Your weekly rundown of news and analysis about the corporate takeover of education, water, and other public goods. Not a subscriber? Subscribe here for free.
- We are shocked! Shocked! Florida charter school owners hope to get into real estate biz.
- Water fight: battle for public control over water systems continues, this time in Pennsylvania.
- Huntsville, Texas library privatized following Pride display.
First, the Good News…
1) National: Looking ahead to 2023, In the Public Interest’s Executive Director, Donald Cohen, sets out new ideas and projects to lean into the pro-public part of our work.
“Here’s what we’re going to do:
- Expose how privatization weakens democracy and increases inequality.
- Make government work–for everyone. That means reforming public institutions and policies that fail to live up to public ideals and purpose. But it also means lifting up successes and progress of public things around us today.
- Take on ideas (such as the myth of the inherent superiority of the market) that undergird the ideological and political assault on the important role of public control over public goods and services .
- Support organizations, leaders and movements driving change.
We enter the new year with hope informed by experience–we know there are challenges ahead, but with the staff of ITPI and our many partners, we feel a renewed strength in addressing these challenges.”
2) National: It looks as if the long-running mythology that a deregulated air industry is best for consumers has reached the end of its runway. Southwest Airline’s meltdown during the holiday travel crunch could inspire re-regulation, Elizabeth Souder reports in Quartz. “Already the Biden administration is examining the matter and demanding that Southwest keep the commitments airlines made to customers over the summer for stronger customer service. Now, regulators, elected leaders, and regular flyers are demanding stiffer rules for airlines along with fresh investment in other types of travel, such as rail.”
Southwest used to be the poster child for airline deregulation, and was a leading player in efforts to privatize St. Louis Lambert International Airport, which citizen activists and elected officials defeated. As David Sirota has reported, the Biden administration had been warned long before the severe weather conditions that led to the national meltdown.
3) National: The Federal Trade Commission is moving toward banning noncompete clauses—which could put billions of dollars in workers’ pockets. “‘Research shows that employers’ use of noncompetes to restrict workers’ mobilitysignificantly suppresses workers’ wages—even for those not subject to noncompetes, or subject to noncompetes that are unenforceable under state law,’ said Elizabeth Wilkins, Director of the Office of Policy Planning. ‘The proposed rule would ensure that employers can’t exploit their outsized bargaining power to limit workers’ opportunities and stifle competition.’ The proposed rule was cheered by the liberal-leaning Economic Policy Institute.”
4) National: After years of pressure by environmental activists with the research backing of independent scientists, 3M announces it will end “forever chemicals” output at a cost of up to $2.3 billion. “3M and DuPont de Nemours Inc (DD.N)were among several companies sued by California’s attorney general to recover clean-up costs. Shareholders have also called for production of the chemicals to stop. Investors managing $8 trillion in assets earlier this year wrote to 54 companies urging them to phase out their use. ‘3M has been facing a raft of litigation that has prompted the move,’ Victoria Scholar, head of investment at Abrdn’s Interactive Investor, said of 3M’s deadline.” In August, “the Biden administration said it will propose designating certain forever chemicals as hazardous substances under the U.S. Superfund program.”
5) National: The predatory prison phone call industry is about to be fixed. “President Joe Biden on Thursday signed into law a bill aimed at easing the cost for prisoners to call family and friends. The legislation clarifies that the Federal Communications Commission, which regulates interstate and international communications through cable, radio, television, satellite and wire, can set limits for fees on audio and video calls inside corrections facilities.” Vanessa Chen, Special Assistant to the President for Criminal Justice and Guns Policy, said “meaningful communication and connection with loved ones helps promote rehabilitation, and it also reduces recidivism, which makes our communities safer.”
6) National: The EPA is helping school districts purchase clean-energy school buses, but some districts have been blocked from participating, Inside Climate News reports. “The EPA requires private contractors that get clean-energy buses through the program to serve the district listed on the application for the next five years. After that, if the district’s contract with the bus company were to end, the contractor would get to keep the clean-energy buses, Thomas said. This means the contractor would be the one to benefit from money that was supposed to help the district, he said. ‘We’re excited that there is a push to become greener, to improve air quality in our area,’ Thomas said. ‘Unfortunately, because we don’t own a school bus and would have to partner, it just wasn’t advantageous for us.’”
7) New York: Amazon has been forced to repay nearly $2.5 million in tax breaks because it failed to create the new jobs it promised when it got the public subsidy. “The entire package, including about $8 million in property-tax savings over 15 years, was forfeited when Amazon decided to close one of its two warehouses in Bethpage and transfer more than 500 jobs to Syosset and other facilities in the metropolitan area, as Newsday first reported in June.”
8) North Carolina: The state is expanding Medicaid. “Berger, a Republican, is president pro tempore of the North Carolina Senate, the most powerful position in the chamber, so his opposition virtually guaranteed that the legislature would not expand the joint federal/state program to include an additional 600,000 adults with low incomes. That’s why Berger’s recent conversion from opponent to proponent has shot North Carolina to the top of the list of the states that are most likely to break ranks with the other 10 that have refused to expand Medicaid.”
9) Ohio: Policy Matters Ohio has published new research on how the state can initiate a thriving, proactive tax agenda. “Ohioans—no matter where we live or what we look like—want to live in resilient and thriving communities. To build these communities we must pool our resources and embark on projects that ensure prosperity and well-being as widely as possible. Taxes are the tool to do exactly that. But over the past two decades many state politicians have colluded with corporate lobbyists to give tax breaks to the rich, to open loopholes for special interests, and to provide handouts for wealthy corporations. The result is an upside-down tax code. The Ohioans with the lowest incomes pay far more of their income in state and local taxes than the most affluent do and, as a result, the state cannot equitably meet Ohio’s basic needs, nor can it begin to lay the foundations for the types of communities we would all love to live in. This need not be so. We already have all the resources we need to build a more prosperous Ohio. Policymakers have the power to build a fair, proactive tax system that can be the basis for economic vitality and social prosperity.”
A useful lesson in how Democrats and Republicans can work in concert to block far right legislative action was provided by the Ohio House.
10) International: Trade Unions for Energy Democracy (TUED) reports on a major victory for public energy. “There has been a recent shift in policy and discourse around the energy transition in Australia. State governments in particular have started to acknowledge the failure of privatization, which occurred from the 1990s in many (but not all) Australian states. In a recent election in the state of Victoria, traditionally Australia’s industrial heartland, the Australian Labor Party government committed to significant new policies to begin the process of reinvigorating public ownership of electricity generation. It is widely acknowledged that these policies, and the government’s commitment to substantial emission reductions, renewable energy generation, and job creation were important to its landslide election victory.”
11) International: Britain’s conservative government is backing away from the privatization of Channel 4. “Writing to Rishi Sunak, the cabinet minister said there are ‘better ways to ensure C4’s sustainability’ than selling off the publicly-owned broadcaster. The apparent U-turn follows plans announced by Boris Johnson’s government last year to privatize the channel, sparking outrage from opposition parties, Tory MPs and top media figures. In a letter leaked to the News Agents podcast, Ms. Donelan wrote: ‘After reviewing the business case, I have concluded that pursuing a sale at this point is not the right decision.’” The anti-privatization group We Own It has been campaigning against the privatization for months.
12) National: The charter school industry is sounding the alarm about a recent federal court ruling that refuted its contention that public charter schools are non-state entities even though they receive public support. In a major ruling with national significance, the Federal Fourth Circuit Court of Appeals ruled in an equal protection gender discrimination case that the school, though not its private operating company, qualifies as a public entity in cases involving discrimination.
An op-ed in The Wall Street Journal voiced concerns about the implications of the ruling going forward, citing the arguments of religious conservative legal organizations. The two authors, a founder and “chairman” of the Charter Day School, make a nakedly religious pitch for the private character of charter schools, an argument that would have been laughed out of court under previous doctrine on the constitutional separation of church and state. “Far more is at stake than CDS’s school-uniform policy,” they say, “which was designed by parents of our students. The ruling comes at a time when the charter-school movement is growing. Oklahoma’s attorney general recently issued a legal opinion stating that religious organizations must be allowed to operate charter schools in the Sooner State. A key aspect of the opinion was a finding that charter schools are not state actors and, therefore, the Constitution’s Establishment Clause doesn’t prohibit the inculcation of religious values, as it does in government-run schools. In Carson v. Makin (2022), the U.S. Supreme Court held that a state voucher program couldn’t discriminate against religious schools.” [Sub required]
The appearance of this WSJ op-ed indicates that this case is not going to stop here but will likely end up in the “theocratic” Supreme Court. Read the appeals court’s ruling. Since public vs. private legal conflicts of this type affect every kind of privatization or P3, this case should be watched.
13) Florida: Who said the charter school industry is just a real estate play? “The owners of a charter school in the Princeton area of southern Miami-Dade County want to build apartments next to the educational facility. Country Palm Holdings LLC, co-owned by Ignacio Zulueta and Fernando Zulueta, who also owns Miami-based charter school operator Academica, filed a comprehensive development master plan (CDMP) amendment with county officials for the 26-acre site…”
The South Florida Business Journal reports that “with rents reaching record levels in Miami-Dade, developers are eager to move forward with new multifamily projects to capitalize on the hot market. Apartments in Princeton are generally less expensive than in the county’s urban core because of lower land values. Meanwhile, another division of Academica has a proposal for a mixed-use project in South Miami.” [Sub required]
14) Iowa: Larry Peterson of Denison says school voucher plans hurt rural people. “The governor’s school voucher plan does not benefit rural Iowa. It will transfer state tax dollars away from our local public schools to private school tuition. School vouchers are a product of the conservative school choice movement, a dream that would run schools like competitive businesses without public supervision. There are few private school choices nearby. Instead of attacking public schools, celebrate their historic contributions to American literacy and democracy. Fully funding Iowa’s public schools can keep rural communities vibrant.”
Lawmakers in the state legislature are planning to fight attacks on public education, including an expanded voucher plan. ‘Wahls decried the renewed push from Republican leaders for a law that would give some parents the option to use a portion of their student’s per-pupil state education funding to subsidize a private school education—in the form of scholarships commonly called vouchers. He said the plan would ‘defund our public schools and send public money to unaccountable private institutions.’ Last year’s proposal made 10,000 taxpayer-funded scholarships available to families making up to 400% of the federal poverty line or children on an Individualized Education Program. This year, Konfrst said Reynolds may propose a plan without an income cap.”
In an op-ed in the Des Moines Register, State Senator Claire Celsi says, “Get ready to fight for our public schools.”
15) Mississippi: Over half of Jackson’s public schools lack water, so the whole 20,000 student school district has to go virtual. State officials, who have been dragging their feet on their responsibility for dealing with Jackson’s water problems, are using the fact that neither the federal administrator or Jackson officials know where all the pipes and valves are to hold up funding water infrastructure. “It’s obvious to me that we have some preliminary work in Jackson—it has to be done before we can even allocate any more money.”
16) New York: New York City “may have to close an almost $4 billion deficit because it chronically under-budgets for overtime and schools and doesn’t include potential spending on asylum seekers, according to Comptroller Brad Lander,” Bloomberg reports. “Lander estimated that the city will spend $250 million more for overtime next year than projected and could face $278 million in additional charter school costs unless the state provides funding for tuition rate increases.” [Sub required]
17) Tennessee: The Tennessee Education Report informs us that the “Pro-charter propaganda machine Tennessee Fireflyis out with the story of a bevy of new charter school applications across the state. The story that’s gotten the purveyors of privatization so excited is that as of now, there are 23 ‘letters of intent’ from charter operators planning to open schools in districts across Tennessee.”
18) Wisconsin: In a letter to the editor of the Madison Cap Times, Michael Walsh lays it on the line about the attack on public education. “I noticed in my property tax bill letter that $9.2 million was diverted from the Madison Metropolitan School District to pay for unaccountable private voucher schools and independent charter schools. Just five years ago the loss to the district was $2.6 million. That cost will continue to increase dramatically next year and each year thereafter. While gerrymandered Republican legislators woefully underfund our local public schools year after year, they have created privatization schemes in state budgets that divert public money from our schools and raise local property taxes. These private voucher schools are taking public money and yet are not held to any financial or educational accountability standards, nor are they accountable to voters or taxpayers. Meanwhile local school districts like MMSD are constantly forced to go to referendum to keep local public schools running smoothly while the state sits on a $6 billion surplus. Taxpayers and voters in Wisconsin have never been allowed a vote to approve or block this privatization of schools.”
19) National/Pennsylvania: The biggest privatization stories on the scene right now are the efforts to sell off the water systems of two Pennsylvania towns, Chester and Towamencin, to private companies, supposedly to defray fiscal crises. The story has all the major elements of the privatization wars in the U.S. and elsewhere over the past few decades, including a municipal fiscal crisis (Chester is in bankruptcy, and “desperate government is our best customer”), political division (the Chester City Council wants to sell the facility, many citizens are adamantly opposed to it), and continuing intensive litigation over who actually owns the assets. These battles are laboratories of how to fight against privatization against heavy odds.
There are three important in-depth articles, and two websites produced by opponents of privatization, that provide essential information and analysis. Unfortunately, much of the information is behind paywalls, but here are some links. The three main overview articles are in:
Bloomberg Law: “Another downside to a sale is the risk that residents will face price increases similar to other towns that have privatized, though CEO Franklin said that Aqua plans to subsidize rates, employ local residents, and ensure no layoffs occur. ”
Public Works Financing (December 2022; sub required): “Chester’s saga with the CWA is also a good reminder of just how easy it is for stakeholders to undermine and delay initiatives like the one the Chester city council is attempting. They can be rendered moot by a state or federal bailout, undermined in the court of public opinion, and delayed or made uncertain via litigation.”
The Philadelphia Inquirer: “Big water companies are gobbling up public water systems,” and “Rebellious suburban Philly residents take a novel legal approach to thwart a sewer system sale.”
And from opponents of privatization: In Chester, the website of Chester Water Facts, including “Despite budget deficits and bankruptcy, Chester should not sell off its water system.” And in Towamencin, Neighbors Opposing Privatization Efforts (NOPE). “On November 8, 2022, Towamencin voters approved the formation of a Government Study Commission and elected NOPE’s 7 candidates to lead the Commission. The Commission was sworn-in on December 6, 2022. Towamencin NOPE encourages participation in the process by all residents of our township. Please follow the commission on their Facebook group and website (coming soon). NOPE will continue its fight to stop the sewer sale by supporting the commission’s efforts and pursuing additional methods of stopping the sewer sale, such as encouraging state legislators to reform privatization laws and participating in the PUC process that would approve the sale of the system.” See the candidates page.
20) National: A ‘silver tsunami’ is expected to hit the infrastructure sector, Route Fifty reports. “Roughly 17 million infrastructure workers will retire in the next 10 years, raising worries about who will erect and maintain America’s roadways and buildings.”
21) National: How is the sausage made in infrastructure planning? The New York Times has an in-depth piece on widening highways vs. alternatives to highways such as public transit. The question of public participation in and control of planning is almost entirely absent from the article.
22) New York: As Poughkeepsie municipal authorities negotiate with a redeveloper on a public housing project, residents feel left out. “‘If you don’t have any input from residents, how can you honestly say they were a part of it?’ said Johnson, who has been living at the Smith Street apartments with his family for about two decades. He noted that the U.S. Department of Housing and Urban Development, which oversees the Rental Assistance Demonstration, or RAD, program, encourages tenant participation and feedback and had been trying to organize tenants to help keep them informed and engaged. (…) The housing authority sent out a request for qualifications earlier in the year seeking developers to partner with the housing authority through the RAD. The program could lead to the privatization of the public housing by turning it into a project-based Section 8, opening the door for private investment.”
23) Ohio/Kentucky: The Brent Spence bridge project, focus of a drawn out battle over whether the project should be a ‘public-private partnership’ and how it would be funded, will now proceed as a design-build project using federal infrastructure funds. “Sen. Mitch McConnell, R-Kentucky, helped secure the funding for the project by shepherding IIJA through the Senate in November 2021. McConnell contacted U.S. Secretary of Transportation Pete Buttigieg to advocate funding for the project.” [Sub required]. President Biden and Senate Minority Leader Mitch McConnell conducted the opening celebration as the dysfunctional opening of the Republican-controlled House played across TV screens.
24) U.S. Virgin Islands: The U.S. Virgin Islands is looking to privatize its two airports without legislative approval and on an accelerated schedule. “The lease would be structured as a design-build-finance-operate-maintain concession for the Rohlsen Airport on St. Croix and the King Airport on St. Thomas.” Frasca & Associates, LLC is acting as [the Virgin Islands Port Authority’s] P3 and financial/municipal advisor. Mayer Brown LLP is the transaction’s legal advisor. [Sub required]
25) Virginia/National: The Transurban octopus holding Greater Washington’s roads in its grip looks about to get bigger. “The Youngkin administration and the expressway operator, Transurban, have been considering the conversion of the three-lane 31-mile corridor for the past two months, according to Secretary of Transportation W. Sheppard Miller III. ‘This is about doing what’s right for the region, and completing a network of express lanes that make sense, that is reliable and predictable,’ said McKay. Northern Virginia officials have struggled for years to find a solution to address the growing congestion on I–95.”
26) Think Tanks: There was a wonkish but good article in the Financial Times on the risks that public pension plan managers run by investing in illiquid assets such as public and public-private infrastructure debt. “In the recent era of low interest rates, pension funds poured money into alternative investments, such as infrastructure projects and private equity, in an effort to escape the low yields available on government bonds. But such investments are typically illiquid, meaning the funds cannot quickly convert them into cash if needed. While there has been little need for funds to do that over the past decade, the UK pension crisis in October exposed how a sharp rise in interest rates can change that.” For more in-depth discussion, see here. [Sub required]
27) National: As part of Rep. Kevin McCarthy’s capitulation to far right Republican obstructionists to gain the Speaker’s gavel, he’s allowed them to restore “a rule that allows the House to vote to fire specific federal government employees.” This would never pass the Senate, but the game of legislative hostage-taking is still ahead of us.
28) National/Think Tanks: The Heritage Foundation, a right wing mega-think tank, is under scrutiny for monitoring immigrant detainees at migrant aid shelters and Customs and Border Protection (CBP) facilities through their cellphones. “At EFF, Lipton said she is specifically concerned about how Heritage obtained the data because SMARTLink devices are owned by GEO Group, the same company that generates profits from migrant incarceration. ‘GEO Group is a private prison corporation that has a lot of interest in ICE detention centers being full,’ Lipton said. ‘So if they were at all involved in the way that the Heritage Foundation obtained this information, then that’s particularly disgusting because the entire report very clearly has an agenda.’”
29) National: Voters overwhelmingly oppose Republican efforts to privatize Social Security, Data for Progress reports. “In a new survey conducted from December 16-19, we find that voters across party lines overwhelmingly oppose Republican efforts to privatize Social Security. Seventy-seven percent of voters—including 79 percent of Democrats, 74 percent of Independents, and 76 percent of Republicans—think we should leave Social Security as is. Only 15 percent of voters think we should privatize Social Security.” Read the full survey.
30) National/International: Physicians Weekly reports that Centene, Under Siege in America, Moved Into Britain’s National Health Service. “Within weeks, the acquisition set off alarms for Louise Irvine, an NHS doctor, who called it “privatization of the NHS by stealth.” Irvine, other practitioners, and residents supported a crowdfunded legal challenge to the takeover of AT Medics Holdings, the U.K. primary care company under contract to the NHS.”
Some background on the “siege” in the U.S., from the November 7, 2022 Privatization Report: Centene, the “managed care” octopus with over $100 billion in revenue, “showers politicians with millions as it courts contracts and settles overbilling allegations,” Kaiser Health Network reports in an extensive, must-read research note. Just a sample: “Centene had already sealed Medicaid deals in Nevada through its SilverSummit subsidiary—yet a potential new line of business was on the horizon. Sisolak, who is up for reelection Nov. 8, had just approved a new public health plan option that would later open up to bidding from contractors such as SilverSummit. And then, less than two months after Centene’s subsidiary contributions were made, Nevada settled with the company over allegations the insurer overbilled the state’s Medicaid pharmacy program. The state attorney general’s office did not publicly announce the $11.3 million settlement but disclosed it in response to a public records request from KHN.” One more thing: “The contract went before the Nevada Board of Examiners for final approval. Sisolak is one of three voting members.”
And it’s not just the Democrats. The governor of Mississippi, Tate Reeves (who wants to privatize Jackson’s water works), has also benefitted from its largess. “Some politicians are tired of that playbook. In Mississippi, the state House of Representatives voted in February to prohibit Republican Gov. Tate Reeves’ administration from awarding a contract to any company that the state had settled with for more than $50 million. Centene paid Mississippi $55.5 million the year before.”
31) National: Sandra M. Fox, writing in Counterpunch, says that while we should keep a spotlight on private health insurance companies’ efforts to privatize Medicare through things like Medicare Advantage, “it is essential that we remember that it has been the U.S. Congress and the Executive Office that promoted the privatization of Medicare, to varying degrees, since it was first signed into law by President Johnson in 1965 and enacted the following year.”
32) National: People with mental health conditions—including bipolar disorder, schizophrenia, and severe depression—are jailed more than 2 million times each year, often for misdemeanor crimes, Pew reports. “Three-quarters of these individuals have co-occurring substance use disorders. The Washington Post noted in 2018 that 1 in 4 people shot by police the prior year suffered from mental distress, according to a report by the Treatment Advocacy Center.” The Pew Charitable Trusts, “in partnership with philanthropic and nonprofit organizations from the health and justice sectors, has launched a national effort to encourage communities to offer a continuum of appropriate services and not just decrease the number of people in jails with a mental health concern. Our shared goal is to ensure that police, jails, and emergency rooms are not the default response to people with mental health needs.”
33) California/National: California’s workplace health and safety regulators have cited the GEO Group, a private, for-profit prison corporation, for violations affecting detained workers locked up at an immigration facility near Bakersfield. “It’s likely a first.” KQED’s Farida Jhabvala Romero reports.
34) California: A one day strike by Teamsters Local 350 against California Waste Solutions ends in victory. “‘The reason for the strike was that the company was trying to remove a side clause from the contract that protected the work of the office unit in order to keep it in the bargaining unit. In addition, the third letter also protected membership from unfair dismissals,’ Sandoval said. ‘We were able to put enough pressure on California Waste Solutions to cave in and get our members to keep this worker protection that they already had,’ Sandoval said. ‘This is not a new provision in the treaty. That was something they had in the existing contract, they wanted to keep it, and that was something the employer wanted to remove. However, we were able to change it to allay and satisfy some of the employer’s concerns. That is why we no longer have a strike line and there is no more strike.’”
35) New Hampshire/Vermont: The Caledonian Record warns that homeowners associations have muscled into the market for new homes. “Nearly 4 in 5 single-family homes built in 2021 in the U.S. were part of HOAs. New housing construction has grown across the board since 2009, but new housing that’s incorporated in HOAs has grown about four times faster than housing that’s not.” This is rooted in history. “The general structures of these associations have barely strayed since their popularization via a 1985 law passed in California. The historic roots of HOAs grew from the privatization of shared amenities in the wake of non-white integration into previously white-dominated spaces across the country.”
36) Texas: The Huntsville Public Library has been privatized to Library Systems & Services, a private, for-profit company, after it came under attack for hosting a pride event. “In October, a library user identified additional suspicious behavior. A city police officer was behind the circulation desk reviewing books, reportedly taking one with him and approving the rest of the titles as ones that were okay to return to the collection. The library board has had no say in any of these decisions.” The contract is for 10 years.
37) National: Fox23 News in Tulsa reports that a group of U.S. Senators is calling for an end to the use of non-disclosure agreements (NDAs) by private housing companies that operate homes on military bases. “The use of NDAs leaves tenants who were provided with unsafe or unhealthy housing conditions forced to choose between receiving compensation for those atrocious conditions and forever remaining silent about their experiences or telling their story and having to pay out of their own pockets for safe housing conditions,” the Senators’ letter said.
38) Maine: A weak public health infrastructure is leading to major recidivism problems in Maine’s jails. “Cumberland County Sheriff Kevin Joyce said he sees many of the same people in and out of his jail. He added that he once saw the same person 51 times in one year. (…) ‘We gotta work on mental illness, they’re making efforts but they’re not huge efforts,’ Joyce said.”
39) International: Lula picks a privatizer to lead his Treasury Department. “In a press conference, Haddad said Rogerio Ceron, his finance secretary when he himself served as Sao Paulo’s mayor, would lead Brazil’s Treasury. Ceron recently headed Sao Paulo Parcerias, a city government-linked agency involved in projects related to concessions, privatization, and public-private partnerships.”
Photo by Michael Lehet