February 8, 2013


PA: Convention Center board votes to seek privatization proposals

The board of the Pennsylvania Convention Center Authority voted Thursday in favor of seeking proposals from companies to privatize certain functions of the Convention Center…. “As a public agency, federal tax rules prevent us from fully privatizing with a for-profit venture,” Fox said. “There are some limitations. Philadelphia Inquirer

OH: Council should heed the red flags from Chicago – opinion

While a large lump sum to lease Cincinnati’s parking meters, lots and garages might sound like a sweet deal, we must consider potential pitfalls and hidden costs that often accompany privatization deals. Chicago is now suffering from buyer’s remorse, and Cincinnati is in a position to learn from its mistakes. In particular, there are three common problems with privatization that should make City Council think twice about its privatization plans.  Cincinnati.com

OH: Kasich plans to privatize food service at prisons

Up to 456 state jobs could be lost, but many employees could be offered positions with the private contractor, officials at both agencies said. Exactly how many jobs that would be is unknown. The proposal, included in Gov. John Kasich’s budget released Monday, is vigorously opposed by the Ohio Civil Service Employees Association, the union representing 33,000 state workers, including prison staff. Columbus Dispatch

IL: Chicago Midway Plan Draws Interest From Ferrovial, GIP           

The leasing of Chicago’s Midway International Airport is drawing investor interest from Global Infrastructure Partners LP to Ferrovial SA, London Heathrow’s biggest shareholder, as privatization efforts advance.  Bloomberg

NH: House Hears Bill To Ban Prison Privatization

The bill to ban private prisons comes as the state continues to evaluate bids from private contractors for three potential projects: a 1500 bed facility for men; a 200 bed facility for women and a third co-ed prison. The lead sponsor of the proposed ban, Keene Democrat Tim Robertson, says NH needs to stay far away from letting for profit companies run NH prisons. “There is no evidence that they can actually save you money and the incentive is for them to get more money out of us by keeping people in longer and in longer and treating them worse.” NH Public Radio

Background on the $15.9 Billion Loss by the Postal Service

Congress has put the Postal Service in an impossible situation. It has imposed restrictions, like the requirement that all assets in its pension and retiree health fund be invested in government bonds that substantially raise its costs relative to competitors. It has also prohibited USPS from getting into new lines of business that take advantage of its resources in order to protect private sector companies from competition. However it still expects the USPS to be run at a profit. Clearly the Post Service would face difficulties in any case as technology has led to a shift away from first class mail, the system’s main source of revenue. However the restrictions that Congress imposes makes it impossible for USPS to adjust to changing economic conditions.  CEPR

The post office can still be saved, but its grave has been dug

Elaine C. Kamarck of Harvard Kennedy School of Government has observed the essential contradiction in Congress’ attitude toward the post office from the very beginning of its new life as a corporation. “Congress wants it to be self-sufficient but doesn’t want it to make money.” Kamarck continues: “For example, in the mid-1970s, the post office was told to remove copy machines from post offices under pressure from lobbyists representing office equipment stores who feared that USPS was taking away its business…”Years later, when Internet shopping took off, the delivery of packages to individual households should have resulted in a dramatic increase in USPS business. But parcel shipments were generated by large organizations and the USPS was not allowed to negotiate discounts and thus lost business. It was forbidden by law from lowering prices to get more business. This resulted in the entirely incredible situation in the 1990s where the United States government negotiated an agreement for the delivery of U.S. government package services with Fed Ex because the USPS was not allowed to negotiate for lower prices!”  Alternet