Here’s In the Public Interest’s weekly analysis of privatization in the news and in communities nationwide.
This week’s highlights
Some of the data in a recent report by the Network For Public Education (NPE) on federal dollars being wasted on charter schools came from billionaire Education Secretary Betsy DeVos herself.
Transportation Secretary Elaine Chao has delivered a major federal contract to Kentucky, the home state of her husband, Senate Majority Leader Mitch McConnell.
A new report spells out how county jails extract wealth from New York communities.
1) National: The Washington Post’s Valerie Strauss says charter school supporters may be surprised by the source of some of the data in a new report by the Network For Public Education (NPE) on federal taxpayer dollars being wasted on charter schools. “Ever since the second report was published, critics have been attacking it, saying that it was exaggerated and even that the authors were basing their claims on data they obtained from teachers’ unions. The lead author of the report, Carol Burris, said the critics have it wrong, and in the following post, she explains where the information came from and how the results were reached. Critics may be surprised to learn that some of the key data came from none other than DeVos herself (although not intentionally). DeVos has often said she is no fan of federally funded education programs, though she still defended the CSP in a letter to a U.S. legislator cited below.”
2) National/Arizona: In addition to recommending the new NPE report on misspent federal money on charter schools, David Safier of the Tucson Weekly also praises “a series of articles by the Arizona Republic reporter Craig Harris, who visited seven states to put together a big picture look at the charter school scene. Harris is probably the most even-handed reporter I’ve read on the subject. Most writers, including me, come at charter schools with some set agenda, which means the analyses are shaped by the writers’ educational preconceptions. That’s what makes Harris’ reporting so refreshing. He detests charter waste and fraud and has gone after financial corruption in Arizona’s charter sector with a passion. But when he looks at schools themselves, he tries to evaluate them on their merits. He finds things to like and dislike.”
Safier says, “One thing that jumps out from both Harris’ articles and the NPE report: Charter schools spend a lot of money. Not all of them, but enough to say that charters, especially those with a record of success, spend more money than comes in from state funding. In fact, charters that get a lot of press for their student achievement tend to outspend the district schools in their areas by a considerable margin.”
3) California: New figures show that charter schools in San Diego County are performing worse than traditional public schools. “Charter school students in the county overall had a worse graduation rate than school districts: only 62 percent of charter school students graduated in four years, compared to 87 percent for school district students.”
4) Indiana: Two more school districts are suing the state over its $1 charter school law. “According to this week’s court documents filed in Lake County, School City of Hammond has closed three elementary schools in the past year and plans to close two more schools at the end of the 2020-21 school year. Lake Ridge recently closed an elementary, too. According to court documents, the districts have an interest in selling or exchanging the properties. In December, 1,040 taxpayers in West Lafayette Community School Corp. signed a petition to join the district’s challenge of the $1 charter school law. West Lafayette’s case is scheduled for its next hearing Feb. 3 in Tippecanoe Circuit Court.”
5) Maine: Staff at one of Maine’s two virtual charter schools voted to join a teachers’ union last year, but that election result is in limbo after a challenge to four of the 16 ballots cast, reports Bangor Daily News. The National Labor Relations Board will determine later this month which ballots are valid and if the result will stand. “Union President Grace Leavitt on Friday called the election ‘fair and valid.’ ‘To have to bring this issue to court is proof of why these educators need to have a union,’ she said. ‘The Maine Education Association is always working to ensure educator voices are heard, no matter where they work. These teachers deserve to have their voices heard, and MEA is working to make sure that happens.’ The Maine Connections Academy contracts with Pearson, an international education company based in the United Kingdom, for many services such as human resources, according to the MEA.”
6) North Carolina: Portions of a new state report that questioned how much North Carolina’s charter schools may be contributing to racial segregation have been edited out. “Some of the most extensive changes involved the section showing how the majority of charter schools don’t mirror the percentage of white and black students in the school districts they’re located in,” the Asheboro Courier-Tribune reports. “This year’s changes show that the advisory board is more concerned about supporting charter schools than about ensuring the success of students, said Kris Nordstrom, education finance and policy consultant for the N.C. Justice Center’s Education and Law Project. ‘It’s disappointing that they are ignoring empirical evidence,’ Nordstrom said in an interview Friday. ‘The questions they’re debating are mostly questions of math. Are charter schools contributing to segregation? That’s a math question. The answer is yes.’”
7) North Carolina: A Charlotte private school has abruptly closed, leaving families and students in the lurch. Students were due back tomorrow. “‘Yes, 100% caught off-guard,’ said Jackie Davis, whose son attends Legacy Prep. On Friday, she and other parents whose children were enjoying holiday break, received an email from Stacey Rose, the school’s principal, that told them the school would not re-open on January 7th due to funding issues. (…) ‘It’s a burden,’ Davis said. ‘I’m thinking I’m in a nightmare, in a dream, and I haven’t woke up from it.’ She now has just days to go through the headache of finding her son a new school to attend so he can stay on track. ‘It’s a shock,’ she said. ‘First thing that crossed my mind was what about I going to do with my son.’”
8) Ohio: A loophole could result in F-rated charter schools receiving millions of dollars of funding intended to benefit better schools. “The fast-growing for-profit Accel charter school chain, which runs all of these schools, has applied for more than $15 million in cash from a new $30 million fund that Gov. Mike DeWine and the state legislature created this summer as a boost for Ohio’s best charter schools. The 33 Accel schools seeking the money failed to earn the good grades that would qualify them for the bonus. Instead, the chain is applying under language in the state budget bill that declares schools as ‘quality’ if their operator meets a few criteria with schools it runs in other states. Under a provision in the bill, these F-rated Accel schools may qualify for the bonus because a Colorado Springs charter school run by Accel won a federal grant a few years ago.”
9) Oklahoma: A backlash has built up against charter school advertising, leading to proposed legislation to rein it in. “New proposed legislation would ban Oklahoma schools from using tax dollars on advertising. It’s an issue one state senator is saying needs to be addressed, after learning Epic Charter Schools spends nearly $2.5 million on ads. ‘One commercial after another was on, in August particularly, saying come to this virtual charter school,’ said State Sen. Ron Sharp (R). Sharp said he’s heard from constituents alarmed by the advertisements. ‘They’re saying, “Where is this coming from?” Is this our tax dollars paying for this? And when you say yes, then they say, well do something,’ Sharp said. According to Tulsa World, Epic Charter Schools spent $2.4 million on ads, most of it on television commercials. In a state where recruiting students is becoming increasingly competitive, it’s something former school teacher Sharp takes issue with.”
10) Upcoming event: Public education supporter and anti-privatization advocate Diane Ravitch will be at Politics & Prose bookstore in DC on January 29 talking about her new book, Slaying Goliath: The Passionate Resistance to Privatization and the Fight to Save America’s Public Schools.
11) National: A GAO warning about ethical issues was apparently ignored as Transportation Secretary Elaine Chao delivers a major federal contract to Kentucky, the home state of her husband, Senate Majority Leader Mitch McConnell. Politico reports “the $67.4 million grant application for Boone County—a rapidly growing suburban district of political importance to Senate Majority Leader Mitch McConnell, the husband of Transportation Secretary Elaine Chao—was initially flagged by professional staff as incomplete. But after giving the state and local officials behind the application an extra opportunity to submit missing information, Chao chose it as one of 26 grant winners out of an initial pool of 258 applicants. The Government Accountability Office faulted the department for failing to document why the Boone County project and 41 other applicants received this extra chance to fill in holes in their submissions while 55 other incomplete applications fell out of the running. Moreover, emails obtained by POLITICO show that Boone County officials were in contact with Chao’s aide Todd Inman, a former McConnell campaign staffer known to offer extra guidance to Kentuckians with business before the secretary.”
12) National: Public interest advocates are warning that public utilities that try to force electricity distributors to sign long-term contracts with them are hampering the ability of southern cities to start exploring ways to expand renewable energy. “‘It’s not an accident that most of the distributors that haven’t signed up for this are the larger municipal utilities and co-ops,’ said Amanda Garcia, a Nashville based attorney with the Southern Environmental Law Center, which sees the 20-year commitments as an impediment to renewable energy development within the TVA system.”
13) National: Bloomberg reports that under proposed rule changes by the Trump administration banks may be able to score tax breaks by calling financing of stadium upgrades aid for the poor. “That scenario might seem oddly specific, but it’s what two regulators appointed by President Donald Trump said last week they may allow as they undertake the most significant rewrite of the Community Reinvestment Act in a quarter-century. The agencies drafted a long list of hypothetical ways banks could seek to meet their obligations, including this sentence on page 100 of their proposal: ‘Investment in a qualified opportunity fund, established to finance improvements to an athletic stadium in an opportunity zone that is also an LMI census tract.” (LMI refers to low- or moderate-income.)’ In November, Senator Ron Wyden introduced legislation “that would give the public more information on what projects claim opportunity zone tax breaks and prevent stadiums and luxury apartments from receiving them. “There are no safeguards to ensure taxpayers are not simply subsidizing handouts for billionaires with no benefit to the low-income communities this program was supposed to help,” the Oregon Democrat said in a statement at the time.”
14) National: Midwest Laborers say “modernizing and upgrading America’s electric transmission system alone could create an additional 150,000 to 200,000 jobs every year over the next two decades and make energy delivery more efficient and reliable.”
15) Florida: In a major victory for the public, Jacksonville Mayor Lenny Curry has pulled the plug on the privatization of the city’s main electrical utility, JEA. The Bond Buyer reports that heads have rolled as a result of the cancellation of privatization. “The chief financial officer at JEA has been terminated since its board abruptly canceled a controversial process to find companies interested in buying Jacksonville, Florida’s city-owned utility after spending at least $10 million. Melissa Dykes, who was named interim chief executive officer and managing director in December, gave no reason why she fired Ryan Wannemacher via email on Dec. 27.”
There is also a whiff of possibly sleazy incentives in the air, to be discussed tomorrow. “JEA has called a special meeting for Jan. 7 to discuss negotiations on an exit package with Aaron Zahn, the managing director who was fired by the board on Dec. 17 due to issues that developed with the recapitalization strategy, as well as a proposed controversial incentive pay plan some people compared to stock purchase options. If JEA had been sold, the pay plan could have cost the utility up to $600 million.” [Sub required]. At a December 17 meeting, JEA Board Chair April Green “made a motion to fire him with cause—but that motion failed for want of a second. Her causes for firing include Zahn’s failure to disclose the land partnership he had with a JEA lobbyist and his misleading of the board in regards to the pilloried long term performance unit plan known as PUP that would have enriched executives if the utility was sold.”
16) Maryland: Gov. Larry Hogan (R) and State Comptroller Peter Franchot (D) have come to an agreement to move forward with a plan to expand portions of the Capital Beltway and I-270. The deal will be put to a Board of Public Works vote on Wednesday. “The agreement with counties also outlines parameters for toll lanes: only new highway lanes will have tolls; existing lanes will not. And buses will be allowed to use the new toll lanes. The revised agreement also says that 10% of the toll revenues will go toward transit improvement in the state before the total cost of the project is paid off.”
Transit advocates and environmentalists are not happy. “‘The only thing this project will do is put money in the hands of foreign investors,’ said Ben Ross, chair of the Maryland Transit Opportunities Coalition. ‘Traffic will back up even more than it does now at the worst chokepoints—the I-270-Beltway merge at the Wisconsin Avenue exit and the northbound lane merges on I-270.’ The coalition and 11 other community advocacy organizations in Montgomery County wrote a letter to County Executive Marc Elrich and Council President Sidney Katz asking to see traffic models and data sources so that the public can ‘evaluate their consistency and credibility.’ ‘Then citizens must have a chance to digest the findings and express their views,’ the organizations wrote. ‘Only after that should consideration of alternative highway plans begin.’ Environmentalists like Josh Tulkin, director of Maryland’s Sierra Club chapter, said in a statement that while he’s pleased with the improvements Franchot secured, ‘this compromise will allow this flawed plan to advance, setting us further down the wrong paved path.’”
17) Missouri: In a major victory brought about by determined grassroots, media, public interest research, and political coalition efforts, the controversial scheme by billionaire Rex Sinquefield and his political allies to private St. Louis Lambert International Airport has been defeated. But the business sector was also opposed to the privatization deal, and discussions among and between area CEOs and Southwest Airlines contributed to the decision to pull the plug on the plan, The St. Louis Business Journal has reported. “A spokesman for [Mayor Lyda] Krewson emphasized that the decision to end the privatization process was hers alone, and that local executives are free to communicate with Lambert’s airlines and other stakeholders. She also previously cited a lack of buy-in from the business community and city residents, and some continued skepticism of privatization from Lambert’s airlines, as reasons for ending the privatization effort.”
It seems some alternative plans might be in the works, one involving a “public-private partnership” along the lines of a terminal improvement project at New York’s LaGuardia Airport, and another involving a possible buyout of the airport by surrounding counties and municipalities. In the latter case, “talks among regional leaders over a new way to govern the airport and compensate the city continue. [Bridgeton Mayor Terry] Briggs and others, including [St. Charles County Executive Steve] Ehlmann, have pointed out that Lambert is funded by user fees and most of the users come from beyond the boundaries of a city with just 12% or so of the regional population. ‘It blends right into the whole thing about regionalism,’ Briggs said. ‘This is an asset we all enjoy using and maybe it’s time all of us had some say-so in how it’s run and operated.’” [Subs required]
18) Ohio: As St. Clairsville Mayor-elect Kathryn Thalman takes office this week, the issue of water and sewer system privatization will be front and center. The Nov. 5 municipal election reflected strong voter opposition to privatization, but the composition of the city council remains the same, and no decision has yet been made on whether to privatize to Aqua Ohio or not. Whatever decision is made, public or private, ratepayers will be on the hook. The question is how a plan to come into compliance with state environmental regulations can be developed consistent with the public interest, with strong public involvement, and on what terms. Stay tuned.
Criminal Justice and Immigration
19) National/California: The Dignity not Detention Coalition has denounced a lawsuit filed by the GEO Group asking the federal courts to overturn a California state law banning state contracts with private, for profit prison and immigration detention companies. “In court, GEO and its shocking track record of abuse and in-custody deaths will be exposed to the light of public scrutiny,” the coalition said. “This unscrupulous corporation will face the legal prowess of California’s Attorney General and the full weight of the Constitution and federal law. It is fully within California’s power and responsibility to protect all residents from abuse.” In November, Senator Kamala D. Harris (D-CA), Representative Zoe Lofgren (D-CA), and Representative Jerrold Nadler (D-NY) also led a letter “questioning whether ICE has complied with federal procurement rules to award contracts for new detention facilities in California”
Jurist.com reports that “GEO Group alleged in their complaint that AB 32’s total prohibition on private detention facilities violates the supremacy clause of the US Constitution by barring the federal government from contracting with private security companies to run facilities inside California. GEO Group currently manages seven facilities for the federal government in California, including immigrant detention centers for US Immigration and Customs Enforcement (ICE).”
GEO Group has received two new contracts with U.S. Immigration and Customs Enforcement for five company-owned facilities in California totaling 4,490 beds. On a combined basis, they’re expected to generate more than $200M in annualized revenue for GEO. Along with the two ICE contracts, GEO Group also entered into a long-term contract with the U.S. Marshals Service on Dec. 23, just over a week before AB 32 took effect.
20) National: Bloomberg reports that CoreCivic has secured a loan from Nomura. “In November, investors started getting calls from Nomura pitching a new version of the financing Citizens had previously attempted, shortening the maturity to five years from seven, the people said. Eventually, CoreCivic had to pay a significant premium to tap the market, reflecting the growing concern of being associated with the private-prison industry among the institutional investors that ultimately buy the loans. The $250 million of debt was issued at a spread of 4.5 percentage points over Libor and at a discount of 95 cents on the dollar, according to the people. That compares with an average risk premium of about 2.5 percentage points for similar-rated BB loans over the past few months, data compiled by Bloomberg shows. ‘CoreCivic’s difficulty in placing the deal is the result of the increased inclusion of ESG factors in the investment process of many fixed income investors,’ Pierre Beniguel, a portfolio manager at TwentyFour Asset Management, wrote in a blog post on Monday, referring to environmental, social and governance criteria used to screen potential deals. ‘Despite the company’s improving fundamentals, this increased focus on ESG has eroded its access to markets.’”
CoreCivic reportedly “intends to use substantially all of the net proceeds to fund a portion of the previously announced redemption of the company’s $325.0M of 4.125% senior notes due 2020, on Jan. 1, 2020.”
21) National: Worth Rises and the Brooklyn Community Bail Fund have released a report spelling out how county jails extract wealth from New York communities. “Although New York has no private prisons or jails, for-profit corporations reap millions of dollars through jail service contracts and repay their government partners with kickbacks. Through these profit-sharing agreements, local governments collude with prison profiteers in the exploitation of communities across New York.”
22) National: Writing in The Intercept, Aida Chavez reports that one of Democratic presidential candidate Joe Biden’s top fundraisers, Michael F. Neidorff, “is the CEO and chair of Centene—a health insurance company that’s a major player in the prison health care market.” Biden’s platform says he will “end the federal government’s use of private prisons, building off an Obama-Biden Administration’s policy rescinded by the Trump Administration. And, he will make clear that the federal government should not use private facilities for any detention, including detention of undocumented immigrants. Biden will also make eliminating private prisons and all other methods of profiteering off of incarceration—including diversion programs, commercial bail, and electronic monitoring—a requirement for his new state and local prevention grant program. Finally, Biden will support the passage of legislation to crack down on the practice of private companies charging incarcerated individuals and their families outrageously high fees to make calls.”
23) National: Fortune magazine reports that the U.S. Postal Service could be privatized as soon as this year. “Once the new leadership is in place, the board will also be tasked by the Trump administration with creating a package of large, structural changes intended to help the ailing Postal Service. Those changes will likely include privatizing and selling pieces of the public service off, according to the American Postal Workers Union (APWU), which represents more than 200,000 current and retired postal employees.” The APWU will deliver 350,000 petition signatures to the Postmaster General.
24) Virginia/District of Columbia/Maryland: The Transdev strike drags on. @peterjgowan of Democracy Collaborative says “ATU 689 approve a new contract with WMATA that will guarantee the Cinder Bed garage is brought in-house by 2021 and no privatization of the Silver Line, but Transdev is still refusing to negotiate with workers in good faith about the remainder of their contract. Shame on them.”
25) International: John Pilger’s powerful documentary The War on the NHS, which covers the crisis in the system and the effects of creeping privatization, has finally been shown on British TV. You can watch the full length video here (about two hours).
26) International: In a brief video, the British anti-privatization campaigning group We Own It asks “These countries have their services in public ownership. Why can’t we?” See their worldwide map of how cities and citizens are turning back privatization.
27) International: In a new report, The Global Initiative for Economic, Social and Cultural Rights (GI-ESCR), in collaboration with the University of Essex Human Rights Centre Clinic and the Initiative for Economic and Social Rights (ISER), has set out a human rights assessment of private actors in the health sector. The report “unpacks States’ human rights obligations in the context of the increasing privatisation of healthcare, particularly health financing and provision. It presents a preliminary human rights impact assessment framework for evaluating the consequences of private actor activity on the right to health.”
28) National: A useful resource is NCSL’s clickable state-by-state map of key legislative session dates for 2020.
29) National: Rep. Alexandria Ocasio-Cortez (D-NY) has introduced legislation to require federal contractors to obey federal labor law and allow unions. Under the law “the contractor or subcontractor must show the feds it has ‘a policy to employ individuals who are represented by a labor organization that has entered into a collective bargaining agreement on the behalf of such individuals.’ In plain words: a union shop.” Presidential candidate Amy Klobuchar has supported some of the measures, though she hasn’t specifically endorsed the bill. Co-sponsors of AOC’s bill include Rep. Grace Meng (D-NY), Rep. Sylvia R. Garcia (D-TX), Rep. Rashida Tlaib (D-MI), Rep. Grace F. Napolitano (D-CA), Rep. Jesus G. “Chuy” Garcia (D-IL), and Rep. Barbara Lee (D-CA). [H.R. 5073]
30) International: The New South Wales government in Australia “is poised to privatize the state’s plantation forests as part of a fresh round of sale and lease arrangements in 2020 to fund ambitious infrastructure projects,” the Guardian reports. “The sale will be controversial in regional areas such as Bathurst, Oberon, Bega, Tumut and the north-west, where large softwood plantations are important employers. Forestry Corporation also manages 34,000 hectares of hardwood timber plantations and has stewardship of about 2m hectares of coastal native forests, cypress forests and red gum forests. These are not proposed to be part of the deal. But their future could be uncertain once the money-making softwood division is sold or leased. Green groups want greater protections for native state forests, particularly after this summer’s fires, which have put pressure on habitats for koalas and other native animals.”
Governing for the Common Good
31) California: As San Francisco Mayor London Breed steps up the city’s game to meet a critical shortage of bus mechanics, the Amalgamated Transit Union points to a successful part of the solution: “#SanJose Local sets example with bus mechanic #apprenticeship program.”
32) DC Metro Area: Local governments are developing innovative strategies to combat plastic pollution. “Many people don’t understand how the plastic they consume and throw out the car window can harm the natural world around them. That’s why jurisdictions in the Washington region are using an array of strategies to educate residents, and to halt illegal dumping and the pollution it causes. Prince George’s County has launched a series of public education efforts targeting residents with information on exactly how they can become more environmentally conscious. ‘We do flyers, emails, Facebook, Twitter, Instagram,’ said litter reduction program manager for Prince George’s County Tiaa Rutherford.” Only 9% of the world’s plastic gets recycled.