs may have played a role. “A spokesperson for the official receiver said the sale was ‘conditional on ongoing support from customers for continued provision, but this could not be secured.’ It is understood that the customers include special-purpose vehicles used by government to manage public services, but it is not clear why a promise of continued support for those services was not forthcoming.”

27) Think Tanks: David Walker and John Tizard of the Smith Institute have produced an excellent brief on the case against outsourcing and what should be done about it, Out of Contract: Time to move on from the ‘Love In’ with Outsourcing and PFI. “While some outsourcing and PFI deals have been costly disasters and others have boosted the profits of global companies at the tax payers expense, the authors are not saying cancel all contracts from day one and exclude the private sector. Leaving aside the high compensation costs, for the authors, ending outsourcing will not in itself solve funding deficiencies or poor performance. Walker and Tizard are instead arguing for tighter and tougher regulations, renewed investment in public services and a preference for in-house and not-for-profit provision.”

28) Think Tanks: David A. McDonald of Queen’s University in Canada looks at the rarely explored issue of resistance to remunicipalization—the insourcing of privately owned and/or operated public services and facilities. His hypothesis is that “remunicipalization will continue in the medium term due to widespread dissatisfaction with privatization, but that differences within the re-municipalization movement, combined with resistance from powerful multilateral actors, may make it difficult to sustain as a coherent policy movement. There are also concerns with the kinds of governments that water services are being returned to, and whether remunicipalization necessarily leads to democratic, equity-oriented and accountable public agencies. Rising legal and financial barriers to remunicipalization are also becoming a problem. Nor has privatization itself disappeared. Despite concerns on the part of private water companies with long-term, risk-bearing contracts—especially in the South—their participation in the water sector continues to expand.” [Sub required]

29) Think Tanks: Elizabeth Hinton, an assistant professor in the departments of history and African and African-American studies at Harvard, says prisons must be turned into colleges. “The idea of expanding educational opportunities to prisoners as a way to reduce recidivism and government spending has again gained momentum. That’s partly because of a study published in 2013 by the right-leaning RAND Corporation showing that inmates who took classes had a 43 percent lower likelihood of recidivism and a 13 percent higher likelihood of getting a job after leaving prison. Lawmakers have rightly recognized the wisdom in turning prisons into colleges.” [The Rand study: “Evaluating the Effectiveness of Correctional Education”].

Legislative Issues

1) National: Trump’s infrastructure push has hit a roadblock in Congress, and the administration is launching a Capitol Hill offensive to try and salvage it. Speaker Paul Ryan “added another nail in the coffin by declaring a gas tax increase off the table, removing what many lawmakers saw as the most viable funding stream for a rebuilding overhaul. In a bid to regain momentum, the Trump administration is sending five Cabinet members to testify to a Senate panel Wednesday about the infrastructure plan.” Watch the drama unfold at a hearing of the Senate Commerce, Science and Transportation Committee on Wednesday.

2) National: The American Public Power Association (APPA) is discouraging the federal government “from incentivizing states and localities to privatize public infrastructure.” The APPA “is opposed to the Trump administration’s proposal in its fiscal-year 2019 budget request to privatize the transmission assets of three federal power marketing administrations and the Tennessee Valley Authority. Although Congress has rejected such proposals in the past, [APPA President and CEO Sue Kelly] said the APPA is ‘quite concerned’ by the request and will urge lawmakers to fight attempts to sell the assets, which she said would raise power costs for ratepayers.” [SNL Power Policy Week, March 7, 2018; sub required]

3) National: Lawmakers are weighing in on efforts by right wing activists to undermine the Secretary of the Veterans Administration, David Shulkin, who has resisted the all-out efforts by antigovernment, Koch-backed groups to privatize the $180 billion-a-year agency.

“Recent reports indicate that far-right outside groups and individuals within the Trump Administration are seeking to privatize the VA. Our veterans deserve a strong VA that provides them with the services and benefits they have earned. I hope the Administration will move to quickly distance themselves from this effort and I remain opposed to any effort to privatize the VA,” said Rep. Steny H. Hoyer (D-MD).

Congresswoman Jan Schakowsky (D-IL) said “Instead of listening to those veterans, the Trump Administration is apparently listening to other voices—including the Koch Brothers-connected Concerned Veterans of America and those who are looking to make a profit from veterans’ health care. Reports in the Military Times, The Washington Post and The New York Times raise real concerns that the VA privatization effort is part of a broader effort to undermine Americans’ earned benefits, one that puts the interests of wealthy corporate donors ahead of the needs of veterans. It is wrong and it must be rejected.”

Rep. Eddie Bernice Johnson (D-TX) said
, “as a non-practicing nurse who served 15 years at the Dallas Veterans Hospital and now a Senior Member of Congress representing one of the nation’s largest VA hospitals, I oppose any effort to privatize the VA. Millions of veterans rely on VA healthcare services and any efforts to privatize these services solely for private gain would be an egregious move that a majority of veterans outright oppose. We need to work on improving existing care and services, rather than promoting wealth for outside influencers.”

Congressional Progressive Caucus Co-Chairs Rep. Raul M. Grijalva (D-AZ) and Rep. Mark Pocan (D-WI) said “the infiltration of the VA by outside actors affiliated with the Koch brothers network shows that even our veterans’ health care is not sacred from their immoral quest to buy our democracy. Caught in the middle of this drama is the health and well-being of our veterans.”

4) Florida: Beachgoers are fighting back against SB 804, which could open the door to widespread beach privatization in the state. “What this could mean for beachfront owners of any property, is the potential to privatize parts of the beach reaching the water. If the bill passes, walking through a private property could mean trespassing. Second generation Melbourne resident Hunter Kendrick is hoping it’s not too late. ‘This could have passed yesterday, or be on the Governor’s desk by the weekend,’ says Kendrick.” The bill would have the effect of “prohibiting a governmental entity from adopting or keeping in effect certain ordinances and rules based upon customary use.”

5) Kentucky: A Senate panel has lifted the $25 million cap on state ‘public-private partnership’ projects. “Most of Kentucky’s current P-3 projects are transportation related.  Those projects are not covered by this legislation. Bill sponsor Max Wise of Campbellsville says the current law could be putting state government at a competitive disadvantage. ‘We’re really missing out on some really, really prime opportunities because of how we’ve got it currently written in statute,’ said Wise. Regina Stivers, Deputy Secretary in the Tourism, Arts, and Heritage Cabinet says those opportunities might include large tourism projects.”

 

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