Your weekly rundown of news and analysis about the privatization of education, water, and other public goods—and about the people fighting back. Not a subscriber? Sign up.
- Faced with a worker shortage at its Kansas facility, the candy maker Russell Stover has turned to prison labor.
- Progressives both in and out of Congress continue to reject key parts of Biden’s “bipartisan” infrastructure deal, such as its size, privatization components, and inadequacy on climate action.
- Wall Street is coming for your local power utility, and that’s bad for the fight against climate change.
1) National: 250 organizations and think tanks are urging Congress and the Biden administration to go big on the American Jobs Plan and American Families Plan. “The draft budget from Senate Budget Committee Chair Bernie Sanders represents the minimum scale necessary to tackle our nation’s most urgent challenges. This $6 trillion proposal should be the floor, not the ceiling, for the ultimate reconciliation bill. Over a ten-year period, it represents just over 1 percent of the U.S. GDP and less than half of Pentagon spending given current trends. The proposal is reported to improve on the Biden Administration’s proposals by allowing Congress to expand Medicare, a policy supported by Senate Majority Leader Chuck Schumer (D-NY). Senator Sanders also proposes increased funding to address climate change and provides a pathway to citizenship for millions of immigrants.”
Among the signatories are the Progressive Caucus Action Fund, Economic Policy Institute, Institute for Policy Studies, Poor People’s Campaign, AFGE Local 704, Americans for Tax Fairness, the American-Arab Anti-Discrimination Committee, Bend the Arc: Jewish Action, Campaign for America’s Future, Center for Popular Democracy, Demos, Florida Council of Churches, and the National Education Association.
2) National: Congressional Democrats are pushing back against efforts to fund the proposed bipartisan infrastructure plan by stripping Covid-19 aid from state and local governments and slashing unemployment benefits even as unemployment ticks up. “Leading the charge is Senate Finance Committee Chairman Ron Wyden (D-OR), who has been working on his own proposal to pay for a major infrastructure package and is now waiting for Senate Majority Leader Charles Schumer (D-NY) to signal when he can unveil the revenue-raising bill. The Oregon Democrat is focused on raising an estimated $1 trillion from corporations as well as more than $300 billion from taxing unrealized capital gains, according to a source familiar with internal Democratic discussions.”
3) National: James Grossman and Jeremy C. Young of the American Historical Association have weighed in to denounce bills being proposed and passed to curb teaching about race in America. “The law now pending in your state legislature was written inside the Beltway, copied word-for-word from a document so hastily written and published that it has the filename ‘Model-School-Board-Language-to-Ban-CRT-SD-HCS-edits-1.’ This lazy, sloppy operation is backed by serious political muscle. A Loudoun County rally that was televised was organized by Heritage Action, which is the advocacy arm of the Heritage Foundation. The American Legislative Exchange Council (ALEC), with long experience with state legislative templates, is involved.” They write, “don’t deprive students of the facts they need to learn, discuss, and draw upon our nation’s history. Helping them to do that is our job. Let us do our job.”
4) California: Hero firefighters are stepping up to meet the challenge of what may be one of the worst wildfire seasons in California history. “We think we know how hard they work. But I am sure that what we imagine, doesn’t even come close to reality,” a user identified as Renee wrote. “Much gratitude to our firefighters!”
5) California: The mayor of Sacramento has announced a plan “to legally obligate California’s capital city to house its growing homeless population, a policy shift that would open a new front in the state’s struggle to address what has become a signature California social ill. Californians ‘are becoming homeless faster than we can get people the help they need,’ said the mayor, Darrell Steinberg, as he proposed a municipal ‘right to housing’ and a parallel ‘obligation’ for homeless people to accept shelter when it is offered.”
6) California: Back in December, California Deputy Treasurer Tim Schaefer accepted the Bond Buyer’s Deal of the Year Award on behalf of the California Health Facilities Financing Authority, which was recognized for its $500 million issuance under the “No Place Like Home” program, which will build housing for the homeless.
7) National: Jennifer Berkshire, Co-author of A Wolf at the Schoolhouse Door, reports that “all of the same states that are privatizing public education and trying to keep schools from teaching about racism have also enacted restrictions on voting.”
8) California: The San Jose Unified School District has denied certification to two charter schools. “To receive the funding, a charter school needs to be in compliance with the terms of its charter agreement, not have any notices of violation and be certified in good standing with its school district. (…) But SJUSD spokesperson Jennifer Maddox said the district notified DCP in December 2019 that it needed the $50 million insurance policy, and that DCP didn’t get the policy until after the state denied its funds. Additionally, Maddox said Downtown College Prep wasn’t in compliance with its charter agreement, as the academic performance of its students was lacking in comparison with similar district high schools.”
9) Florida: The Hillsborough School Board is standing firm in their fight against Education Commissioner and charter school zealot Richard Corcoran. “The board responded by doubling down on their decision not to renew the contracts. ‘There’s no board action needed at this point,’ Porter said. ‘But we felt it was important for you all to understand that we are responding to the letter from the Commissioner of Education, and that we will be sending out the letters to the charters that (the board) chose not to renew.’”
10) Louisiana: An elementary school in New Orleans’ Central City neighborhood could lose its charter due to alleged mismanagement. “The school had an F letter grade from the state before the pandemic and was scheduled to undergo the district’s renewal process this coming school year. At Wednesday’s emergency board meeting, Thomas Lambert, the district’s chief portfolio officer, laid out the district’s rationale for closing Singleton and said the school faces allegations of both academic and financial mismanagement.”
11) Massachusetts: Staff and UAW 2322 representatives at Paulo Freire Social Justice Charter School in Chicopee held an informational picket recently “responding to the school’s choice not to renew the contracts of two-thirds of their unionized teaching staff at the end of the 2020-21 school year. (…) ‘Everything is really coming to a head,’ said [former teacher Zach Novak]. “This is kind of a systemic issue with charter schools in general—I think we’re the third in the country to successfully do even the initial organizing to certify a bargaining unit but before that there were gaps in our pay, there was no disciplinary procedure. One of the things you’ll hear from any teacher you talk to is that it’s all a cult of personality—if they like you, you’re good and if they don’t like you, you’re bad. It’s really uneven in terms of workplace fairness and basic dignity.’ Charter schools, it is worth noting, have long been a pet project of Conservatives to undermine teachers’ unions.”
12) North Carolina: The Senate budget is walking back on charter schools. “The Senate budget would eliminate the controversial innovative school district. Created in 2016, the district as originally planned, would have up to five schools in it by now. It has only one, Southside-Ashpole Elementary School in Robeson County. The idea was to take low-performing public schools and give them to outside organizations to run. A wealthy charter school backer from Oregon, John Bryan, bragged about his work getting the state to create the special district. Most local districts fought handing over their schools, and the innovative district never expanded.”
13) Texas: The Texas State Board of Education has blocked the development of four charter chains and given the green light to three others. “Alongside ongoing conversations about charter schools, arguments at the meeting eventually turned to another familiar source of tension in Texas politics: clashes between regional Democratic officials and statewide Republicans. [Ruben Cortez (D-District 2)] insinuated that Governor Greg Abbott and Texas Education Commissioner Mike Morath unduly swayed the board’s decisions. ‘Some of the votes in this body might change as a result of the governor’s office reaching out to members on this board. I don’t know why the governor is so interested in these charter businesses, but I am very disappointed,’ Cortez said.”
14) National: Prospects for passage of the bipartisan infrastructure deal and the reconciliation/Families Plan package remain uncertain as political jockeying continues. Bloomberg spells out a lengthy process that may or may not ever bear fruit. “It will take weeks to convert the bipartisan agreement into legislative language. Drawing up Sanders’s bill and getting it through procedural hurdles will take months. Democrats do not yet agree even on the price tag: He has floated $6 trillion, while Senator Joe Manchin has talked about $2 trillion. Even in today’s Washington, that’s a big difference. Most congressional Republicans are watching the Democratic infighting from the sidelines. They oppose both spending bills.”
While heartened by the inclusion of P3s, private activity bonds and “asset recycling” in the bipartisan deal’s cryptic term sheet, the privatization industry is also hedging its bets. “Yes, it is possible that ten Republican Senators stay onboard through that process. It is also possible that some of their ten bipartisan Democratic colleagues help, by committing to clear limits on any future reconciliation bill. (…) Or…there is still a high probability that the bipartisan deal falls apart, and we may never find out what they meant by ‘P3s, PABs, and asset recycling.’”
15) National: Meanwhile, even though President Biden has hit the trail to promote his infrastructure deal, progressives both in and out of Congress continue to reject key parts of the deal, such as its size, privatization components and inadequacy on climate action. Speaking on Democracy Now!, American Prospect editor David Dayen said the privatizatio n measures are “the substitution of public tax collection where we pay for these common assets that we all use and share to private tax collection where you sell the infrastructure assets to a private company, whether for toll roads or privatized water systems, privatized parking meters or what have you, and that private company gets to effectively tax the public. And inevitably that tax goes up because they have to build in their layer of profit.”
Critics are also wary of the revenue ideas in the White House announcement, such as that private financing could raise $100 billion. “Some experts are dubious of that assessment,” The Washington Post reports. “‘Public-private partnerships’ refer to a method of government procurement in which to finance construction, private companies mix private capital with public loans and bonds that receive tax benefits. It is unclear why the negotiators think this will lead to more tax revenue. ‘Private activity bonds’ give investors a tax break from investment income in infrastructure-related projects, which could lead to less federal revenue. ‘Asset recycling’—the practice of auctioning off government assets—could bring in some revenue but is far more likely to be done at the state and local level than by the federal government, and the new revenue created would probably be minimal, said Kevin DeGood, an infrastructure expert at the Center for American Progress, a center-left think tank. ‘It’s not clear why public-private partnerships, private activity bonds and asset recycling are being treated as a revenue source for the federal government,’ DeGood said.” [See DeGood’s “Building Infrastructure That Supports Opportunity, Equity, and Sustainability”]
“Privatization, especially asset recycling, isn’t true investment,” said Donald Cohen, the Executive Director of In the Public Interest. “Every public dollar that ends up in the pockets of water corporations and investors is one less dollar we can use to fix America’s crumbling water infrastructure.”
The Hill reports that “funding plans that have drawn skepticism from lawmakers in both parties include $100 billion that bipartisan negotiators say would be raised by creating direct-pay municipal bonds to attract more investment to private infrastructure, as well as $20 billion that would come from repurposing broadband funding allocated in previous legislation and $58 billion estimated from nontraditional ‘dynamic scoring.’” [Direct-pay municipal bonds are a subsidy on interest rates to make borrowing cheaper. They are bonds in which the U.S. Treasury Department pays state or local government issuers a payment equal to a percent of the coupon interest payments on such bonds (it was 35% on Build America Bonds)—ed.]
Mother Jones reporter Hannah Levintova says “last week, lawmakers proposed funding the $1.2 trillion bipartisan infrastructure deal with ‘asset-recycling.’ Plenty of cities and towns have tried this already to fund roads, water systems, and more. It has…not gone well.” Read the full article.
16) National: The pushback against the infrastructure privatization proposals caused Public Works Financing’s in-house ideologue Robert Poole to go ballistic and denounce both Dayen, who picked apart the bipartisan deal as “a stalking horse for privatization” (five years after In the Public Interest’s Donald Cohen described Trump’s infrastructure plan as “stealth privatization”), and Brian Highsmith, who in an op-ed in the New York Times called the deal’s user fees a form of regressive private taxation and for us to “opt instead for an inclusive public infrastructure that is available, and affordable, to everyone.” [Public Works Financing, June 2021; sub required].
17) National: In the Public Interest’s communications director, Jeremy Mohler, says Wall Street is coming for your local power utility, and that’s bad for the fight against climate change. “With a heat wave blanketing the American West—including record temperatures as far north as Washington State—climate change is dominating headlines again. Unfortunately, there’s a worrying trend in power utilities that could make it more difficult to do something about our warming climate. A few weeks back, we wrote about how a private equity firm is trying to take over a public water treatment system in New Jersey. (By the way, the Cumberland County Utilities Authority’s executive director just quit, citing “outside forces” meddling in the system’s finances.) Well, that same private equity firm—the Louisiana-based Bernhard Capital Partners—has also been trying to gobble up power utilities.”
18) Maryland: Kevin DeG ood of the Center for American Progress, in addition to battling the forces of darkness on privatized taxation at the national level, has also produced an excellent 14-Tweet thread that dissects both the poorly conceived and enormously expensive I-270/I-495 Transurban/Macquarie toll road project, and the Purple Line light rail P3 fiasco. The toll road P3 was recently cut down to the vanishing point by regional planning bodies in DC and Maryland, which led to another temper tantrum at Public Works Financing over how regional planning agencies were screwing up their whole business and need to be dealt with. [“OPINION: Maryland TPB Vote Highlights Need for Policy Reform,” Public Works Financing, June 2021; sub required].
19) National: House Democrats are saying the infrastructure bill must not be used to “throw more money at the Pentagon.” Spearheaded by Reps. Barbara Lee (D-CA), Cori Bush (D-MO), and Mark Pocan (D-WI), “the new letterstates that ‘it makes poor economic and security sense’ to use an infrastructure package ‘to funnel more money into the Pentagon, on top of the three quarters of a trillion dollars per year that it already receives.’”
20) National: The Democratic-controlled U.S. House of Representatives approved a $715 billion surface transportation and water infrastructure bill on Thursday “in what Democrats see as an early step toward sweeping infrastructure legislation that Congress hopes to complete in September,” Reuters reports. “The 221-201 vote sends the legislation to the Democratic-led Senate. The $715 billion ‘INVEST in America Act’ contains more than $44 billion added during the amendment process to make greater investments in infrastructure, including electric vehicle charging and passenger rail grant programs, according to aides to House Transportation and Infrastructure Committee Chairman Pete DeFazio.”
21) Alaska: Bloomberg reports that Alaska’s infrastructure is in terrible shape and needs immediate and long-term attention. “The upshot is that in Alaska and other areas of permafrost thaw, current models may “strongly underestimate the timing of future Arctic infrastructure failure,” the researchers wrote in a study recently published in The Cryosphere, a journal of the European Geosciences Union. That will likely lead to high replacement costs for infrastructure by the middle of the century, they wrote, adding that the timing of any structural failure and the “risk of disasters caused by damage to sensitive infrastructure” including pipelines and fuel storage remains to be studied.” Vladimir Romanovsky, a professor at the Geophysical Institute of the University of Alaska Fairbanks, says “by now, pretty much all engineers agree that they have to include climate change and related changes to permafrost in their calculations.”
22) North Carolina: On July 28 the board of the Wilmington Urban Area Metropolitan Planning Organization will discuss whether to use a tolled so-called public-private partnership model to replace the aging Cape Fear Memorial Bridge. “The proposal from the unnamed firm is just an idea at this point, Chad Kimes, NCDOT’s Division 3 engineer, said this week, adding that the public would have a chance to weigh in on the idea should the WMPO decide to explore this option further. Further details about the firm and the details of their unsolicited proposal are kept confidential due to state law on this form of private company project pitch, according to officials with NCDOT.”
21) Florida: Should a private entity be forced to compensate a public entity for the impact its projects have on the revenues and financing of ongoing public works? “FDOT has demanded a long list of terms for Brightline to fulfill. At the top of the list is the requirement that Brightline conduct a study to figure out how many cars will be taken off of Central Florida’s toll roads … and then punish the train for it.” At least one Florida Democrat says no, but the All Aboard Florida project has faced multiple legal challenges by local government entities. The project is owned by Miami-based Brightline Holdings, which has high speed rail projects in Florida and the West.
22) Pennsylvania: As the proposed bipartisan infrastructure plan envisages more fees, taxes and tolls to finance projects, a hint of what might lay in the future is being played out in Pennsylvania, where a political war has broken out between the state transportation agency and Republicans over tolls tied to a so-called public private partnership. And, irony of ironies, the usually pro-privatization Republicans are looking to public bonds (in this case Garvey Bonds) to avoid the tolls. “Among the options Mr. Langerholc is consideri ng is issuing Garvey Bonds, a special program that could generate $2 billion using part of the state’s federal transportation allocation to pay the debt on bonds issued for road and bridge work.”
23) Washington: Spokane Rising says “it is absolutely critical that PNW progressives and allies oppose the proposed privatization or @BonnevillePower which is included in the bipartisan ‘infrastructure’ package.”
24) International: Where does risk go on P3 infrastructure projects during pandemics, of which more are likely coming? “On May 17th, the Ontario Superior Court of Justice ruled that the concessionaire for the Eglinton Crosstown Light Rail Transit Project was entitled to emergency relief under the force majeure provisions of its concession agreement. The public sponsors for the project, Metrolinx and Infrastructure Ontario, appealed the decision on June 2nd. The decision, if upheld on appeal, could have implications across the Canadian P3 market as the pandemic and associated lockdowns increasingly lead to claims for relief and potential financial distress for projects.” [Public Works Financing, June 2021; sub required]
25) Think Tanks: For an interesting discussion of diversity and inclusion on the private side of municipal finance have a look at the Bond Buyer’s interview of three “rising stars” in the industry. [Video, about a half hour]. It would be useful to have a similar set of interviews with people on the public side.
Criminal Justice and Immigration
26) National: Law360 reports that the GEO Group “lost its attempt to bust an immigrant detainee class alleging it paid just $1 daily to have its detention facility cleaned, after a Washington federal judge found that the class’s sole representative can adequately represent its interests. U. S. District Judge Robert Bryan batted away GEO Group’s claims that Ugochukwu Goodluck Nwauzor’s experiences in the voluntary work program at the Northwest ICE Processing Center were too narrow to lead a 3-year-old class, saying Monday that Nwauzor had alleged the same wage injuries as thousands of other participants in the work program.”
27) Alabama: Chris Nelson of Montevallo has written an open letter to state representatives Greg Albritton and Russell Bedsole. “I’m writing to ask you to reconsider involvement with CoreCivic, in terms of any interest they may have in constructing or renovating any state correctional facilities. Through the failure of Governor Ivey and ADOC’s misguided and secretive plan to lease three mega-prisons, many ordinary Alabamians are now aware of the issues with private prisons, and they do not want to have their influence in our state. Nearly all of the folks that I have spoken to in Brierfield and Central Alabama are in favor of criminal justice reform, renovation of existing facilities, and a top-to-bottom review of ADOC; no one has considered privatization as a good solution. Those who are in favor of prison privatization only seem to be the ones that have potential to gain from it, either financially, or in terms of influence. If the State continues to pursue a relationship with private prison companies, I’m confident that any plans will be seen as an effort by the legislature to pawn off its long-ignored responsibility to the private sector, and will be resisted by your constituents.”
28) Arizona: The parents of a man killed in Peoria, Arizona, in 2019 have filed a complaint in Maricopa County Superior Court, alleging the correctional health care system is to blame for their son’s death. “Attorneys representing the parents of Elijah Al-Amin say an extensive review of the medical files of the man who allegedly killed him, Michael Adams, shows a years-long pattern of gross negligence by behavioral health care providers in the community, county jails and state prisons. (…) The complaint names numerous Arizona behavioral health entities that Adams was in contact with before the death of Al-Amin, including the current and former companies providing health care in state prisons — Centurion of Arizona and Corizon Health — as well as Mercy Care, Crisis Preparation and Recovery, Crisis Response Network and numerous unnamed employees.”
29) Kansas: Investigative journalist Eoin Higgins reports that faced with a worker shortage at its Kansas facility, the candy maker Russell Stover has turned to prison labor. “Brandilyn Parks, founder of the Kansas Coalition for Sentence and Prison Reform, say is exploitative. ‘Prison labor hurts both the community and the incarcerated by taking jobs from the community, setting the incarcerated up for failure because employers will not hire those with a felony,’ Parks said. ‘Prison labor only benefits the prisons, period.’” Kansas ACLU Legal Director Sharon Brett says “these programs can very quickly become exploitative. While work release programs in general are a good thing, the contours of the program—and how much money people get to take home at the end of the day—are certainly appropriate questions to be asked.”
30) National: Dave Lindorff looks at Medicare Advantage and the privatization of Medicare. “If Medicare Advantage plans were in truth better or better deals financially than traditional Medicare Parts A and B, plus Part D, the companies offering them wouldn’t be resorting to the aggressive and costly promotional campaigns they currently employ, with sales reps calling older people’s phones day and night endlessly and making major ad buys on TV networks and the internet. They wouldn’t be resorting to costly come-ons like offers of free gym memberships and usually crummy dental and drug insurance coverage either (which Congress in its “wisdom” bars government Medicare from doing in its traditional plans). The health care industry is the biggest advertiser on television and ads for Medicare Advantage are a big part of that spending, especially on networks whose viewership skews heavily toward older persons, like CBS. The main “advantage” Medicare Advantage plans offer, in fact, is not a benefit to subscribers, but rather to shareholders and corporate executives in the health insurance company C-s uites.”
31) Illinois: Ever see a municipal solid waste management plan? Winnebago and Boone Counties are partnering to update their plans, so stay tuned. As planning consultant, Region 1 Planning Council is working with these stakeholders to develop a Regional Solid Waste Management Plan that establishes a robust and sustainable waste management system. “‘Updating our solid waste management plan has been a long time in the making,” said Winnebago County Chairman Joe Chiarelli. ‘This plan update will help Winnebago County identify major risks and take action in reducing our waste and impact on the surrounding environment. With the help of the soon-to-be created Solid Waste Advisory Committee, our goal is to produce a plan that will spur both economic activity and innovative environmental solutions.’ Boone County Chairman Karl Johnson adds, ‘We are looking forward to partnering with Winnebago County to update and combine both of our solid waste management plans. Neither water nor air acknowledge county boundaries, so it’s crucial we work together to build a more resilient region.’”
32) New York: The New York Public Library is opening all of its branches this month. Services to be restored include:
- Allowing unlimited, untimed browsing
- Allowing general library use, including—for the first time since March of 2020—open, untimed seating
- Returning to pre-pandemic computer use, including laptop loan
- Reinstating or expanding bookmobile service
- Beginning to offer indoor public programs and classes, as feasible (it will likely take weeks or months to return programming to full capacity). Some locations are offering outdoor programs during the summer.
- Expanding public service hours, as feasible
33) National/Florida: With the condo insurance market in turmoil after the condo collapse in Surfside, who may have to step in to pick up the slack? You guessed it, the government provider. “There are only five admitted carriers currently writing insurance for condos in Florida so property and liability coverage for many buildings are covered by the unregulated surplus line carriers, he said. Guillama said many insurance carriers regulated by the state of Florida are increasingly avoiding writing policies in coastal areas because of the flooding associated with rising sea levels and ‘the high volume of water that is coming in that could affect the foundation of a building.’ If carriers drop condos, they could turn to Citizens Property Insurance, the state-run insurer of last resort. ‘Unfortunately, you’re probably talking three times the cost,’ Clarkson said.”
34) International/Think Tanks: With so much talk going on about the Australian origins of “asset recycling,” check out a current analysis of privatization in that country by one of the world’s leading experts, Dexter Whitfield, director of the European Services Strategy Unit. Last month Whitfield submitted Evidence to the Select Committee on the Privatisation of Public Services in South Australia on the Global, State and City Dimensions of Privatisation. His report“addresses the key issues determined by the Select Committee on the cost, quality, impact and the effect on income and wealth inequality, public participation, social cohesion and the role of government.” It frames the discussion in terms of public assets and “includes a brief political economy overview, a typology of privatisation, an alternative strategy and 23 recommendations for action by the South Australia legislature.”
Whitfield is also the author of Public Alternative to the Privatisation of Life: Strategies for Decommodification, Public Ownership & Provision, Democratic Control, Climate Action, Conserving Nature & Biodiversity and Radical Public Management.
Photo by m01229.