Weekly Privatization Report 4-10-2017

1) National/California: In a new report with national implications, In the Public Interest looks at the failure of policy planning in California’s charter school facility funding. The report’s key findings are that a substantial portion of the more than $2.5 billion in tax dollars or taxpayer subsidized financing spent on California charter school facilities in the past 15 years has been misspent on: schools that underperformed nearby traditional public schools; schools built in districts that already had enough classroom space; schools that were found to have discriminatory enrollment policies; and in the worst cases, schools that engaged in unethical or corrupt practices. With Trump proposing grants for charter school facilities funding, will we know how this money would be spent?

2) National/Indiana: As for-profit prison companies and their investors anticipate a windfall from an expected explosion of incarceration and detention under Trump, Donald Cohen of In the Public Interest points to a decision by Indianapolis to sever ties with CoreCivic. “If the industry is paying attention to Indiana,” Cohen writes, “they’ll realize the future might not be so bright.”

3) National: With proposed budget cuts leaving bridge and rail projects hanging, skepticism abounds regarding Trump’s infrastructure plan, the New York Times reports. But even if the plan materializes, past experience shows its focus on tolling and revenue streams could end in failure and bad choices. “Donald Cohen, the executive director of In The Public Interest, a watchdog that focuses on privatization and contracting, said that toll roads and parking meters had attracted investors, since they looked like infrastructure projects with well-defined business models and predictable revenue. ‘There were some rosy projections, but things didn’t go well,’ Mr. Cohen said. ‘And there can be a real diversion between what’s good for private investors and public interest.’”

4) National: An underreported but serious risk would be created by the Trump/DeVos plan to privatize education by promoting charters and vouchers: the likelihood that it will undermine the creditworthiness of public schools. A wave of litigation may be on the horizon. “Moody’s Investors Service published research in 2013 that found that charter schools were a growing credit risk for public schools. The risk was largely the result of ‘state policy frameworks that support charter school growth,’ such as permissive rules for the authorization of new charters and increased enrollment in existing charters, as well as per-pupil or other funding formulas based upon enrollment. According to Moody’s, public schools that lost enrollment to charters ‘often cut academic and other programs, reducing service levels and thereby driving students to seek educational alternatives, including charter schools,’ which ‘can exacerbate the loss of state and local revenues, as portions of both will follow those students to charter schools.’”

According to Verdict, “Investors in public school bonds may have a claim that such charter-friendly state legislation impairs their contracts with public school districts in violation of the Contract Clause of the U.S. Constitution. (…) Enrollment-based funding formulas in Michigan and elsewhere resulted in the loss to public schools of far more funds than the incremental cost of educating children enrolled in charters. Public schools lost funds for fixed costs, including debt service for bonds to pay for school construction, renovation, and equipment to serve the expected enrollment.”

The takeaway: “Any remedy a court might fashion, however, would be an enormous victory for traditional public schools.”

5) National: The latest on Trump’s infrastructure plan from the perspective of independent truckers (audio).

6) NationalNikhil Goyal, author of Schools on Trial: How Freedom and Creativity Can Fix Our Educational Malpractice, discusses the decline of the American education system, including the role of school privatization and over-testing. [Video: 30 minutes]

7) National: The debate on privatizing Social Security is not dead.

8) District of Columbia: DC public school officials are pushing back against a report criticizing their schools as being marked by radical racial segregation. “The report argues that District charter schools have the most extreme segregation in D.C, saying that at charter schools, 80 percent of students are black, compared to less than 5 percent of students who are Asian or Caucasian. D.C. Public Charter School Board Executive Director Scott Pearson pushed back against charges of segregation in the District’s charter schools, saying that all families, regardless of race, are given opportunities to send their children to charter schools.” The report’s co-author Gary Orfield, co-director of the UCLA Civil Rights Project, criticized the pace of desegregation in District schools. Orfield said segregation limits how much students can achieve later in life.

9) Florida: Despite vocal protests at a public meeting, North Miami Beach commissioners vote 4-2 to turn over operation of a utility that provides drinking water to over 200,000 Northeast Miami-Dade residents to CH2M Hill. Negotiations over the terms will now begin. “The proposal has been controversial. Union members, Democratic Party leaders and environmental justice activists have ripped the city for considering the ‘privatization’ of its utility. Last week, City Attorney Jose Smith confirmed that the FBI opened an investigation into allegations of wrongdoing, but found nothing amiss. Still, on Monday, a standing-room-only crowd urged commissioners to keep their utility under the guidance of the public.”

10) Georgia: High teacher turnover and a lack of funding are being blamed for a Smyrna charter school’s struggles. “The charter school’s poor academic performance is why Cobb Superintendent Chris Ragsdale is calling for the school to close after this school year. The Georgia Department of Education went from calling for the school’s shut down to considering keeping it open. The school’s fate depends on if the Cobb Board of Education extends or denies the International Academy of Smyrna’s charter. The vote is scheduled for April 20.”

11) Iowa: With the news that federal taxpayers will have to bail out the state’s poorly-performing for-profit Medicaid firms to the tune of $225 million, the future of Iowa’s healthcare system is up in the air. One Iowa City social worker cuts through the noise: “As a social worker, my worldview may be a little bit different than most, and in my ideal world, the United States would switch to a single-payer model. It is obvious that the Affordable Care Act does need fixing, and that the privatization of Medicaid in Iowa is not working. I would love to see us take the same direction that so many other countries have successfully taken to provide health care to all.”

12) LouisianaAn industry consulting and lobbying group has patted itself on the back for promoting hospital privatization in Baton Rouge.

13) Maryland: The Washington Post declares the Purple Line light rail ‘public private partnership’ all but dead. “Without a green light now” from U.S. District Judge Richard J. Leon, “it may be all but impossible to revive the federal funding agreement for the foreseeable future. That’s because the Trump administration has proposed halting all cash for transit projects that lack signed funding agreements, starting almost immediately and lasting for the remainder of the fiscal year. Beyond that, there is no sign that the Trump administration is interested in improving the United States’ transit networks. To the contrary, the administration’s current stance suggests indifference toward transportation projects that don’t serve automobiles.”

14) Massachusetts: The Brockton School Committee and the community is bracing for the shutdown of a middle school, which is being caused in part by the fact that the district has had to siphon off money to support a charter school. “[School budget officer Aldo Petronio] said they’ve faced other tough budget years, but this one is different for two reasons: money lost to the New Heights Charter School, and money lost because of a change in the state’s funding for low-income students. Next year, Brockton will not be fully reimbursed for the local students attending New Heights, as they were this year.”

15) MichiganThe Osceola Township Planning Commission may block Nestlé’s efforts to build a pipeline booster station. Township residents say the company’s efforts to draw more water from the headwaters of Chippewa Creek in Osceola County is a form of privatization. The commission meets next Tuesday.

16) MinnesotaState Auditor Rebecca Otto speaks out against Republican political retribution for doing her job. “In 2015, the legislature took this protection from the People by passing a law allowing counties to control who audits them. Not only did the law gut a core function of the OSA, it improperly compromised a protection constitutionally promised to the people of Minnesota. (…) But the story does not end with the 2015 law. Although the most recent forecast showed the State has a $1.65 billion surplus, the Legislature, as I write this, is pushing new bills that will further cripple this Office by cutting funding and enacting provisions to keep us from doing our work. Why? Certain legislators have attacked me for asking the Judiciary to settle a legitimate Constitutional dispute. They have made it clear that they intend to punish me and make the OSA pay, literally, for challenging the law. But they are not punishing me; they are punishing Minnesota’s taxpayers.”

17) Missouri: Lois Scott, the former finance consultant Mayor Rahm Emanuel assigned to try and fix the disastrous Chicago parking meters deal when she was deputy mayor, urges local officials to be as transparent as they can with the public about privatizing Lambert International Airport. [Sub required] It seems she has had some experience, since according to her “it took about a year for Chicago Parking Meters to turn over the data for 120 million parking transactions to the city.” Scott was also involved in the unsuccessful effort to privatize Chicago’s Midway Airport. “I highly recommend transparency,” she says. “We put every document online and put them online immediately—not a week delay. That way the public didn’t have to wonder whether what we were doing was right. They had viewing rights.”

18) MontanaMontana State University stages a corporate sell-off of some of its most notable places. An uncritical article in the student newspaper said “the silent auction resulted in several notable building name changes around campus. The most exciting developments were the renaming of the library to the ‘Pearson University Library’ and the surprise winning bid for the renaming of the SUB by Starbucks. SUB will now stand for ‘Starbucks Union Building.’”

19) New YorkIt pays to do things properly when planning PPPs. A bidding frenzy to operate Westchester County Airport is under way. Last fall a hasty and pressured process pushed by Westchester County Executive Rob Astorino was blocked by the legislature, which ordered a second, correct bidding process. There are now more than 20 bidders.

20) Ohio: Ohio State University trustees have approved a deal to privatize the school’s energy operations for more than $1 billion in a 50-year deal with French energy giant Engie. “The deal is unusual, as was Friday’strustees meeting, which was attended by several TV stations and students protesting Ohio State’s renewal of a lease inside the Wexner Medical Center with Dublin-based fast food company Wendy’s. ‘Keep your word—cut the contract with Wendy’s,’ a protestor called out. The protestors were eventually escorted out of the meeting.”

At the beginning of last week, a retired Ohio State professor sued the university for withholding details of the deal. “According to the lawsuit, Ohio State has said it won’t release the concessionaire agreement until a legal review has determined that it is a public record. But Bruce Weide, a professor emeritus of computer science, maintains that the university simply wants to keep it under wraps until the Board of Trustees approves the deal and it’s too late for opponents to object.” Without seeing the concessionaire agreement, Gittes said, “We can’t tell whether this is a boondoggle or just some favoritism for a foreign, for-profit corporation. We can’t tell whether any public purpose is being served.” But the deal was put through without any transparency anyway.

21) OklahomaA charter school skeptic is elected chair of the Oklahoma City Public Schools board, and some are seeing a trend. “The first key to understanding this week’s OKCPS School Board election is that a grassroots uprising shouted ‘No!’ to charter school expansion. Oklahoma City adds to the evidence that the national corporate-reform campaign to expand school choice has produced an unsustainable bubble. In fact, charter applications have declined 48 percent nationally since 2012. Charter school advocates may recognize that venture philanthropists and federal and state governments have subsidized an oversupply of charters, which could cause them to retrench. Or, the bubble will burst as they join the Betsy DeVos, Donald Trump push for unregulated vouchers and private charters.”

22) WisconsinA public school supporter, Kate Toews, has won a seat on the Madison School Board. “In candidate interviews and survey responses for the Wisconsin State Journal, Toews said the main challenges facing the district include low teacher morale, the racial achievement gap in student performance, and increasing pressure from state and federal politicians to privatize education. To address those challenges, Toews advocated fixes such as prioritizing professional development and setting a specific goal for hiring more minority teachers. She also has emphasized more focus on early childhood education, hiring talented principals to improve school climates and offering incentives for teaching in high-poverty schools.”

23) International: Trevor Herriot, a Regina writer and the author of Towards a Prairie Atonement, writes about what the public library means to him and so many others, and why they are fighting against privatization. “He said other things, appalling for a minister in charge of education, but I was distracted by the disdain and prejudice behind his reference to sanctuary. In libraries across Canada, there has been a transformation underway more or less hidden to those of us with privilege and power. If you do all of your reading online or for other reasons do not go to libraries, you are missing the world I see outside my office door every week.”

24) International: The New York Times asks why Britain’s trains don’t run on time and finds its answer: “capitalism.” The background: “On the eve of the great sell-off of the 1990s, Mr. Major pledged that rail privatization would bring a ‘better, cheaper and more effective service for the commuter.’ To repeat that promise to Govia’s beleaguered passengers today would at best provoke mirthless laughter. On Southern, passenger satisfaction slumped to 21 percent this year; nearly half of those surveyed reported delays in their last journey. How did we get here? Not on a Southern train, obviously: The company has become a byword for overcrowding, delays and understaffing. By introducing competition, privatization was supposed to make rail travel more affordable.”

25) Think Tanks: The Network for Public Education has created a toolkit on school privatization. “Unfortunately the general public is often confused by the misleading terms that privatizers use to mask their agenda. Terms like ‘choice,’ ‘portability’ and Empowerment Scholarship Accounts are an attempt to make religious school vouchers and other unpopular policies acceptable. In response, The Network for Public Education has prepared a toolkit called School Privatization Explained. Each one page fact sheet is designed to correct the misinformation that DeVos and others have used to push school privatization. From charter myths to ESAs, we pull off the masks.”

26) Think Tanks: The American Enterprise Institute is holding a discussion today on “Updating accountability systems for urban schools: What chartering can teach us.” Panelists include Chris Barbic of the Laura and John Arnold Foundation; former Education Secretary John King, president and CEO of the Education Trust; Scott Pearson, executive director of the D.C. Public Charter School Board; Christy Wolfe of the National Alliance for Public Charter Schools; and Andy Smarick, a fellow at AEI.

27) Upcoming webinar: The Eno Center will be presenting a webinar on April 20 on “Transportation at the Ballot Box: Tracking and Explaining Success.” Description: “In an era of declining infrastructure coupled with limited resources for transportation spending, local and state governments are turning to the ballot box to fund transportation measures. The ballot box can be an effective way to increase funding to create more livable communities through transportation. In 2016, with over $250 billion at stake, voters approved approximately 70% of measures. While it is easy to describe anecdotes to illustrate success stories of local ballot measures, tracking success across the country is challenging.”

Legislative Issues

1) National: Transportation Secretary Elaine Chao says the administration will release a legislative package next month that will detail the Trump administration’s infrastructure plans. “Trump said he would not fund projects that cannot be started within 90 days. The administration wants to improve the electrical grid and water systems, rebuild airports, bridges, roads and potentially hospitals for military veterans and broadband. National Economic Council director Gary Cohn told executives that privatizing air traffic control, which the administration proposed in its budget outline in March, ‘is probably the single most exciting thing we can do.’” American Airlines has opposed privatizing air traffic control, indicating a possible split between some airlines and Wall Streeters like Cohn on the issue.

2) Indiana: Lawmakers are trying to pass a bill that would allow state-appointed emergency managers to take control of financially troubled school districts in Gary and Muncie “Under the measure, an emergency manager would have the power to control and reduce spending, sell property, renegotiate contracts, lay off staff and privatize services.”

3) Maryland: Democratic lawmakers override Gov. Hogan’s veto of a bill that creates a blueprint for identifying and assisting struggling schools. “One of the things that this bill actually doesn’t do is: it doesn’t let a corporate board who could have been, you know, a contestant on ‘The Apprentice,’ come in and take over and privatize our local schools,” Sen. Craig Zucker, a Montgomery County Democrat who sponsored the bill in the Senate, said, citing the television show Trump used to host.”

4) New York: After a fierce state budget battle over the funding of charter schools, Gov. Cuomo has announced that he has come to agreement with legislative leaders. A freeze on charter school funding imposed in 2009 expires in June, and if nothing was done the state’s charter schools—which now get $15,920 per student—would have gotten $1,500 more per pupil. For New York City that would have been an extra $200 million a year. “The Democratic-controlled Assembly, with close ties to teachers unions, [wanted] to block the ‘windfall,’ as the governor [described] it. But the Republican-led state Senate [was] balking at extending the freeze.” Cuomo says that under the agreement there will be “a measured increase in aid to charter schools.”

5) Pennsylvania: An interesting piece of legislation designed to tighten up regulations on charter school funding and operations has been introduced by Rep. James R. Roebuck, Jr. (D-Philadelphia). “To ensure financial accountability for all public schools and protect Pennsylvania taxpayers, I am introducing legislation that would prohibit anyone who serves as a school director, founder, member of a board of trustees, or administrator of any public school entity—including a school district, charter school or cyber charter school—from receiving reimbursements on lease payments for buildings or facilities used for charter schools. The prohibition would also include executives or employees of charter school management companies.

This legislation was first introduced last session in response to concerns raised about lease overpayments to charter schools. Since December 2012, the Department of the Auditor General has found that the Department of Education has approved and paid $1.8 million in lease reimbursements to seven charter schools despite questions about whether those reimbursements are permitted under the Public School Code and Department of Education guidelines—specifically, that state lease reimbursements to charter schools are prohibited for facilities owned by individuals or entities related to the school. As recently as August 2016, the Auditor General highlighted more than $2.5 million in questionable lease reimbursement to nine charter schools. 

The legislation will also require school officials, in their application for funding for lease reimbursements, to provide to the Department of Education a copy of the signed lease agreement for the leased building and a copy of the deed for the leased building. Finally, the legislation will require the Department of Education to seek repayment from school entities for inappropriate lease reimbursements that were paid.”

6) PennsylvaniaOn Friday, Republican Rep. Mike Reese announced he is introducing legislation “that will reform the nearly 20-year-old Charter School Law by making necessary improvements including a change to the funding formula for cyber charter schools.”

7) WyomingLawmakers consider using CoreCivic, the for-profit prison company, to build a new prison. “But Sabrina King of the Wyoming chapter of the American Civil Liberties Union said she is concerned about mission creep—that a private company would push to expand its role into the operations of the penitentiary. ‘There’s no way a private prison company is going to build the state’s prison and just hand it over,’ she said. ‘It’s not going to happen.’” The Joint Appropriations Committee will meet in Rawlins in mid-July to review the existing facility there. “The JAC will draft a recommendation for the penitentiary’s future that the whole Legislature will consider in 2018.


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