News
Review: Why Privatization Fails
In the early 1980s, New York City’s and London’s subway systems were both on the brink of collapse. . . . To bring them back from the brink, the powers that be in both cities realized massive investment was needed. But where was the money to come from? They rejected the idea that national, state, or local taxes should provide it. Borrowing was one alternative. New York’s Metropolitan Transportation Authority in the mid-1980s began issuing bonds worth billions of dollars; funds from the fare box were committed to repay them. Thirty years later, the MTA projects 41 percent of fares next year will go to debt service. That’s money that is not available to expand service or settle fair contracts. London went a different route, choosing in the 1990s to privatize parts of the London Underground in what was known as the Public-Private Partnership (PPP). . . .The PPP was supposed to continue for 30 years; it lasted just seven. A new book by Janine Booth, Plundering London Underground, tells its story in great detail. It is a story that anyone concerned about attacks on the public sector, or efforts to privatize public services, should know. Labor Notes (blog)

LA: Teachers union sues Louisiana to de-fund some charter schools
The Louisiana Association of Educators has sued the state of Louisiana to block it from using its main school budget to fund certain types of charter schools, saying such funding is unconstitutional. A decision in the association’s favor could pull $60 million from about 25 schools, including Belle Chasse Academy, the International School of New Orleans and Jefferson Chamber Foundation–East, requiring the state to find another way to fund them. The move was spurred by last year’s Louisiana Supreme Court decision on voucher schools and by anger among local school board members over state-approved charters in their parishes. The Times-Picayune

LA: A Jindalcare unhealthy privatization horror story
On Tuesday, September 23, our school-aged son was given a commonly prescribed medication by his physician. My wife attempted to get the pharmacy to fill it. We were shocked and horrified to find that it was rejected by our health insurance: Office of Group Benefits HMO Plan through BlueCross, a health insurance plan for Louisiana public employees. . . . You will recall that OGB was privatized under Gov. Bobby Jindal, and nearly all of the $500,000,000 trust fund has been stolen. Soon, all money dedicated to funding state workers’ insurance will be gone. The money was pilfered by Jindal in an effort to fill holes in his economically disastrous state budget. But this will mean 230,000 Louisiana citizens are about to lose all semblances of health coverage on January 1. Bayou buzz

KS: Kansas Democrats call for ethics probe of KanCare contracts
Democrats in the Kansas Legislature called Monday for establishing a special committee to investigate allegations of “pay-to-play” schemes involving contracts awarded by Gov. Sam Brownback’s administration to manage the state’s privatized Medicaid system known as KanCare. . . . Both Ward and Kelly serve on the Legislature’s KanCare Oversight Committee, which is charged with monitoring the performance of the privatization program. The Topeka Capital-Journal first reported in April that the FBI was investigating whether laws were broken when the KanCare contracts were awarded to companies that had hired former Brownback aides as their lobbyists. Lawrence Journal World

MI: Schuette to investigate Aramark employee suspected in murder plot against Michigan inmate
. . . . An Aramark worker at Kinross Correctional Facility in the Upper Peninsula is accused of approaching an inmate to have another killed. . . . The allegations are the latest in a string of troubles for Aramark, a private food service vendor that won a three-year, $145 million contract with the state late last year. Company workers have also been accused of smuggling drugs into prisons and having sex with inmates. Republican Gov. Rick Snyder announced a $200,000 fine against Aramark earlier this year, but critics have called on him to terminate the contract and end all privatization inside prisons. MLive.com

MI: Detroit bankruptcy judge says he can’t stop water shutoffs
Detroit’s bankruptcy judge says he can’t prevent homes from having their water shut off, if they can’t pay their bills. Critics call the shutoffs a public-health crisis that disproportionately affects children, the poor, and the elderly.. . . . Rhodes’ decision comes days after the Detroit city council voted unanimously to remove Detroit emergency manager Kevyn Orr, an option under state law after an emergency manager has served 18 months. . . Leadership will be returned to Detroit Mayor Mike Duggan (D) and the city council. Orr will stay in an advisory capacity, as the city completes its bankruptcy proceedings.  Christian Science Monitor

IL: Could Chicago’s Rahm Emanuel lose his re-election race?
. . .A Chicago Tribune poll released in August, for example, shows that 35 percent of likely voters approve of the job he has been doing, down from 50 percent about a year ago. The results are similar regardless of voters’ race, income, age or gender. . . The polling results reflect a growing tension over leadership in Chicago. . . .Critics say Emanuel, who once earned more than $18 million over a two-year period as a Wall Street investment banker, professes concern for struggling households, but has done little on their behalf. They say his many unpopular measures — a rollout of traffic cameras, privatizing public transit and expanding charter schools amid mass teacher and custodian layoffs — contradict the mayor’s narrative that he is fighting for all of Chicago. “The Emanuel tenure has been a huge wake-up call for a lot of people,” says Tim Meegan, a high school social-studies teacher who is running for city-council alderman in the city’s 33rd Ward, an ethnically diverse area on the city’s northwest side. “He’s not a working-class guy from the streets of Chicago, and he’s refused to compromise except to the 1 percent. He’s so insulated that he doesn’t really understand the city he has been charged with governing.” Al Jazeera America

News
Debating What Is More Sacred: Private Land or Public Beaches
Texas has long prided itself on its Open Beaches Act, which guarantees public access along most of the state’s 367-mile Gulf Coast. But public beach advocates say a recent Texas Supreme Court decision — which is supported by the front-runner in the race to be the next land commissioner — and a growing property rights movement could endanger that guarantee. Advocates fear that as beaches are hit by coastal erosion, rising sea levels and the threat of powerful storms, private property rights could take precedent over access to public beach access. “We have two rock-solid principles: public access to public beaches, and the right of private owners to exclude others from the property which is theirs,” said David Abraham, a law professor at the University of Miami. “They’re always in tension, but if we face issues like sea-level rise and increasingly severe storms, there’s going to be less stability in that balance.” New York Times

Majority of Western Voters Oppose State Takeover of National Parks and Forests
. . . Bipartisan polling found 59% of respondents disagree with the idea of states taking over public lands, fearing such a move would cause them to pay higher taxes and lose access to the lands themselves if they’re sold off to private interests. Several Western state legislatures have considered proposals that would demand that federal public lands such as national parks and forests and property under control of the Bureau of Land Management be given to the states. AllGov

When Hedging Goes Awry, On The Road And Aloft
. . .This week saw the bankruptcy filing by the company that in 2006 paid the state of Indiana $3.8 billion for a 75-year lease to operate the Indiana Toll Road. What went wrong was not just a recession-induced 10.5 percent decline in traffic on the road between 2007 and 2013, but a hedging strategy. In an effort to protect against interest rate fluctuations, the company and its two affiliates in 2006 had entered into interest rate hedging, or “swap” transactions with banks or other financial institutions. They “agreed to pay the Swap Counterparties [the financial institutions] a fixed rate of interest in exchange for receiving from such Swap Counterparty a floating interest rate,” the bankruptcy filing says. No one expected interest rates to plummet, but after the 2008 financial crisis, they did, falling “to historic lows, creating a substantial net obligation” of $2.15 billion for the toll road company.  Roll Call (blog)

IN: How The Toll Road Bankruptcy Could Impact Indiana
Indiana lawmakers disagree on how this week’s Toll Road bankruptcy filing could impact Hoosiers. Some say a 2006 agreement between the state and the Indiana Toll Road Concession Company protects consumers and the government in the event of a default. But, other lawmakers claim the Toll Road has fallen into disrepair since the privatization and worry maintenance will become even worse. Indiana Public Media

IN: VIEWPOINT: OK, so when can Indiana get its Toll Road back?
Remember the unmistakable promises by our governor at the time, Mitch Daniels, who bragged that his 75-year lease of the Toll Road was the “best deal since Manhattan was sold for beads” and that if the road went belly up, the state could simply take it back? . . . Our governor even had Goldman Sachs, the Wall Street investment house that was at the center of the financial crisis in 2008, paid $20 million back in 2006 to advise the state on the transaction. Certainly the governor and his friends at Goldman Sachs should feel some obligation to point out in the contract a reversion clause superior to those held by the banks, lien holders and hedge funds lining up for a piece of the restructured Toll Road debt? South Bend Tribune

FL: Privatizing prison health care leaves inmates in pain, sometimes dying
. . .Handing off prison inmate medical care to for-profit companies was designed to deliver tens of millions of dollars in taxpayer savings beginning in 2012. But for inmates, it has come with cold-blooded consequences, a Palm Beach Post investigation found. Just months after all medical care in state prisons was privatized, the count of inmate deaths spiked to a 10-year high in January and continued at a record pace through July. Doctors have expressed alarm. The number of seriously ill prisoners sent for outside hospital care is on track to drop by 47 percent from 2012, the last year for which the state handled medical care. Inmates say prescription painkillers are abruptly replaced with over-the-counter drugs such as ibuprofen. CorrectionsOne

FL: Inmate death in private transport van in Miami-Dade raises questions
. . . And when the two transport officers finally saw that she was unresponsive in the Taco Bell parking lot, they first called their superiors in Tennessee. Only after unsuccessfully trying to revive her did the officers dial 911, sources said. . . . Last year, two company agents left their transport van unattended in Oklahoma, and the inmates broke through a partition and drove away. In 2009, the company lost two inmates in high-profile escapes during a six-month span. . . . The Miami incident raises questions about whether the company had proper procedures and training — vital concerns often overlooked by governments looking to save money by outsourcing public safety functions, said Donald Cohen, executive director of In the Public Interest, a nonprofit group that studies privatization. Miami Herald

MO: Plan to privatize mental facility stuns workers
It was not the rescue plan supporters of Cottonwood Residential Treatment Center had in any way hoped for. Employees say a new state plan to privatize and restructure the youth psychiatric facility may be better than a previous one to shut it down. But many suspect the cost-cutting plan will leave children and youth without appropriate treatment. St. Louis ‎Post-Dispatch

LA: Jindal under fire in La. for health care
. . . Jindal’s former health secretary Bruce Greenstein was indicted last week for lying about his involvement in the awarding of a $200-million Medicaid contract, a deal the administration didn’t cancel for several years despite ongoing questions about Greenstein’s involvement. The Republican governor’s privatization of the LSU charity hospital system remains under scrutiny with federal officials who rejected the first set of financing plans for most of the deals and who continue to raise questions about the rewrite. . . . Jindal privatized the hospitals without waiting for federal officials to sign off on the financing arrangements. Without that approval, the contracts can’t work because there’s not enough money to support them, and the state could have to repay what it’s already spent on them. Opelousas Daily World

MI: Effort to privatize Detroit parking likely to expire without Orr
Kevyn Orr’s impending departure from Detroit means an idea to privatize the municipal parking department is as likely to expire as a city parking meter. Day-to-day control of the city was transferred back to the mayor and City Council last week per a council vote. Orr is retained solely to oversee the bankruptcy case. His remaining task as emergency manager is to usher the city’s plan of adjustment through confirmation before U.S. Bankruptcy Judge Steven Rhodes. With Orr focused on navigating the city’s exit from bankruptcy, his spokesman said the parking plan is now parked in the hands of the city’s elected officials. Crain’s Detroit Business

NC: Opinion: NC justice system failing mentally ill inmates
. . . The Treatment Advocacy Center recently stated “There is probably no state where mental health services have deteriorated as much as they have in North Carolina over the last decade. The efforts to privatize the system have been a disaster…” Asheville Citizen-Times

 

 

 

 

News

Are Venture Capitalists Poised to ‘Disrupt’ Education?
. . . Next year, the market size of K-12 education is projected to be $788.7 billion. And currently, much of that money is spent in the public sector. “It’s really the last honeypot for Wall Street,” says Donald Cohen, the executive director of In the Public Interest, a think tank that tracks the privatization of roads, prisons, schools and other parts of the economy. That might be changing soon as barriers to investment are rapidly fading. As Eric Hippeau, a partner with Lerer Ventures, the venture capital firm behind viral entertainment company BuzzFeed and several education start-ups, has argued, despite the opposition of “unions, public school bureaucracies, and parents,” the “education market is ripe for disruption.”. . . “There’s a dramatic shift in how investors are thinking about this industry,” Fahad Hassan, an education entrepreneur with his own venture-backed start-up, told a meeting of entrepreneurs earlier this year.The explosion of investor interest in education raises a number of questions, among them: What kind of influence will the for-profit education sector attempt to exert over education policy? And if school reform is crafted to maximize the potential for investor profit, will students benefit, as boosters claim — or will they suffer?  The Investigative Fund

CA: Surfers Defeat Silicon Valley Tech Billionaire to Gain Access to the waves
A California state judge on Wednesday ruled that tech mogul Vinod Khosla illegally denied surfers and other members of the public access to Martin’s Beach, a stretch of pristine California coast south of San Francisco that the venture capitalist and green tech investor had purchased for nearly $33 million in 2008. The state’s landmark Coastal Act requires that even private property owners must provide public access to beaches, and the previous owners of Martin’s Beach had for decades opened the gates to surfers, beachgoers, and other nature lovers as long as they paid a parking fee. . . . The case quickly became a proxy for San Francisco’s culture wars, pitting a newly enriched tech elite spawned by Facebook, Google, and Twitter against the countercultural ethos of the Bay Area. If tech millionaires and billionaires could privatize the transportation system—symbolized by the Google buses ferrying employees from San Francisco to Silicon Valley—could they do the same to the coastline?  No, according to San Mateo County Superior Court Judge Barbara Mallach. On Wednesday, she ruled that by painting over a billboard that had invited the public to come to Martin’s, Khosla’s company denied Californians their constitutional right to hit the beach.  TakePart

IN: Indiana Toll Road rates and revenue are up, traffic has been stagnant
Toll rates for cash customers on the Indiana Toll Road are up. Not surprisingly, revenue is up, too. Way up. Traffic, though, is down, at least compared to 2008. Those are a few takeaways from some of the Indiana Toll Road operational figures, provided by Macquarie Group, one of the investors in the Indiana Toll Road Concession Co., or ITRCC, the private firm that operates the roadway.  The Elkhart Truth

TX: City Attorney: Dallas council could vote against funding toll road
For years, top staff for the city of Dallas have told council members and the public that the city’s commitment to build the Trinity River toll road is locked in an ironclad contract with the NTTA that must be honored. But that 15-year-old agreement, which I wrote about in June, is anything but ironclad and in no way binds the current or future city councils, according to an opinion from City Attorney Warren Ernst. . . . For as long as the city has been debating the toll road, city staff and road backers have parroted the line that this contract with NTTA more or less prevents City Hall from doing anything but paying to build the road. The fact is, according to their own lawyer, the city is bound to very little with the NTTA. Dallas Morning News (blog)

LA: State leaders, policy makers call for an end to billing rape victims
State health leaders, policy makers and advocates spoke out Thursday, calling for an end to the practice of billing rape victims for forensic medical evaluations and care. . . A story and video published by NOLA.com | The Times-Picayune on Thursday described the shock rape victims and their families experienced when they received bills ranging from $1,700 to $4,000 after going through the hours-long process of being medically evaluated following a sexual assault. . . . Before the state transferred control of the hospital from Louisiana State University to a private entity last year, Tonkovich said, nurses were told to assure victims they would not be responsible for any costs associate with their care. The Times-Picayune 

MS: Child support privatization protest
A rally in the capital city Thursday evening protested the privatization of child support. The rally took place in Smith Park and was led by state workers and community leaders. The focus of the event was to bring awareness to the effects of privatizing child support. Organizers are calling for a Halt to the Plan for a Big Corporate Takeover of Mississippi’s Public Services. They say it takes away money from the children that it is supposed to help. Mississippi News Now

New Paper Examines Boundary Between Public and Private Policing
A new paper authored by Malcolm Sparrow, professor of the practice of public management, provides in-depth analysis of the opportunities and challenges provided by this new reality.  “It is no longer useful for public police to hang on to their own regrets about these trends, bemoan their loss of market share, or pretend that public/private partnerships cannot be useful,” Sparrow writes. “There are too many reasons to embrace the idea that private contributions can and should contribute to public purposes.”  Harvard Kennedy School

TX: Private firm has power to seize land for toll road. On Monday, the North Central Texas Council of Governments held a public meeting about plans for the Northeast Gateway Project, and nearly 1,300 concerned citizens showed up for it. Also invited was the Texas Turnpike Corporation, a private company where Neal Barker is a board member. “We believe now is the time when a private corporation solution works,” Barker said. . . . But people like the Shaffers have a hard time understanding how the state could let a private company have eminent domain powers that could seize property for such a project. . . . In 1991, the state repealed a law that permitted the formation of private toll companies. The Texas Turnpike Corporation was grandfathered in because it had formed before the repeal was enacted. “It may be deemed legal, but it will never be right,” Shaffer said. WFAA

 

MI: Police: Prison worker suspected of seeking hit

. . . Corrections Department spokesman Russ Marlan confirmed that an Aramark employee was banned from Kinross for “alleged criminal behavior.” Aramark spokeswoman Karen Cutler said she wouldn’t comment on an active police investigation. Aramark’s work and its three-year, $145 million contract with Michigan have been under scrutiny. Michigan fined the company $200,000 last month for unapproved menu substitutions, inadequate staffing and employee misconduct. An independent monitor is in place. Ohio also has fined Aramark for similar contract violations. . . .Michigan’s contract with Aramark runs through Sept. 30, 2016. Democrats have called on Republican Gov. Rick Snyder to cancel the deal, saying problems were inevitable because of high turnover and lower pay for private workers who replaced roughly 370 state employees. The governor has defended the decision to stick with the food vendor, saying the state is on pace to save $14 million a year through privatization. Washington Times

 

IL: Can Rahm clean up the mess he’s made with school janitors?

. . . Back in the days of Mayor Richard J. Daley, CPS employed its own janitors. They were paid a pretty decent wage with good benefits and a pension. Then, in the 1990s, the second Mayor Daley—Richard M.—fired a bunch of CPS janitors and replaced them with hires from a private company, which received contracts worth millions of dollars while paying its janitors less money with fewer benefits. Mayor Daley promised that he was saving precious taxpayer funds—an old refrain in the privatization game. “We did the same work, but we don’t get the same money,” says a janitor I’ll call Billy, who works for a private firm. . . . “They took janitors out of the school they knew and put them in schools they didn’t know,” Billy says. “We didn’t do the hard cleaning—getting into those corners—like we usually do. We’d do a little cleaning at one school and then they’d move us to another one. I don’t know what they were thinking.” In late August, just before schools opened, the papers filled with reports from outraged school principals about mouse droppings, overflowing waste baskets, dirty halls, and other signs of filth. And then last week, pink slips went out to 500 privatized janitors.

Chicago Sun-Times

 

NC: Wos argues against Medicaid privatization

The state’s health secretary pushed back again Wednesday against a N.C. Senate proposal to privatize state Medicaid through the creation of a state Department of Medical Benefits. . . . The N.C. House, Gov. Pat McCrory and Wos have opposed the privatization proposal for months. They prefer massaging the existing system with more risk-reward responsibility to providers as part of fleshing out an Accountable Care Organization initiative. “The way to improve the Medicaid program is not to pull the Division of Medical Assistance from the department,” Wos said. “The path to improvement is to implement better management, budget forecasting, staffing and communication. Greensboro News & Record

 

PA: York City, PA rallies against privatization

York students, educators and families fight against a plan by politicians to completely privatize York public schools. flickr.com

 

The $1-Billion-a-Year Right-Wing Conspiracy You Havent Heard Of

Have you heard of the $1,750-per-person “Gathering,” which starts Thursday in Orlando, Florida? Probably not. But if you’re female, gay, non-Christian, or otherwise interested in the separation of church and state, your life has been affected by it. The Gathering is a conference of hard-right Christian organizations and, perhaps more important, funders. Most of them are not household names, at least if your household isn’t evangelical. But that’s the point: The Gathering is a hub of Christian Right organizing, and the people in attendance have led the campaigns to privatize public schools, redefine “religious liberty” (as in the Hobby Lobby case), fight same-sex marriage, fight evolution, and, well, you know the rest. They’re probably behind that, too. Daily Beast

 

News
IN: Lessons of the Indiana Toll Road Bankruptcy
. . . Caitlin Devitt who has a good account of the fallout from the bankruptcy filing in The Bond Buyer, quotes Standard & Poor’s analyst Anne Selting who said toll roads are among the riskier public-private partnerships because “they’re obviously completely dependent on volume and user projections.” And toll road guru Robert Poole said the concession had relied on “a very aggressive financing structure, requiring large debt service payments toward the end of the first decade of the 75-year agreement.” He added that in considering bids from private-sector companies for toll road deals, states should not “base competitions on maximizing such up-front windfalls” as Indiana got with the $3.8 billion it collected. “For one thing, they may well lead the winning bidder to take on excessive debt that jeopardizes its ability to run the project as a business.” You can see how crucial traffic forecasts are to these toll road deals by reading bond analysts’ rating reports.
Roll Call (blog)

IN: Critics of privatizing Indiana Toll Road worry bankruptcy filing will lead to spending cuts
Critics of privatizing the Indiana Toll Road said they are worried that the operator’s bankruptcy filing this week will result in less money being spent on the highway. Chicago-based ITR Concession Co. is seeking to sell the toll road lease to a new operator, saying in its filing to the U.S. Bankruptcy Court in Chicago that it can’t afford the debt payments from the 2006 deal under which its parent company, the Spanish-Australian consortium Cintra-Macquarie, paid Indiana $3.8 billion for the rights to run the highway and keep the toll revenue. Democratic state Sen. John Broden of South Bend, who voted against the lease deal in the Legislature, said Monday he doesn’t believe assurances that the bankruptcy won’t mean any significant changes to the highway’s operations. “If someone buys this they are going to immediately be confronted with the question of how can we run this thing cheaper?” Broden said. “They are going to look for cost savings and cost savings are going to come in the form of fewer employees.”
Greenfield Daily Reporter

TX: Collin County Residents Hope To Slam Brakes On Proposed Toll Road
On Monday night, Christine appeared at a North Central Texas Council of Governments meeting along, along with more than 1,200 others, to try and slam the brakes on the proposed toll road. The consensus of the crowd was — there isn’t a need for it. But Hunt County Commissioners Court Judge John Horn says the county, and various elected leaders in their area strongly support a toll road. Horn says the toll road is needed because of the area’s projected population growth, and because there’s no state money to widen Interstate-30. “TxDOT has not presented us with anything that shows right now any expanded capacity along I-30,” he said. The Texas Turnpike Corporation, a privately held company, proposed the toll road.  CBS

News

Higher ed’s obscene profit scheme: Schools, banks and the government win — you drown in debt. Imagine corporations that intentionally target low-income single mothers as ideal customers. Imagine that these same companies claim to sell tickets to the American dream — gainful employment, the chance for a middle class life. Imagine that the fine print on these tickets, once purchased, reveals them to be little more than debt contracts, profitable to the corporation’s investors, but disastrous for its customers. And imagine that these corporations receive tens of billions of dollars in taxpayer subsidies to do this dirty work. Now, know that these corporations actually exist and are universities. Salon

IN: Indiana Toll Road Operator Files for Bankruptcy. The debt-stricken operator of an Indiana Toll Road filed for bankruptcy protection Sunday with a plan to restructure some $6 billion in debt by selling its assets or reorganizing its business. . . .The company Ferrovial SA and Australian investment bank Macquarie Group Ltd. , said it will follow a two-track restructuring process. . . . The 157-mile toll road, which runs through Indiana between the Ohio Turnpike and Chicago Skyway, has struggled for years with a heavy debt load and lower-than-expected traffic. It missed an interest payment in June, which helped accelerate restructuring talks with the hedge funds that bought the road’s bank debt.  Wall Street Journal

CA: Poll: 78% oppose pushing toll road through San Onofre preserve. . .Opponents of a plan to extend the 241 tollroad feared it could harm Trestles, the popular surf spot. (Allen J. Schaben / Los Angeles Times) Foundation officials say they conducted the survey because they believe the Transportation Corridor Agencies in Irvine, which operates 51 miles of tollways in Orange County, still wants to extend one of its highways, State Route 241, across San Onofre to link up with Interstate 5. The controversial proposal was rejected in 2008 by the California Coastal Commission and the U.S. Department of Commerce after a lengthy battle between the TCA and park users, surfers, environmentalists and various community organizations. Los Angeles Times

TN: Study: Growth in charter schools will strain Metro district. . . Total enrollment growth among Nashville’s charter schools is significantly outpacing the rest of Metro schools, imposing fiscal strains on the district that could deepen if this trend continues. That’s a central takeaway in a study performed by an outside consultant, MGT of America, hired by Metro Nashville Public Schools to explore the financial costs tied to opening publicly financed, privately run charters; 26 are set to operate in Davidson County by next fall.  The district’s overall student enrollment is expected to grow to a projected 84,828 students next year, a jump of less than 1 percent. The charter sector, though, is growing at a faster rate as students leave traditional zoned schools. While the enrollment of Metro-managed schools is expected to shrink marginally during that time, the firm forecasts a 21.5 percent jump in students attending charters. “If this trend continues, MNPS will begin to receive a lower amount of state and local tax revenues for MNPS-managed schools and will be required to address budget allocation issues related to declining resources in future years,” it reads.The Tennessean

PA: The City That Turned Its Water Into Cash. . . On April 25, 2013, the Allentown City Council met to vote on a proposal to authorize Mayor Ed Pawlowski to sign a 50-year lease of the city’s water and sewer system to Lehigh County Authority (LCA), a public water and wastewater utility then already operating 13 municipal water systems in the area. The lease would give the city a big upfront payment of more than $210 million and a steady revenue stream into the future. . . .Vocal and angry objectors raised issues relating to the transparency of the bidding process and the city’s negotiations over the lease. Described by a local reporter as contentious and chaotic, with plenty of jeering and yelling, the meeting finally ended after midnight when the city council voted six to one to authorize the lease. The strongest argument against the deal was that it ultimately would lead to skyrocketing water bills.  As appealing as the upfront payment might seem, critics said, it is essentially “a costly loan that households and local businesses will repay through their water bills for decades. The Atlantic

 

News

New study identifies 11 highway boondoggles across the country
A new report by the U.S. Public Interest Research Group (U.S. PIRG) Education Fund identifies 11 examples of wasteful highway spending that are slated to cost at least $13 billion and are based on outdated assumptions of ever-increasing driving. The study calls on the federal and state governments to reprioritize scarce transportation dollars to other projects. “Americans have been driving less, but state and federal governments are still spending billions of dollars on highway expansion projects based on outdated and obsolete assumptions,” said Phineas Baxandall, Senior Analyst at U.S. PIRG and a co-author of the report. “The time has come to shift our resources to invest in 21st century priorities, like fixing our roads and bridges and providing more Americans with a wider range of transportation choices.” USPIRG

US infrastructure crisis drives toll road bankruptcy
One of the highest-profile US private toll road concessions is to seek bankruptcy protection, the latest sign of how a decline in traffic is threatening private investment in the crumbling US road network. The Indiana toll road company, backed by Spain’s Cintra and two funds managed by Australia’s Macquarie, has struggled under a $US5.8bn debt load and will file for bankruptcy on Monday. The decision to seek bankruptcy reflects rising indications that the century-long love affair between Americans and their cars might be cooling as young city dwellers are driving less. The fall in traffic volumes on US roads since 2004 has undercut the financial assumptions behind a series of deals devised in the middle of last decade during an infrastructure investment boom. Financial Times

Opinion: Don’t fall for boondoggle of privatizing VA health care
Republicans have tried to privatize Veterans Affairs health care since 1946. After 68 years, they are succeeding. In August, the VA was substantially privatized by Congress and President Obama — possibly 3 million of the 6.5 million veterans presently receiving VA care will get health care at private hospitals and clinics. Tens of billions of taxpayer dollars will be wasted. And we could lose the major example of cost effective health care in America. . . . Private care will cost taxpayers up to 30 percent more than VA health care, which is proven to be of better quality, with shorter appointment wait times than in the private sector. Patient satisfaction surveys are higher at the VA than at most private care facilities. It’s a bad law for veterans and taxpayers. But private care CEOs and stockholders will profit greatly. It is to last only two years but will be extended like every tax cut for the rich or corporations. Then conservatives will argue that VA hospitals should be closed because so few veterans are using them. Madison.com

GA: Georgia DOT calls off privatization project
Sometimes, it costs government agencies more to privatize services than to do the work themselves. The Georgia Department of Transportation discovered that this week. The agency’s governing board pulled the plug on an effort to privatize janitorial services and landscaping at the state’s 17 highway rest areas and nine welcome centers after being told it would cost more to hire a private company.  Atlanta Informer

IL: The dirt on privatization
Privatize the school custodians! . . . .So CPS awarded the no-bid contract to Aramark. Yeah, that Aramark–the ones who also now have the contract for school lunches. Aramark can handle the oversight of custodial services–Aramark can nimbly send custodians hither and thither as needed, doling them out with speed and accuracy–Aramark can save us all money! . . . But let’s fast forward to now, and see what has crawled out of those dug-up dark corners and crevices in the search for privatization buried treasure. Roaches, rats, and now even bedbugs. . . .One teacher slipped on a floor that had had the wrong stuff used on it, her feet went right out from under her, she landed on her shoulder, couldn’t move her head–just as students were trooping in for the day.”Teacher’s bathroom smells so bad it is hard to use it at all.””Garbage cans disappeared, stuff has been broken. Bathrooms are atrocious, garbage not emptied despite girls putting in tampons and such. Broken stuff not getting fixed because not enough staff anymore. Graffiti not getting cleaned up. Garbage left in hallways and on stairs.”ChicagoNow (blog)

News

MI: Editorial: Hey, Gov. Snyder: Prison food contract is rotten. Disgusting. That’s the only word to describe the way Michigan has handled privatization of its prison food service. A $145-million, three-year contract awarded to Aramark Correctional Services is saving the State of Michigan about $12 million a year (at the cost of 370 state jobs). But here’s what Michigan taxpayers are buying: Maggots in food prep areas and near prisoners’ food; employees engaging in sex acts with inmates, and the services of two enterprising Aramark workers who smuggled in drugs — one brought 39 packages of heroin, cocaine, marijuana and tobacco into a prison. . . . Critics of privatization say the state’s guidelines focus on only one thing: Whether privatization will save the state at least 5%, with no focus on quality. They’re absolutely right. The problem is that as guardians of the public trust, state officials owe citizens a lot more. Considerations about how services are delivered matter. So do thoughtful analyses of whether a private contractor is sufficiently sensitive to the goal of the public service they’re seeking to provide.  Detroit Free Press

MI: Michigan Dems propose charter school moratorium, call for new oversight standards. Some Democrats in the state House are calling for a temporary moratorium on new charter schools in Michigan. . . . “Michigan has more for-profit charter schools than any other state in the nation,” said Roberts. “State law does not effectively prevent insider dealing and conflict of interest for those who operate charter schools, and yet they spend $1 billion of our taxpayer dollars every year.” The proposal comes in the wake of a Detroit Free Press series detailing instances of wasteful spending, conflicts of interest and poor academic performance by some charter schools, which receive public funding but are governed by different rules than traditional public schools. MLive.com

IN: Toll Road Operator Gets 90 Days To Prove It Can Pay Debts. The debt-ridden operators of the Indiana Toll Road have less than three months to prove they can meet financial obligations, according to state officials. Stephanie McFarland, a spokeswoman for the  government agency that oversees state-related debt, the Indiana Finance Authority, says the IFA sent a letter to the Indiana Toll Road Concession Co. late last month requiring the company to demonstrate it can pay its debts. “We are aware that the ITRCC and its lenders are in the process of finalizing negotiations for a debt settlement,” said McFarland in an email. “We have issued a letter reminding ITRCC of its financial-performance responsibilities, and to demonstrate within 90 days that they are meeting those obligations with their lenders.” Indiana Public Media

Opinion: Actually, public education is getting better, not worse. Few consistent tools are available to measure the quality of U.S. education over time; the best we have is probably the National Assessment of Educational Progress test, first administered in 1971. And believe it or not, NAEP scores have been steadily improving, with most national measures now at or around all-time highs. The biggest gains have generally gone to nonwhite students, helping narrow — though not eliminate — the achievement gap. Other metrics, too, suggest that schools are improving. Dropout rates are at record lows, and the share of high school students who take higher-level courses such as calculus has risen.. . . Diane Ravitch, a research professor of education at New York University, argues that the schools themselves are also being demonized, thanks to clear-eyed ideology rather than rose-colored nostalgia. “U.S. public education is the victim of a propaganda campaign to discredit it and promote privatization,” she says. She traces this back to the 1983 “A Nation at Risk” report from President Ronald Reagan’s education commission and argues that business leaders and politicians have increasingly used public schools since then as scapegoats for other societal ills. Washington Post

News

Panel urges transparency, caution for public-private partnerships
Public-private partnerships are neither a silver bullet nor a free lunch, a U.S. House panel has concluded in a final report to the Transportation and Infrastructure Committee. The House Panel on Public-Private Partnerships published its report on Wednesday, Sept. 17, urging transparency and accountability to the public whenever a PPP, also known as a P3, is being considered. . . .The House Transportation and Infrastructure Committee formed the PPP panel in January, asking for recommendations for balancing the need to generate more cash for infrastructure while protecting the public interest. Panelists, led by U.S. Rep. John J. Duncan, R-Tenn., said PPPs can provide needed funding but should be used with caution. . . . The report also acknowledges and celebrates a strong federal role in transportation infrastructure. Land Line Magazine

Are We Privatizing Public Universities?
“Public education is in crisis — and it has been for some time. The problem is, no one can agree on the problem, and when there is no agreement on the problem, developing solutions is nearly impossible.” Thus writes Matthew Lambert in his new book, Privatization and the Public Good: Public Universities in the Balance, an analysis of present-day public higher education, which is currently plagued by momentous challenges. HGSE News

MI: Judge pauses Detroit’s bankruptcy trial again
US. Bankruptcy Judge Steven Rhodes ordered a week-long break in Detroit’s bankruptcy trial on Wednesday, giving the last major objector to the city’s restructuring plan time to rework its case. The hearing will be adjourned from Friday and reconvene on Sept. 29. It was also placed on hiatus last week for three days while the city applied finishing touches to a settlement with another creditor. . . Also on Wednesday, Detroit Mayor Mike Duggan urged the city council to support a proposed Great Lakes Water Authority (GLWA)that would allow the city to maintain control of its water and sewer services, while gaining $50 million a year for 40 years from leasing the systems to the new regional authority. Detroit and at least one of three southeast Michigan counties served by the city’s water and sewerage department must approve the deal by Oct. 10. Without an affirmative vote on Friday, Duggan said Detroit Emergency Manager Kevyn Orr could opt to privatize the system. Council President Brenda Jones raised concerns that Detroit must put the authority before voters under the city charter. But Duggan said there was no time for a vote, while his legal staff said Michigan law suspended Detroit’s charter as long as Orr is emergency manager. Reuters

IN: State asks private Indiana Toll Road operator for proof it’s meeting its debt obligations
The state agency that oversees the Indiana Toll Road has given the highway’s debt-saddled private operator until late November to prove that it’s meeting its debt obligations amid reports that the company is considering filing for bankruptcy and selling off its multi-billion-dollar toll road lease. . . . The Wall Street Journal reported last week that Granger, Indiana-based ITR Concession was weighing a possible bankruptcy filing as company officials work to reduce their roughly $6 billion debt load through a debt restructuring that could set the stage for it to sell its toll-road lease. The newspaper also reported that ITR Concession’s missed June debt interest payment spurred it to push ahead with debt restructuring talks with hedge funds that bought its bank debt for the tollway lease. The Republic

NJ: Employees protest the privatization of state group homes
Members of the American Federation of State, County and Municipal Employees are hoping to raise awareness for what they say are the damaging affects of privatizing state group home.  “What would happen is they would be out of work, some of them would be able to draw employment or bump other employees that would put them out of work,” said AFSCME Local 2215 president, Mattie Harrell.  NBC40

News

IN: Indiana Toll Road failing despite 176 percent toll increase for trucks. Reports out of Indiana suggest that the foreign operators of the Indiana Toll Road will soon be filing for bankruptcy in an attempt to restructure more $6 billion in debt. The announcement comes just eight years into the Indiana Toll Road Concession Co.’s 75-year lease of the roadway and despite a 176 percent toll increase on five-axle trucks. . . . Prior to the lease, a five-axle truck paid $14 to cross the state. That same truck currently pays $38.70 regardless of whether the toll is paid in cash or through E-ZPass. The lease agreement also contained a “non-compete” clause that prohibits the state of Indiana from fixing up nearby toll-free roads that compete with the Indiana Toll Road for traffic. . . . The effects of the lease will continue to compound over time. According to lease language, the operator of the toll road is guaranteed a 3-percent toll increase per year through the year 2081. That means the current $38.70 toll paid by trucks will project out to more than $280 by the time the lease expires. Land Line Magazine

IL: Rahm to Aramark: Clean up the schools or clean out your desks. Responding to reports of filthy conditions inside Chicago Public Schools after privatizing janitorial management, Mayor Rahm Emanuel said Aramark could “clean out the schools or they can clean out their desks and get out.” . . . Emanuel said Board President David Vitale has been in contact with the private management firm. Vitale and other board members had voted earlier this year to give Aramark a $260 million contract to manage the district’s custodians and cleaning supplies. . . . Principals have complained in a survey conducted by AAPPLE, an activist arm of the Chicago Principals and Administrators Association, that since Aramark took over, schools have not been well cleaned, supplies are inadequate and that they and teachers spend more time than ever cleaning the schools. CPS, when presenting the Aramark proposal in February, said the district would save money, schools would be more thoroughly cleaned and principals would be freed from managing their janitors so they could focus on instruction. Chicago Sun-Times

CFPB Accuses Corinthian Colleges Of Cheating Students. For-profit education company Corinthian Colleges Inc. misled students into taking out unaffordable loans by falsely advertising job prospects, then used illegal debt collection tactics to force distressed students to pay up, according to a lawsuit filed Tuesday by the U.S. Consumer Financial Protection Bureau. Corinthian owns Everest Institute, Everest College, WyoTech and Heald colleges, which collectively have more than 70,000 students and annually receive $1.4 billion in federal financial aid. The company is winding down all its operations in an agreement with the U.S. Department of Education. Huffington Post

Likely bridges toll operator looking to grow in US. The company chosen Monday to operate the toll system for the Ohio River Bridges Project was formed nearly four years ago, when an Austrian firm bought a Canadian supplier of electronic toll equipment. . . . . Kapsch TrafficCom IVHS, whose parent company is headquartered in Austria, is known as an international toll road operator whose projects include European countries – such as the Czech Republic and Poland – and roads in Australia, Chile and India. One of its specialties is toll roads where tolls are assessed through license plates and transponders – the approach taken by Kentucky and Indiana. . . .[T]he company names North America as a region where it sees the “largest potential” in the tolling market, and where it has acquired several toll-related businesses since 2008. It also cites work with the E-ZPass system, which includes 24 agencies in 14 states and is planned for the Louisville bridges, and tolling software work on California’s Golden Gate Bridge. WDRB