June 13, 2014


Treasury official pushes back on idea to privatize Fannie, Freddie. Mary Miller, the under secretary for domestic finance, told the National Housing Conference that much of the recent profits at the mortgage-buying giants have come from tax-related one-time gains and legal settlements as well as income from retained portfolios, which are being wound down. “In short, adequately recapitalizing the GSEs would take longer than many realize or would admit,” Miller said. “Only legislation can protect taxpayers by responsibly winding down the GSEs and replacing them with a system where a government guarantee is transparent and explicitly priced,” she added.  MarketWatch

TX: Private Toll Road Considered to Counter Population Boom. Facing traffic congestion that is only expected to get worse, officials in North Texas are weighing a proposal to build a toll road for commuters into Dallas. The Texas Turnpike Corporation of Dallas has proposed a private toll road, the only of its kind in the state, connecting Greenville and Wylie, and local transportation officials say they are keeping an open mind. . . . Any road, however, is years away. A private road would have to be approved by the Texas Department of Transportation and comply with regional regulations, including how to set tolls, Mr. Shelton said. In addition, the corporation would need to acquire the land. The possible route of the Blacklands toll road has already drawn some opposition from rural residents. . . . Over the last decade, as state and federal transportation funding has dropped, communities across Texas have increasingly turned to tolling to fund highway projects. The state is now home to more than 20 toll facilities, with more in development. Texas has long encouraged public-private partnerships in transportation projects, most notably the southern leg of State Highway 130 from Austin to Seguin, which opened in 2012. A private consortium designed and built the road and agreed to operate and maintain it for 50 years in exchange for a cut of the revenue. The consortium, however, does not own the land.  New York Times

TX: Era of the toll is about to dawn on Dallas-area highways. Virtually every major Dallas-Fort Worth highway project includes plans for new tolls, in many cases replacing what have traditionally been free carpool lanes. By the time billions in planned construction is done, most of the area’s major corridors will either be toll roads or feature some sort of toll component. In large part, the growing network of toll highways can be attributed to living in a state with a booming population and a Legislature that dodges solving transportation funding shortfalls. Texas lawmakers haven’t raised the state gas tax, the primary revenue source for transportation funding, in decades. They also haven’t developed a meaningful, long-term alternative funding source. When inflation and fuel efficiency in vehicles are factored in, Texans effectively are paying far less to fund transportation needs than they were 20 years ago. Dallas Morning News

IL: Chicago schools trying to privatize their PE programs. The push to privatize the physical education curriculum was clear on the day the Board of Education was presented with an extensive Power Point outlining the program, which was voted on and approved at the January 2014 Board meeting. The actual policy approved by the Board was put together by stringing a bunch of clichés and nostrums, accompanied by a lengthy list of supposed partners, endorsers, and “stakeholders.” The endorsers and stakeholders supposedly really like the program. A Power Point timeline presented how the program would be rolled out during the 2014 – 2015 and 2015 – 2016 school year. How the principals and schools were to pay for it was left out, except when the presentation was challenged, briefly, by one Board of Education member. Discussionist

VT: Our Opinion: The downside of privatization. Much has been said in recent years about income inequality, the disappearing middle class and the widening gap between the super-rich and the rest of us. Some of this can be attributed to manufacturers and other companies outsourcing good-paying jobs to other countries with cheap labor. However, new studies indicate that our own local, state and federal governments are contributing to the problem by outsourcing and privatizing public services in order to save money and balance their budgets. The irony is that this practice has been shown to actually have greater financial and societal costs in the long run. “In theory, privatization is a great deal for taxpayers because it saves a few bucks in the town budget,” according to Jared Bernstein, a senior fellow with the Center on Budget and Policy Priorities. “In reality, taxpayers are funding the downward spiral of their own communities — and often paying far greater costs in the long run. The degradation of formerly family-supporting jobs through government outsourcing turns middle class careers into poverty-level jobs. Governments across the country are using our public dollars to fuel the low-wage economy and increasing economic inequality.” Brattleboro Reformer