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Weekly Privatization Report 9-18-2017

1) National: In a major victory for the public interest, a federal court has “cast doubt on a longstanding U.S. government argument that blocking federal coal leasing won’t affect climate change because the coal could simply be mined elsewhere.” Environmental groups have been trying for years to get the courts to recognize the impact. “This is big. And we’re certainly going to be wielding this and using it to confront other mining approvals both in the Powder River Basin and beyond,” said Jeremy Nichols with WildEarth Guardians.

2) National/California: Three women file a gender pay bias lawsuit against Google, which is a federal contractor, for violating California’s Equal Pay Act and other state labor laws. “‘The Office of Federal Contract Compliance Program’s analysis found six to seven standard deviations between pay for men and women in nearly every job classification in 2015,’ the suit says. ‘Two standard deviations is considered statistically significant; six or seven standard deviations means there is a one in a million chance that the disparity is occurring randomly or by chance.’”

3) National: LAZ Parking, one of the leading companies in privatizing public municipal parking around the U.S., is being sued in federal court for failing to pay overtime. The “collective action” suit claims, among other things, that “Pursuant to a centralized, company-wide policy, pattern and practice, Defendant classified, and paid all of its AMs, as exempt from the overtime compensation requirements of the FLSA and state overtime laws. (…) During the relevant period, Defendant knew or recklessly disregarded the fact, that the FLSA required it to pay employees performing primarily non-exempt duties, an overtime premium for hours worked in excess of 40 per workweek.” Terrell Day, the lead plaintiff, is represented by Fran Rudich, a partner with Klafter Olsen & Lesser. “‘Corporations have long sought to unlawfully shield themselves from paying required wages to workers by intentionally misclassifying assistant manager positions as exempt from the overtime laws,’ Rudich said via email. ‘Wage theft is wrong, and this lawsuit seeks to help these assistant managers recover what they are owed.’”

4) National/Massachusetts: Matt Damon criticizes school privatization. “Damon, a Cambridge native, narrated Sarah Mondale’s film ‘Backpack Full of Cash,’ a 2016 documentary about the movement to privatize public education. On Wednesday night, Damon joined Mondale, ‘Backpack’ co-producer Vera Aronow, and his mother, Nancy Carlsson-Paige, an activist for early childhood education, for a screening and discussion of the film.”

5) National: Diane Ravitch urges us to read a debate between an expert on school privatization and “an ideologue” from the Koch-funded Reason Foundation. Robert Abrams, director of the National Center for the Study of Privatization in Education, “was brave to go before a pro-choice crowd, and he won some of them over to the idea that there is actually something called the common good.”

Ravitch’s Network for Public Education has just launched a series of brief videos on the fight for public education. “NPE is fighting for the future and the very existence of public education. We oppose the relentless attacks on public schools, teachers, and the teaching profession by unaccountable billionaires, entrepreneurs, and public officials like Betsy DeVos. We oppose the status quo, in which privatization is offered as the remedy for inequitably funded public schools.” The first clip features Diane speaking to a group of parents, educators and other citizens in Brooklyn.

6) National: Speakers tell a packed meeting at the Municipal Bond Club of New York that muni exemptions, which support public works investment, are again at risk. “Though the industry has received assurances from the administration that the tax break will be preserved, the Government Finance Officers Association got mixed signals in recent talks with 46 members of Congress, said Emily Brock, director of the group’s Federal Liaison Center. The muni tax-exemption has been under fire since its inception in 1913, and Sen. Orrin Hatch, R-Utah, chairman of the Senate Finance Committee, left the exemption off a short list of tax breaks that won’t be on the table during the current tax reform effort.” [Sub required]

7) National: Is ICE needlessly and heartlessly moving around immigrant detainees to satisfy lockup quotas with private prison companies? The Denver Post is reporting, “ICE transfers immigrants held in detention around the country to keep beds filled. Then it releases them, with no help getting home. (…) With a court hearing on his immigration status in Texas less than a week away, he was more than 1,000 miles from home and had no clue how to make it back.”

8) National: Alternet’s Hannah Lownsbrough digs into “How JPMorgan Chase Is Cashing in on Private Prisons.” JPM’s Jamie Dimon is at a crossroads, she writes: “Now Trump has canceled DACA, JPMorgan Chase must decide how serious it really is about this newly discovered sense of social consciousness. For its stance on human rights to have real meaning, the corporation must divest from the private prison system.”

9) National: Citylab’s Virginia Pelley looks into “The Rise of Public-Sector Crowdfunding.” Pelley asks, “Around the country, local governments are soliciting donations for everything from dog parks to public defenders. Is this a practical response to budget cuts or a sign that publicly funded services are in trouble?” A key issue: “Governments also risk becoming dependent on outsourcing some functions to their constituents, says [Ethan Mollick, an associate professor of management and entrepreneurship at the University of Pennsylvania’s Wharton School]. ‘Readily available crowdfunding may change investment patterns by government, for better or worse. On the negative side, it could result in government pullback from needed services, or make it so that some services are only available to segments of communities that pay for them.’ Or, more positively, crowdfunding could spur responsible public-private partnerships, he speculates.”

10) National: Public interest groups and consumers are gearing up to fight a poultry industry drive to speed up federal inspections, which would impact food and worker safety. “Critics argued that previous USDA rule changes served to privatize some inspection functions that federal meat inspectors previously handled, and speeding up processing lines would make it harder to evaluate carcasses for signs of contamination. Even at current speeds, ‘a lone USDA inspector is checking 2.33 birds every second,’ says Food & Water Watch executive director Wenonah Hauter, ‘as opposed to the one bird every two seconds under the traditional inspection system.’” [Dow Jones Newswires, September 11, 2017; Sub required]

11) National: Pulling together some of the extensive critiques of Trump’s infrastructure plan, Lydia O’Neal and David Sirota write that “it’s all about privatization,” and point to Mike Pence’s promotion of the Indiana Toll Road privatization as an example of what can go wrong.

12) National: As state and local auditors and watchdogs get pushback from elected leaders, there is some good news: “On May 16, 86 percent of voters in Portland, Ore., approved a measure that provides the auditor’s office with more control over its budgeting, human resources, and contracting. The office will be getting a new staff attorney, who will operate independently of the city attorney. That’s as it should be, says Portland Auditor Mary Hull Caballero. ‘People need information they can rely on that is produced at a very high quality.’”

13) National/International: Fiachra MacFadden warns that if war and the military-industrial complex is further privatized, the profit motive will ensure that “we can forget about a future where war does not exist.”

14) National: A construction industry-funded poll finds that the public supports tolling that would benefit the construction industry, through ‘public private partnerships.’ “The responses appeared to confirm the strong overall support of the American people for increased infrastructure spending, but also highlighted some ideological divides. (…) Only 5% of respondents said infrastructure should be an entirely private affair, while 43% said it should be the government’s responsibility and 52% said they believed responsibility should be shared between the public and private sectors.” [Sub required]

15) Massachusetts: In what was perhaps a slip of the tongue last week, a local official in Acushnet has admitted that public workers are not only less expensive than outsourcing, but are often radically underpaid. And he has betrayed a certain allergy to public meetings into the bargain. Chairman of Selectmen Kevin Gaspar “said he was ‘100 percent behind this project,’ and supported using the DPW crews to do the work rather than seeking bids from outside contractors. ‘I’m extremely confident in the Department of Public Works to get this project done,’ he added. ‘Anytime you save the taxpayer’s money by keeping it in-house, it pays off. Paying prevailing wages for an outside contractor adds 40 percent to the costs,’ Gaspar said. ‘And this will not require a town meeting vote, because we’re not borrowing money.’”

16) Massachusetts: Unions are accusing the new head of the T of having a financial incentive to choose privatization over public operation of bus repair work. “They cite a provision in his own contract with the T that could pay him up to $32,000 in first-year bonuses based on his performance across 17 different goals. One goal is to “complete critical procurement processes currently underway,” listing the bus maintenance contract as an example. Mike Vartabedian, business agent for the Machinists Union Local 264, accused Governor Charlie Baker’s administration of putting the new general manager in an ‘unfair’ position where he has to measure the outsourcing plan against his own paycheck.”

17) Massachusetts: In a decision with national implications, “a Massachusetts charter school advocacy group has been ordered to make the names of its donors public, and pay the largest campaign finance fine in state history.” The dark money front group Families for Excellent Schools released the records, which include donations from numerous hedge funders and private equity kingpins from companies like Bain Capital, Adage Capital Management, Highfields Capital Management and Matrix Management.

18) New Mexico: With Estancia facing a loss of 60% of its gross receipts due to the imminent closure of the CoreCivic-operated Torrance County detention center, officials are scrambling to somehow keep the lockup open. “With CoreCivic recently issuing its 60-day notice to employees of its intent to close the jail, Romero said local officials were [not] given much time to respond. ‘You weren’t given any time,’ he said. ‘You can’t help it if others didn’t show up’ [at the public meeting to discuss the crisis]/”

19) Tennessee: Republican gubernatorial candidate Beth Harwell says if she is elected governor she won’t privatize services at Tennessee state parks. “Harwell, who is the speaker of the state House of Representatives, said privatizing hospitality, food and other services at state parks is a ‘touchy point for our rural areas,’ and that she would not pursue Haslam’s goals in that area.”

20) Tennessee: It looks as if Nashville, where the private, for-profit prison company CoreCivic has its headquarters, may be about to have a debate on divestment of city money from the funds holding the company’s shares. “‘I think it’s a conversation that needs to be explored, but to my knowledge we haven’t had the conversation yet,’ says council member Tanaka Vercher, who chairs the council’s budget and finance committee. ‘It never hurts to explore it or have a conversation about it.’”

21) Texas: Writing in the September issue of Prison Legal News, Bob Libal of Austin-based Grassroots Leadership gives a rundown of how private prison companies’ plan to license “baby jails” failed in the Texas legislature. “The private prison firms that run the detention centers spent big money pushing for the licensing legislation, according to a report released in April 2017 by Texans for Public Justice. That report found that private prison companies paid lobbyists $220,000 to $480,000 to advocate in the Texas legislature during the past session. GEO Group had previously told its investors that attaining licensure for its Karnes County family detention facility would allow it to detain children for longer periods of time, saying: ‘Presently, the center operates as a short-term processing facility and this licensing process will allow for longer lengths of stay.’”

22) Texas: Houston Metro chairperson Carrin Patman says that Hurricane Harvey demonstrated the importance of mass public transit and shortsightedness of planning based on building more and more roads. “Houston-Galveston Area Council researchers estimate that if vehicle miles traveled increase at the same rate as population growth, the Katy Freeway will need 40 lanes!”

23) Think Tanks: Writing in Public Administration Quarterly, Agustin Leon-Moreta concludes that special purpose districts, some types of which are considered a form of privatization, present local governments with tradeoffs between public accountability and overcoming fiscal limitations. [Sub required]

24) Think Tanks: The right wing Heritage Foundation (assets: $269 million), unsurprisingly, comes behind Trump’s government reorganization crusade. “The federal government owns and operates far too many private-sector endeavors,” Heritage’s Rachel Greszler tells lawmakers. “Congress and the President should work together to privatize: the Power Marketing Administrations; the Tennessee Valley Authority; the Strategic Petroleum Reserve; the Northeast Home Heating Oil Reserve; the Gasoline Supply Reserves; commercial nuclear waste management; Amtrak; Air Traffic Control; the Saint Lawrence Seaway Development Corporation; and Inland Waterways. The federal government should also seek pathways to shift retirement and disability insurance programs such as the Pension Benefit Guaranty Corporation and Disability Insurance programs to the private sector and it should sell off costly and underutilized federal lands and real estate.”

25) International: A major debate involving allegations of “state capture” and public corruption, a looming financial crisis at state-owned South African Airways, proposals to bail out SAA by partly privatizing Eskom and/or dipping into the national pension fund, is rocking South Africa. Calls for the privatization or partial privatization of state-owned enterprises are mounting up. In a statement on August 31, the Congress of South African Trade Union (COSATU) committed itself “to push back against a right-wing ideological model of the public sector that seeks to change the public service and parastatals to operate along the lines of the private sector. We shall therefore intensify our fight against the introduction of private-sector practices such as public-private-partnerships, outsourcing, agencification, privatization, etc.”

Legislative Issues

1) National: As labor unions, civil rights, and progressive groups unite to oppose ATC privatization, Bill Shuster (R-PA) is still confident that an FAA reauthorization bill privatizing air traffic control will eventually pass. Lawmakers won’t be able to beat the September 30 deadline, but Shuster expects that after a short term refunding the larger bill will eventually pass. It remains to be seen if ATC privatization will survive. Opposition continues to be strong, including by six former team commanders of the US Air Force Thunderbirds and US Navy Blue Angels. “‘We are concerned about recently proposed legislation that would turn over America’s air traffic control to a private organization that would be controlled by the airlines and their allies,’ said Major General Brian Bishop (US Air Force, Retired), who flew in the lead position for the US Air Force Thunderbirds in 1998 and 1999.” [Video]

2) National: House Ways and Means Chairman Kevin Brady is “open” to incorporating funding for infrastructure investment into a tax overhaul, according to Politico. But Bloomberg is throwing cold water on the idea, citing Republican “tax enforcer” Grover Norquist: “Putting spending inside a tax reform package simply increases the deficit or reduces the size and power of potential tax cuts.” Moreover, Norquist not only opposes raising the gas tax, “but wants to turn the current proceeds back to the states.”

3) National: Sens. John Hoeven (R-ND) and Ron Wyden (D-OR) write an op-ed in the Bond Buyer supporting their Move America Act, which would create Move America Bonds allowing state and local governments to attract private capital into public infrastructure. “The bill expands tax-exempt private activity bonds and creates a new infrastructure tax credit, helping finance infrastructure projects through private-public partnerships. This would help stretch taxpayer dollars by lowering overall costs while also giving state and local governments flexibility to construct the infrastructure they most need, such as roads, bridges, transit, ports, rail, airports, water and sewer facilities and broadband.”

4) Arkansas: State Rep. Dan Douglas (R-Bentonville), who is running for reelection, wants to privatize “parts of government” to balance the budget. “A prime prospect for such a reduction and possible privatization is the state Department of Information Services, which runs the state’s computers, telephones and other information systems, Douglas said.”

5) Maryland: Gov. Larry Hogan (R) is digging in his heels after being rebuffed over his plan for schools privatization. He is now refusing to sign the education budget over the issue. “The Protect Our Schools Act passed by the Assembly this year prohibits the state school board from requiring test scores to count for more than 65 percent of a school’s performance ranking. And it would prevent the state from taking several actions to improve those schools, including converting them to charter schools, bringing in private management, giving the students vouchers to attend private schools or putting the schools into a special statewide ‘recovery’ school district.”

 

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