May 13, 2014


The Privatization Scam. . . Unfortunately, as governments at the city, state and federal level continue to lack the political will to raise taxes or cut spending, as our infrastructure continues to deteriorate, and as political leaders such as President Obama and Congress peddle the idea, the pressure to privatize public goods will continue to rise. Indeed, it’s no longer companies like Deloitte offering to do deals; we’ve reached the point where the Motley Fool is pitching retail investors. It’s a topic I’ve given a lot of thought to, because in my role as Legislative Advocate for NJPIRG, I played a meaningful role in defeating then-New Jersey Governor, nee Goldman Sachs Jon Corzine’s push to privatize New Jersey’s ‘three big roads’–the Turnpike, the Garden State Parkway, and the Atlantic City Expressway. The policy arguments we made then (2007)–and which USPIRG and others continue to make today–remain true, and provide a good, accessible framework for judging any privatization deal that may affect you.  Reality Check

The Road to Ruin: Can We Afford the Anti-Tax Movement? Experience has shown that the anti-tax movement is a luxury we cannot afford. Its clout and legislators’ fear of that clout means that taxes cannot be raised – even to keep pace with inflation. The result is crumbling infrastructure and no way to build new or repair what exists. As a result, we are left without money to maintain, repair and build our roads, bridges and other transportation infrastructure – not to mention other needs that we are unable to meet. We are told that the private sector can fill these needs, but, as it turns out, privatized infrastructure depends on public money – and a lot of it. How much public versus private money is invested in infrastructure privatization? At the March 5, 2014, congressional hearing called Overview of Public-Private Partnerships in Highway and Transit Projects, witnesses who are fans of privatization testified that the private “partners” in PPPs invest as little as 3 percent to 20 percent – leaving the public to fill the 80-97 percent gap in funding.  Truth-Out

Public-private Monument model? The public-private partnership that funded the nearly three-year, $15 million effort to fix the earthquake-damaged Washington Monument should be a model for future projects, billionaire David Rubenstein said in a CNBC interview Monday—the day the iconic obelisk reopens to visitors. Rubenstein matched the federal funding of $7.5 million to expedite the renovation, following damage from a rare D.C.-area quake in August 2011.

Transportation Secretary: Obama Administration’s Plan for More Toll Roads Not ‘Free-For-All ‘ Proposal. “There has been a lot of interest in the toll issue, but it’s actually not how we pay for our bill,” Foxx told TheBlaze. “The way we pay for our bill is the way I said we would pay for it, which is pro-growth business tax reform. . . .The legislation would add business taxes, close some corporate tax loopholes and would include numerous provisions of one-shot revenue of $150 billion – which would cover about half the cost of the bill. “The tolling piece, which is a smaller piece of our bill, but what it basically does is it enables a given governor if they decide they want to pursue tolling to apply to the federal government and to have a decision made about whether they are using that toll revenue to improve the facility they’re using or to relieve congestion,” Foxx said. “Then, at that point, if its acceptable to the U.S. DOT, they would have more capability to do it. But it is not a free for all, it’s not a way we pay for our bill.”

Counterfeit feds. . .The column also prompted this email from an IRS employee who worries about scam artists posing as federal workers. He said: Mike, we could be looking at a lot of stuff like that for sure. But can you trust the private sector more or less than the current fed? I just wanted to relate to you a story that happened this week. I’m not looking for a pat on the back, I felt I was just doing my job. Late Tuesday I got a call from one of the guys in my golf league who is an accountant. He had a 70-year-old lady on the other line, because she had someone on the phone claiming to be from the IRS threatening to throw her in jail if she didn’t pay $70 she owed. . . I told my friend to calm the lady down that this was a scam and to save that number and come into our walk-in office and report the number. . .I went home really upset over slime bags trying to steal from vulnerable retirees. So the point of all this is that, if Congress does privatize a lot of services, can you trust them? I feel you can trust the fed on the front line dealing with the public — but those overseeing the agency is another story. Unfortunately, we get lumped in with those people.” The IRS got a reputation awhile back for having mean collectors. Turns out the vast majority of them were private bill collectors. Congress forced the IRS to turn over hard-to-collect debts to take-no-prisoners, meaner-than-a-junk-yard-dog private collectors who worked on commission. Congress finally ended the program (this was the second time it was tried, crashed and burned). But it will probably come up again. Stay tuned… Federal News Radio

Private Prisons Eat Our Humanity. Somebody figured out, once again, how to build a machine that can quantify the life of an African-American man and make money off him. They figured out how to use the value of his body to fuel their machine. They learned how to drive its engine, and how to turn a profit. They call it prison privatization. I call it mining black gold, and I have watched black gold be mined from the streets of my community every day. ACLU

VA: Roanoke to privatize downtown parking enforcement. The city is outsourcing on-street parking enforcement to the same contractor that has operated and managed city-owned parking garages and surface lots for at least six years, Atlanta-based Lancor. . .  Lancor will be paid a flat fee for on-street parking enforcement, so they have no incentive to write more citations to generate more income, Townsend said. . . .The switch will be cost neutral for the city, he said. Current full-time city parking department staff, including enforcement officers and one office staffer, have been offered positions with Park Roanoke. If they don’t want those jobs, the city will work with them to find a position elsewhere in city government, Townsend said. Roanoke Times