Headlines
CBO: Toll roads are not free money
NY: Gov’s landlord hopes to double its money from privatized state building
FL: Prison privatization plan may be crumbling in Florida Senate
FL: Senator booted off budget panel over privatization
FL: Water privatization proposal scrapped
FL: North Miami teacher called to principal’s office after call from the mayor
LA: State agencies hoping to privatize some services
CBO: Toll roads are not free money
A report released last month by the non-partisan government analysts at the Congressional Budget Office (CBO) found the purported benefits of this financing mechanism were mostly illusory, as taxpayers end up paying roughly the same amount either way. “The case is sometimes made that using funds from private capital markets to finance roads can increase the resources available to build, operate, and maintain roads,” the CBO report stated. “But the sources of revenues available to pay for the cost of a highway project — whether it uses the traditional financing approach or a public-private partnership — are the same: specifically, tolls paid by users or taxes collected by either the federal government or by state and local governments. Therefore, absent restrictions on governments’ ability to borrow, there is no difference between the amount those governments could raise themselves and the sums that public-private partnerships could raise because the same resources are available to remunerate investors in either case.”…”In order to properly assess the difference in costs between securing financing through the traditional approach (generally as public debt) and obtaining it by private means, it is necessary to account not only for the interest paid on money borrowed for the project but also for the costs associated with the risks borne by taxpayers and the costs of financial transfers — in the form of subsidized interest rates and advantageous tax treatment — from the federal government to states and localities,” the report explained. “If such a comprehensive measure is used, the costs of private and public financing are roughly comparable.” A copy of the report is available here. The Newspaper
NY: Gov’s landlord hopes to double its money from privatized state building
The landlord for Gov. Andrew Cuomo’s office in Midtown Manhattan is putting 10 floors in the building up for sale — at twice the price it paid to buy the space from the state just five years ago. Time Equities paid $103 million — or about $540 a square foot — in November 2006 to buy the top 10 floors of 633 Third Ave. from the Empire State Development Corp., a state agency that was moving downtown…The space is now for sale at $1,075 a square foot, says Time Equities’ director of office leasing and sales, Brandon Medeiros…The governor’s lease expires in June 2013…The $3.4 million annual rent bill is by far the highest price per square foot that state government pays to rent space anywhere in New York — and almost double what another state office pays for space in the same building….The comptroller’s deal was reached in 2003, at a down time for the real estate market, she said, while rents had rebounded by the time the governor’s office signed its lease in 2006….“This is just another example of how a state economic development program has benefited a large corporation and not the economy of the state,” Brodsky said. “There is no reason in the world for this company to have a subsidized transaction and not have to share or to repay that subsidy once they make a profit.” The New York World
FL: Prison privatization plan may be crumbling in Florida Senate
A massive plan to privatize 28 correctional facilities in South Florida appeared to be crumbling Wednesday as opposition to the plan that would cost the region nearly 4,000 jobs rose in the Florida Senate. The plan – scheduled to be debated on the Senate floor Wednesday – was abruptly yanked off the calendar by Senate President Mike Haridopolos, R-Merritt Island, amid reports that as many as 20 Republicans and Democrats were prepared to kill it. Earlier, Gov. Rick Scott called in two critics in an apparently unsuccessful attempt to change their minds. Haridopolos also stripped one of the plan’s principal critics – Sen. Mike Fasano, R-New Port Richey – of his chairmanship of the budget committee that oversees prisons, saying he had “he had “lost confidence” in Fasano’s ability to help the Senate come up with a budget for the state. Fasano compared him to a “schoolyard bully.” At the end of the day, the bill was in limbo. “At this point, I’m not ready to bring it up to vote,” Haridopolos told reporters. The House Appropriations Committee on Wednesday morning pulled discussion of a similar plan from its agenda without comment. Orlando Sentinel
FL: Senator booted off budget panel over privatization
Florida Senate President Mike Haridopolos on Wednesday removed a veteran GOP legislator from a budget panel after he fought a plan to privatize prisons, saying he had lost confidence in the lawmaker’s willingness to cut government costs. Haridopolos said he was stripping Sen. Mike Fasano of his chairmanship of the Senate budget subcommittee that oversees spending on prisons and the courts. He was also removed from the main budget committee. “I had lost confidence in him to build (on) the mission” of cutting the cost of government, Haridopolos told reporters. “It was a very difficult decision, but I just felt he was not rowing in the same direction. He was not ready to make the tough choices. He couldn’t handle the responsibility.” The move, however, could upset the perceived collegial working atmosphere of the Senate at a time that it is dealing with a billion-dollar budget gap and the once-a-decade job of redistricting. The Florida Education Association and Florida AFL-CIO, which represents many public workers, were swift in firing off press releases criticizing the move as “political payback” for privatization interests. But Fasano, of New Port Richey, said he’d “wear the loss as a badge of honor” for speaking up “for the little guy.” Miami Herald
FL: Water privatization proposal scrapped
Under pressure from environmentalists, Tampa Mayor Bob Buckhorn and Rep. Dana Young, R-Tampa, scrapped a controversial proposal Wednesday to “privatize” the state’s treated wastewater. HB 639 as originally written would have changed the definition of “reclaimed water” to place ownership with local governments and utility companies, something Buckhorn was pushing for to help replenish Tampa’s water supply. Environmentalists objected, saying the resource would no longer belong to Florida citizens, but to governments and utility companies that may be tempted to sell to the highest bidder. So instead Young pitched, and unanimously passed by committee, a version that forbids water management districts, which control water for the state, from forcing cities and utilities to give away water they pay to treat. Tampa Bay Times
FL: North Miami teacher called to principal’s office after call from the mayor
A North Miami science teacher who spoke at a public meeting with her children is incensed after the city’s mayor called her school to complain…The reason: The city’s mayor had called Principal Bernard Osborn after Futterman and her two children spoke out against a controversial waste contract at a recent North Miami council meeting. Futterman, who has one of Mayor Andre Pierre’s children in her class, said she was flabbergasted. “Who is he to call my place of employment?” said Futterman, who lives in North Miami. “I am offended as his son’s educator and as a citizen.” The Jan. 24 meeting drew a packed room, with a spillover audience watching from the lobby as the council heard public comment about a plan to privatize the city’s garbage services. The proposal has been the subject of scandal and controversy for months: The mayors nephew and reelection campaign manager, Ricardo Brutus, was arrested in March for allegedly accepting $4,000 from a local businessman to ensure the ordinance was delayed until after the election. Brutus was caught on tape describing his influence in City Hall, although he has denied wrongdoing and Pierre has sought to distance himself from the case…Pierre said he called the school out of concern for comments made by Futterman’s children — although he said he didn’t realize their mother was a teacher at the school…Futterman’s children, like their mom, had questioned the council about whether the new plan would include recycling. Miami Herald
LA: State agencies hoping to privatize some services
Two state agencies served notice Wednesday that they want to privatize some of their services by mid-year, moves that could cost more than 200 state employees their jobs. The proposals to outsource some jobs to private contractors were pitched to the state Civil Service Commission by the Office of Student Financial Assistance and three units of the Department of Health and Hospitals. The commission will not act on the proposals until the agencies return with proposed contacts, indicating how much they cost and how much can be saved for taxpayers. The Times-Picayune