Headlines

1. Forest service drops plan to pull employees out of forests
2. Blackwater and company
3. Obama’s Blackwater problem
4. WV: Private-public roads funding bill sent on
5. SC:Â PPP legislation in place

News Summaries

1. Forest service drops plan to pull employees out of forests
The U.S. Forest Service has abandoned a restructuring of its environmental planning that would have pulled its biologists and other specialists out of national forests, according to an internal agency memo released today by Public Employees for Environmental Responsibility, PEE, and reported by ENS. Under the plan, thousands of employees posted to forests across the country would have been reassigned and consolidated into six centers, affecting more than a quarter of the agency’s entire workforce. This retreat follows a series of recent setbacks in efforts to privatize large portions of Forest Service operations. With less than one year left in the Bush administration, it is unlikely that the plan will be revisited anytime soon, said PEER Executive Director Jeff Ruch, whose organization had first revealed the agency’s intentions.

2. Blackwater and company
Robert O’Harrow Jr. writes in the Washington Post’s Government Inc. blog: "Congress took yet another look yesterday at one of the most compelling themes of the wars in Afghanistan and Iraq: the use of Blackwater and other private security contractors, or PSCs. This time it was the Senate Homeland Security and Governmental Affairs Committee doing the looking. "An Uneasy Relationship: U.S. Reliance on Private Security Firms in Overseas Operations," was the formal title of the session."

3. Obama’s Blackwater problem
Jeremy Scahill writes in Huffington Post that: "A senior foreign policy adviser to leading Democratic presidential candidate Barack Obama told me that if elected Obama will not "rule out" using private security companies like Blackwater Worldwide in Iraq. The adviser also said that Obama does not plan to sign on to legislation that seeks to ban the use of these forces in US war zones by January 2009, when a new President will be sworn in. Obama’s campaign says that instead he will focus on bringing accountability to these forces while increasing funding for the State Department’s Bureau of Diplomatic Security, the agency that employs Blackwater and other private security contractors."

4. WV: Private-public roads funding bill sent on
Legislation allowing highways to be built with private and public funds – and possibly charge tolls – was approved Wednesday by the state West Virginia House of Delegates, reports the Charleston Gazette. The proposal would allow public-private deals for future construction projects. As compensation, the private partners could collect tolls or user fees – and mine coal or obtain other natural resources on the sites. Critics said it could hurt business in such areas as the Eastern Panhandle. Delegate Robert Tabb, D-Jefferson, said residents of neighboring Virginia and Maryland would avoid West Virginia and the tolls, and that would hurt businesses in the region.

5. SC: PPP legislation in place
The Columbia City Paper reports that the South Carolina Dept. of Transportation has public-private partnership (PPP) legislation in place.

Publications/Reports
Highway Public-Private Partnerships: More Rigorous Up-front Analysis Could Better Secure Potential Benefits and Protect the Public Interest, GAO-08-44, February, 2008. Highway public-private partnerships show promise as a viable alternative, where appropriate, to help meet growing and costly transportation demands. The public sector can acquire new infrastructure or extract value from existing infrastructure while potentially sharing with the private sector the risks associated with designing, constructing, operating, and maintaining public infrastructure. However, highway public-private partnerships are not a panacea for meeting all transportation system demands, nor are they without potentially substantial costs and risks to the public–both financial and nonfinancial–and trade-offs must be made…..There is no "free" money in highway public-private partnerships.
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Privatization Watch is a project of Essential Information, PO Box 19405, Washington, DC 20036, www.essential.org. Essential Information is a non-profit, tax-exempt organization involved in a variety of projects to encourage citizens to become active and engaged in their communities. To contact Privatization Watch, email [email protected]

Headlines

1. Private medicare plans’ cost questioned
2. Fitch downgrades North Texas tollway rating
3. FL: Tunnel gets a go-ahead
4. Pittsburgh: Would toll road unclog Parkway East?
5. NJ: Republican gets behind Corzine’s unpopular toll hike plan

News Summaries

1. Private medicare plans’ cost questioned
Private Medicare plans often cost beneficiaries more than the traditional government-run Medicare program, Congressional investigators say, according to The New York Times. Many private plans advertise extra benefits and low costs. But in a report to be issued Thursday, the Government Accountability Office, an investigative arm of Congress, says that many people in private plans face higher costs for home health care, nursing homes and some hospital stays.

2. Fitch downgrades North Texas tollway rating
Fitch Ratings has downgraded its rating on $1.3 billion in outstanding North Texas Tollway Authority (NTTA) Dallas North Tollway System revenue bonds to ‘BBB+’ from ‘A-‘ and simultaneously withdraws them. All debt ratings for this issuer are also withdrawn at this time. Fitch will no longer provide rating coverage of the North Texas Tollway Authority, according to a report on YahooNews.

3. FL: Tunnel gets a go-ahead
The Florida Department of Transportation announced last week that it is moving forward with the state’s largest public-private partnership – the $1.2 billion Port of Miami tunnel project, according to The Bond Buyer (subscription). Although signing the final contract is about a year behind schedule due to the complexity if negotiations between the DOT and its funding partners – the city of Miami and Miami-Dade County – a consortium called Miami Access Tunnel LLC will design, build, finance, operate, and maintain the tunnel project through a concession contract that provides it with availability payments for 30 years after the tunnel opens to traffic. The Florida DOT is spearheading the project that involves boring two 3,900-foot tunnels about 100 feet below the water to create a bypass for buses carrying cruise ship passengers and freight trucks heading to the Port of Miami. Currently, thousands of those vehicles head in and out of the port every day, causing extreme congestion as they pass through the heart of downtown Miami. The Florida DOT will fund about half of the cost through its annual budget.

4. Pittsburgh: Would toll lanes unclog Parkway East?
The Pittsburgh Post-Gazette reports on the Pennsylvania Turnpike Commission’s plan to build elevated toll lanes over part of the Parkway East. "It’s an idea, that’s all," turnpike commission Chief Executive Officer Joe Brimmeier said. He got the idea from the Tampa-Hillsborough (Fla.) Expressway Authority whose 15 miles of toll road include six miles of elevated lanes opened two years ago. State Rep. Rick Geist, R-Blair, the ranking Republican on the House Transportation Committee, thinks the elevated lane or lanes over the Parkway East "make a lot of sense as a public-private partnership." Mr. Geist said elevated lanes would likely use "time-of-day pricing," meaning a charge of, perhaps, $5 during the busy morning and afternoon rush hours, but lower during nonpeak hours. Drivers would have the choice of paying to drive in a less-congested elevated lane or the usual bumper-to-bumper free lanes on the ground. The cash toll on the elevated section of the toll road in Florida is $1.75 for cars.

5. NJ: Republican gets behind Corzine’s unpopular toll hike plan
Gov. Jon Corzine’s unpopular plan to pay down state debt and fund transportation needs by sharply increasing tolls still may be the best way for the New Jersey government to escape its prodigious financial mess, former Republican U.S. representative Bob Franks told an audience at Rutgers University’s Eagleton Institute of Politics last night, reports The Star-Ledger.

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Privatization Watch is a project of Essential Information, PO Box 19405, Washington, DC 20036, www.essential.org. Essential Information is a non-profit, tax-exempt organization involved in a variety of projects to encourage citizens to become active and engaged in their communities. To contact Privatization Watch, email [email protected]

Headlines

1. NC: Mental disorder: failure of reform
2. TX: Lawsuit challenges impact of toll road
3. DE: U.S. 301 bypass to be toll road
4. CO: Toll road bills debated this week
5. Detroit schools’ food charges probed
6. NY Assembly Leader: State shouldn’t share endowment with private schools
7. Lawmaker: extend tax break to Idaho private school parents

News Summaries

1. NC: Mental disorder: failure of reform
The News & Observer has published a series on the mental-health privatization in North Carolina that was intended to improve community treatment and give taxpayers good value, but they have done neither. Local governments, forced to stop offering treatment, were replaced by providers out to make a profit. Most of their workers were high school graduates, not licensed professionals, but the bill was stunning. In a few months, the cost of the community support program was $50 million a month, more than 10 times what the state had expected. Providers took clients shopping, swimming and to movies for $61 an hour.

2. Texas: Lawsuit challenges impact of toll road
A long-running standoff over plans to morph part of U.S. 281 into a tollway — a spat that could lead to costly delays for motorists — headed to a federal court Tuesday, reports the San Antonio Express-News. Toll road critics and environmental activists joined forces, once again, to file a lawsuit on the last day of a deadline to legally challenge the tollway’s latest environmental study. The 48-page lawsuit challenges the environmental study’s conclusion — that widening U.S. 281 and tolling the express lanes would not significantly harm people, wildlife or drinking water. Activists called the claim ridiculous. "Charging a toll will only hurt local businesses and residents who have invested in the 281 corridor," said Terri Hall, founder of Texans Uniting for Reform and Freedom. "Powerful special interests will profit from these tolls."

3. DE: U.S. 301 bypass to be toll road
The Delaware Department of Transportation plans to spend more than $602 million in bond money to build the U.S. 301 Middletown bypass in the next nine years, then repay the bond from toll revenues starting in 2017, reports The News Journal. Darrel Cole, DelDOT’s director of public relations, said the toll plaza will be at the start of the bypass, at the Maryland line near Warwick. He said the amount of the toll "will probably be comparable to the I-95 toll," which is now $4 for two-axle vehicles. Officials have been fighting for years with civic associations and community groups over the plan and proposed routes.

4. CO: Toll road bills debated this week
Call it the duel of the toll road bills. On on side, we have HB1007 from Rep. Marsha Looper, a Calhan Republican. Her bill would clear the titles of property along a proposed toll road path on the eastern plains. On the other is HB1343, introduced last week by Rep. Debbie Stafford, D-Aurora, and Sen. Tom Wiens, R-Castle Rock. That bill would not only clear titles but eradicate mention of the toll road proposal from all public records. It also would prevent companies from securing a toll road corridor by claiming they are a railroad company, reports the Colorado Springs Gazette.

5. Detroit schools’ food charges probed
The contractor that puts food on the plates in Detroit public schools pocketed food rebates and discounts that should have been given back to the district and charged $1.6 million for unclear reasons, according to records obtained by the Detroit Free Press.

6. NY Assembly Leader: state shouldn’t share endowment with private schools
New York Assembly Speaker Sheldon Silver said yesterday he had reservations about Gov. Eliot Spitzer’s plan to create a $4 billion education endowment by privatizing the Lottery and that he is against any of the money going to private schools, according to the Lower Hudson Valley Journal News. "I think the private colleges, many of them have their own endowments, so what we’re talking about publicly is creating a public university endowment," said Silver, D-Manhattan. As for sharing money with private institutions of higher education, "I’m not sure that’s an appropriate use of public money," he said.

7. Lawmaker: extend tax break to Idaho private school parents
A southwestern Idaho lawmaker aims to let parents with kids in private religious or secular schools deduct up to $5,000 in tuition costs from their state income taxes, according to a report in the Idaho Statesman.

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Privatization Watch is a project of Essential Information, PO Box 19405, Washington, DC 20036, www.essential.org. Essential Information is a non-profit, tax-exempt organization involved in a variety of projects to encourage citizens to become active and engaged in their communities. To contact Privatization Watch, email [email protected]

Headlines

1. Feds must lead way on roads
2. State Senator: Managed lanes project on I-635 is critical to North Texas
3. States draw fire for pitching citizens on private long-term care insurance
4. Ark Gov. says rural states unlikely to support toll roads
5. Idaho Gov. dumps private lockup plan, concedes state will own new prison
6. Indiana: Gov. Daniels touts Gary airport
7. Milwaukee school voucher study finds parity
8. Ohio: Residents protest decision to privatize trash collection
9. AZ: Panel pushes P3 toll lanes; rest areas
10.D.C. contacts private groups to aid ailing schools


News Summaries

1. Feds must lead way on roads
US Rep. Peter DeFazio (D-OR), chairman of the House Subcommittee on Highways and Transit, writes in Eugene’s Register-Guard "…Transportation Secretary Mary Peters pushes the Bush administration’s belief that we should freeze federal infrastructure investment and that our massive congestion problems can be solved simply by tolling, rationing and privatizing our surface transportation system. For 200 years, lawmakers have shared the belief that the federal government had a significant responsibility to maintain a surface transportation system that unites our citizens, facilitates commerce and ensures that America is competitive in the global marketplace. That consensus prevailed until the administration of George W. Bush. For the first time in our nation’s history we have a secretary of transportation who wants to phase out federal investment.

2. State Senator: Managed lanes project on I-635 is critical to North Texas
Texas State Senator John Carona (R) touts ‘managed lanes’ (toll roads) in The Dallas Morning News: "A recently discovered accounting error at the Texas Department of Transportation has placed us even further behind in getting the projects we need on the ground…..we must rely to an extent on privatization, toll roads and innovation to fill the gap. Thus, the groundbreaking nature of a critically important effort known as the I-635 Managed Lanes Project.

3. States draw fire for pitching citizens on private long-term care insurance
Last year, six million letters bearing Gov. Arnold Schwarzenegger’s name and official state seal went out to Californians. The missives, sent by a direct-mail company called Senior Direct Inc., were pitch letters, urging many low- and middle-income residents to buy long-term care insurance to cover any future nursing home bills. Behind the plug: California, like many other states, is trying to curb the high costs of long-term care paid under Medicaid, the joint federal-state health insurance program for low-income people, according to an article in The Wall Street Journal (subscription). The state endorsements are "the single best thing that has happened to the long-term care industry," says Jesse Slome, executive director of the American Association of Long-Term Care Insurance. Total premiums collected for long-term care, or LTC, policies were $10 billion in 2007, up 21% from $8.2 billion in 2004. Critics are sounding alarm bells. They argue that the financial benefits of LTC insurance for many target customers are negligible to nonexistent. Their income and assets are so low that they would quickly qualify for free care under Medicaid.

4. Ark Gov. says rural states unlikely to support toll roads
While the federal transportation secretary says privately built toll roads can help meet states’ transportation needs, Arkansas Gov. Mike Beebe says rural areas don’t have the traffic counts that will justify their construction. Speaking to the National Governors Association on Sunday, U.S. Transportation Secretary Mary Peters said private dollars are needed to meet highway needs, not just public funds that are subject to regular fights in Congress, according to a report in The Daily Citizen.

5. Idaho Gov. dumps private lockup plan, concedes state will own new prison
Idaho Gov. C.L. "Butch" Otter said Monday he’s abandoned efforts to completely privatize Idaho’s new prisons, yielding to lawmakers who weren’t ready to let a company control a state correctional facility. Idaho still needs a new prison, but Otter will accept an arrangement in which the state owns the building and contracts with a company to run it. That’s akin to the existing operation at the Idaho Correctional Center south of Boise, reports the Idaho Statesman.

6. Indiana: Gov. Daniels touts Gary airport
Leasing Gary’s airport to a private operator “is a tantalizing subject,” Gov. Mitch Daniels told a Washington audience of private-enterprise advocates Monday, reports the Fort Wayne Journal Gazette. “The mayor of Gary has said that he is prepared to look at the possibility of some kind of a lease of that facility that might bring some private capital into the game, too,” Daniels said during a question-and-answer session at the American Enterprise Institute. “There’s a heck of an opportunity there if we can get it right,” he said of the airport. “I would use both public and private tools. I support that.”

7. Milwaukee school voucher study finds parity
The first full-force examination since 1995 of Milwaukee’s groundbreaking school voucher program has found that students attending private schools through the program aren’t doing much better or worse than students in Milwaukee Public Schools, reports the Milwaukee Journal Sentinel.

8. Ohio: Residents protest decision to privatize trash collection
About 300 Upper Arlington residents packed the City Council chambers last night to let council members know how angry they are with its decision to privatize trash collection, reports The Columbus Dispatch. Before the meeting, most of the crowd protested in front of the Municipal Services Center at 3600 Tremont Rd. They were joined by members of Teamsters Local 284, who remove the suburb’s trash, yard waste and recyclables. Michael Schadek organized the protest and a petition drive to place a referendum on the ballot in the November election. He asked council members to postpone their contract with Texas-based Inland Waste Services. Inland is scheduled to begin work April 7, and the city’s 25-person Solid Waste Division will be disbanded. Shelly Smith, 36, a resident of Columbus’ West Side and a 10-year employee of the Solid Waste Division, said none of her colleagues will apply to work for Inland. "They couldn’t tell us what health benefits are," she said. "They couldn’t tell us what they’d pay us."

9. AZ: Panel pushes P3 toll lanes; rest areas
The Senate Transportation Committee has approved a measure requiring the Arizona Department of Transportation to work with private partners to convert carpool lanes on a Phoenix-area state freeway into toll lanes by November 2013, reports The Bond Buyer (subscription). SB 1471, which will be considered by the full Senate this week, would allow vehicles with more than one occupant to use the lanes at no or reduced cost, with single-occupancy vehicles paying the full toll. If the measure becomes law, the highway department would have to issue a request for proposals for converting the high-occupancy vehicle lanes on Arizona Highway 51 by Nov. 15, 2013. The bill allows but does not mandate that AZDOT also convert HOV lanes on other state freeways into toll lanes. The committee also approved SB 1466, which would require AZDOT to privatize rest areas along state highways, and SB 1503, calling on the department to privatize the construction of new lanes on existing freeways by July 2009. Two measures that would have allowed state toll roads failed in committee. Members deadlocked on a bill ordering the AZDOT to develop private-public partnerships to finance and operate state transportation projects, and rejected one allowing the department to enter into P3s for the construction, financing, and operation of state toll roads. The committee delayed a vote on a bill that would enable cities, counties, and the state to form special transportation authorities with the power to finance, construct, and operate public highways and toll roads in Arizona with private partners.

10. D.C. contacts private groups to aid ailing schools
D.C. Mayor Adrian M. Fenty and Schools Chancellor Michelle A. Rhee are seeking educational management firms or universities to possibly run some or all 27 schools whose students chronically perform poorly, according to the Washington Post. At a news conference yesterday with Fenty (D), Rhee said she has entered discussions with several nonprofit businesses and universities to work with the schools in the fall, although she only disclosed one, Mastery Charter Schools of Philadelphia. The Washington Post reported in November that she had approached Mastery, and Green Dot Public Schools of Los Angeles and St. Hope Public Schools in Sacramento, about managing some failing high schools. It would be the first time the school system employed a private firm to run a school. Outside organizations manage schools in other cities.

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Privatization Watch is a project of Essential Information, PO Box 19405, Washington, DC 20046. Essential Information is a non-profit, tax-exempt organization involved in a variety of projects to encourage citizens to become active and engaged in their communities. To contact Privatization Watch, email [email protected]

Headlines

1. FL: Some privatization fails the ‘cheaper, better’ test
2. GAO report: Fighting fire with the wrong sector?
3. Outsourcing faulted in taxpayer-funded call center layoffs
4. PA: Consultant reaps state windfall
5. Ariz: Editorial: State’s transit woes won’t be resolved by toll roads
6. Wall St. analyst: $50 million from privatizing Vermont lottery too high
7. WV: Can public-private concept save roads?
8. Ex-inmate crusades against judge nominee
9. Cash crunch boosts government service firms
10. Penn: Analysis — Lawmaker adds incentives for state store selloff
11. UT: Privatization a possibility for recreation centers?
12. Opinion: Should mass transit be privatized in U.S.?

News Summaries

1. FL: Some privatization fails the ‘cheaper, better’ test
The Tallahassee Democrat reviews privatization under Florida Gov. Jeb Bush and how his successor has made some changes to Bush’s approach. "The Department of Veterans Affairs, for instance, wants to take over some staffing at three nursing homes that were opened with private nursing-assistant and kitchen employees during the administration of Gov. Jeb Bush. This is the latest example of something that looked good at the time, but apparently didn’t work out precisely as planned."

2. Fighting fire with the wrong sector?
The Government Accountability Office faulted outsourcing projects at the Forest Service in a report released last week, prompting renewed calls for more scrutiny of the Bush administration’s effort to contract out federal jobs, a plan known as competitive sourcing, according to the Washington Post. The Forest Service does not have a realistic long-term plan for determining which agency jobs should be given to the private sector and does not have reliable data to back up claims of cost savings, the GAO said. In addition, outsourcing substantial numbers of Forest Service jobs to the private sector could, over time, reduce the agency’s ability to fight fires in the wilderness and to respond to emergencies such as Hurricane Katrina.

3. Outsourcing faulted in call center layoffs: Operators: Internet-based relays are to be sent through the Philippines
Layoff notices were distributed starting Friday to employees of a relay call center for the deaf that is scaling back operations. GoAmerica Inc. announced last week it is making the cuts because it blocked international calls, resulting in a drop in the center’s call volume. The service is for domestic use only, and employees said many of those international calls originated from Nigeria, where scammers would use the system to try to defraud U.S. businesses and residents. The taxpayer-funded service is used by the deaf, speech-impaired and those who are hard of hearing to relay phone conversations. At least a half-dozen employees said that while fraud had been a serious problem for years and made up a significant percentage of their calls, it’s not the only reason call volume has dropped. They also blame outsourcing to the Philippines, according to an article in the Modesto Bee.

4. PA: Consultant reaps state windfall
With the amount of money Deloitte Consulting has been paid by the state in recent years, some might consider it deserving to be a state agency in its own right.
During the last five years, state records show Deloitte Consulting, which opened an office in Susquehanna Twp. three years ago, has been paid nearly $414 million. With the contracts Deloitte still holds, the company is on track to approach or exceed the half-billion mark soon, according to a report in The Patriot-News. The international firm, with U.S. headquarters in New York City, provides audit, tax, consulting and financial advisory services. Most of its contracts with the state have been primarily for services related to information technology. Some current and former state workers question how this one company has gotten so much of the state’s business and whether it has anything to do with the ties to Deloitte held by four people in high-level positions in the Rendell administration. They also question whether any of this has clouded state officials’ judgment in being good stewards of tax dollars.

5. Ariz: Editorial: State’s transit woes won’t be resolved by toll roads
Arizona’s Tuscon Citizen has an editorial advising the state to go slow in toll roads. "Arizona is running on fumes financially, and its transportation system is especially needy.. We will need at least $60 billion in road, highway and rail fixes in the next 20 years as the state fills up with people. Some 10 million of us are projected to be living in the Tucson-Phoenix corridor by 2040. Given those stresses, it’s not surprising that state lawmakers this week took up measures to bolster revenue by bringing toll roads to the state.We urge them to go slowly. Making Arizona navigable is a huge, complex issue. Toll roads are a piece of the puzzle, but as one Maricopa County transportation official told The Arizona Republic, they "won’t solve the crisis."

6. Wall St. analyst: $50 million from privatizing Vermont lottery too high
An official with a leading Wall Street investment House says the $50 million Vermont Gov. Jim Douglas hopes to reap from privatizing the state lottery is too high, according to a report in the Burlington Free Press. J.P. Morgan Managing Director Jeffrey Hyman told the House Ways and Means Committee Wednesday that given the current state of securities markets, he doubts Vermont could get the $50 million up-front payment for allowing private investors to lease its lottery for 40 years. Douglas has built that amount into his budget proposal for this year, saying he wants to use half the money for school construction and the other half for property tax relief.

7. WV: Can public-private concept save roads?
The Register-Herald Reporter reports on a proposed Public-Private Transportation Act to build and maintain state roads. "West Virginia officials were approached by the Federal Highway Administration with a suggestion to consider the public-private concept since it has proved to be successful in other states."

8. Ex-inmate crusades against judge nominee
A private prison company executive nominated to become a federal judge has run into a determined opponent — a former inmate, reports the AP. President Bush in June nominated Gustavus A. Puryear IV, chief lawyer with Corrections Corporation of America, to become a U.S. district judge in Nashville. That led Alex Friedmann, who spent six years at the company’s prison in Clifton, Tenn., to investigate Puryear’s qualifications. He looked up every case where Puryear was listed on the docket as counsel. The prisoner-turned-inmate advocate found only five instances where Puryear was the attorney of record. By his count and Puryear’s, the judicial nominee has been involved in only two federal court trials during his career. Convinced that the well-connected Puryear was unqualified to be a federal judge and might face a conflict of interest overseeing litigation involving his former employer, Friedmann began a public relations campaign against the nomination that led all the way to the Senate.

9. Cash crunch boosts government service firms
The weakening U.S. economy has unleashed layoffs, reduced profits and sucked value from the stock market, but some companies, such as those that run prisons and consult for government, can benefit from harsh economic times, according to a report in Reuters. When state and local budgets see shortfalls, cash-strapped governments hire companies like management consultant Maximus Inc, social services provider Providence Service Corp and prison company Corrections Corp of America, according to analysts.

10. Penn: Analysis — Lawmaker adds incentives for state store selloff
The latest attempt to privatize Pennsylvania’s state-owned liquor stores faces the same formidable coalition as earlier tries and the added hurdle that stores now are widely viewed as more customer-friendly, reports the Pittsburgh Tribune-Review. "Most Pennsylvanians seem satisfied with the way the state store system is now. There isn’t a hue and cry for privatization," said Al Neri, editor of The Insider, a statewide political newsletter.

11. UT: Privatization a possibility for recreation centers?
Publicly owned recreation centers within Salt Lake County take notice: If a private company can do the work better, you might get shut down. The Utah House reversed course on Friday and approved a bill that would force Salt Lake County and all cities within the county to create an inventory of all "competitive activities" that are not so-called core governmental activities. In essence, public recreation centers are not quite on the chopping block yet. The bill just requires a listing so government officials can see whether public dollars would be better spent by allowing a private company to do the work. But Salt Lake County Mayor Peter Corroon fears the inventory is the first step toward a push for privatization that will eventually shut down recreation centers and golf courses, reports the Desert Morning News.

12. Opinion: Should mass transit be privatized in U.S.?
Wayne Madsen writes in the Columbus Dispatch: The privatization mania sweeping the nation has shown us that taking taxpayer-funded assets and turning them over to corporations is as close to vulture capitalism as one can get."

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Privatization Watch is a project of Essential Information, 1530 P Street, NW, Washington, DC 20005. Essential Information is a non-profit, tax-exempt organization involved in a variety of projects to encourage citizens to become active and engaged in their communities. To contact Privatization Watch, email [email protected]

Headlines

1. Big wave of unity stopped Calif toll road in its tracks
2. NJ: Toll-roads agency may evade scrutiny
3. NJ: Gov. Corzine will compromise on toll plan
4. GAO asks Congress to direct DOT and industry to set criteria for P3s
5. Texas highway funding law gives boost to public agencies, panelists say

News Summaries

1. Big wave of unity stopped Calif. toll road in its tracks

Among the towers of withering support provided by advocates for the 241 Foothill South Toll Road at last week’s California Coastal Commission hearing was the charge that surfers, as hard-core locals, were opposed to the measure because they didn’t want inlanders coming to the beach, reports the San Diego Union-Tribune. For some, this may be true, but for the thousands of surfers who gathered at Wyland Hall at the Del Mar Fairgrounds last Wednesday, the day marked a proud moment in surfing history, as surfers proved themselves to be a compassionate, conscientious subset of the population capable of rallying together in an uncanny manner when galvanized by a cause.

2. NJ: Toll-roads agency may evade scrutiny
New Jersey Gov. Jon S. Corzine would bar the public from examining the inner workings of the toll-road corporation that he wants to create to raise $32 billion, even though it would employ thousands and spend billions of dollars, according to the Courier Post. Under Corzine’s draft legislation for the toll-road monetization plan, the proposed Public Benefit Corp. would not be subject to the state’s Open Public Records Act. If approved, the corporation would operate more than 334 miles of state roads and could hike tolls by as much as 800 percent in the next 14 years.

3. NJ: Gov. Corzine will compromise on toll plan
Few were surprised when Gov. Corzine announced over the weekend that he would no longer seek to add tolls to Route 440, reports The Philadelphia Inquirer. "Oh boy, what a shock that was," joked Senate President Richard J. Codey, alluding to widespread speculation from day one that Corzine ultimately would leave Route 440, which connects New Jersey to Staten Island, toll-free. The question now is what other compromises the governor might consider as he tries to get his financial restructuring plan – including his toll-hike proposal – through the Legislature. The plan has drawn plenty of critics: Every Republican lawmaker has pledged to vote against it and a handful of Democrats, including State Sen. John Adler (D., Camden), have also voiced opposition.

4. GAO asks Congress to direct DOT and industry to set criteria for P3s
Congress should direct the Transportation Department and industry to develop criteria to identify and protect national interests in future public-private partnership deals that states and localities enter into to build public highways, the Government Accountability Office said in a report, according to The Bond Buyer (subscription). "In developing these criteria, the [transportation] secretary should identify any additional legal authority, guidance, or assessment tools required, as appropriate and needed, to ensure national public interests are protected in future highway public-private partnerships," said the report, which was released late Friday. "The criteria should be crafted to allow the department to play a targeted role in ensuring that national interests are considered in highway public-private partnerships, as appropriate." The report comes as lawmakers have been critical of Transportation Secretary Mary Peters for encouraging states to explore so-called P3s, as traditional funding sources such as the federal gas tax have failed to keep up with needs. States are increasingly exploring P3s for roads, including leases for as much as 99 years with teams of private firms to design, build, operate, maintain, and finance projects. In return the private group collects the tolls on the road for the length of the lease. Rep. James L. Oberstar, D-Minn., chairman of the House Transportation and Infrastructure Committee, has been a particularly vocal critic of the DOT’s P3 agenda. He believes that encouraging states to make their own deals with private partners would produce a national transportation network of varying quality from region to region. The GAO report cautions that there are many pitfalls in P3s, including what rate of return is reasonable and at what point profits should be shared with the public entity. Also, tolls on privately run roads are more likely to go up at steeper rates than under publicly managed roads.

5. Texas highway funding law gives boost to public agencies, panelists say
Texas’ new highway finance law placed a two-year chokehold on private development of toll roads, but it also cleared some obstacles standing in the way of turnpikes developed by existing agencies, transportation executives told The Bond Buyer‘s Texas Public Finance Conference yesterday. (subscription) "With all the discussion of public-private partnerships, a lot of people lost sight of the value of the public agencies already in operation," said Susan Buse, chief financial officer of the North Texas Tollway Authority. SB 792, passed in the final days of the Texas Legislature’s 80th Session last May, made sweeping changes in how highways and tollways are funded, placing a two-year moratorium on privately owned tollways. Exceptions were made for projects already in the works in the Houston, Dallas-Fort Worth, San Antonio, and El Paso areas. The new law, signed by Gov. Rick Perry in June, gave right of first refusal on toll projects to existing agencies, such as the NTTA in the Dallas suburb of Plano, the Harris County Toll Road Authority in Houston, or regional mobility authorities, including new RMAs such as El Paso’s. In the process of drafting the legislation, the NTTA was granted the right to bid for a $5 billion project that had already been awarded to a private developer, the team of Spanish toll-road consortium of Cintra and investment banker JPMorgan. Since winning that contract last year, the NTTA has issued $3.3 billion of bond anticipation notes – the largest such deal in history – to provide up-front payments to regional governments for the concession to build the State Highway 121 tollway. The authority expects to take out the Bans with long-term bonds within months. In the process of winning the contract, the NTTA and other toll agencies learned some lessons from the negotiation process, according to Buse. "One of the things we learned from the proposals of the private sector is that raising toll rates no longer appeared to be political suicide," she said. SB 792 also provided a new process for valuing proposed tollways, a "template" that the NTTA is applying to projects still in the proposal stage, State Highway 161. The market valuation study is underway. The results will allow the authority to decide whether to accept the project.

Publications
Report. Highway Public-Private Partnerships: More Rigorous Up-front Analysis Could Better Secure Potential Benefits and Protect the Public Interest. GAO-08-44, February 8, 2008, http://www.gao.gov/cgi-bin/getrpt?GAO-08-44 Highlights – http://www.gao.gov/highlights/d0844high.pdf

Book. Prison Profiteers: Who Makes Money form Mass Incarceration, edited by Tara Herivel and Paul Wright. The New Press, 2008. Prison Profiteers brings together a formidable array of lawyers, prisoners, journalists and advocates to provide a unique look at who, exactly, is benefiting form mass imprisonment.

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Privatization Bulletin is a project of Essential Information, 1530 P Street, NW, Washington, DC 20005. Essential Information is a non-profit, tax-exempt organization involved in a variety of projects to encourage citizens to become active and engaged in their communities. To contact the Privatization Bulletin, email <[email protected]>

Headlines

1. Proposal in Texas for a public-private toll road system raises an outcry
2. 9th Circuit: No sovereign immunity for DA contractors
3. Hundreds attend meeting on NJ’s Corzine toll plan; Demo at statehouse
4. NJ tolls plan is dead unless revised, Corzine is notified by opponents
5. CA toll road agency appeals coastal commission decision
6. Drink the kool-aid: DOT holds PPP summit
7. Chicago’s Daley looks to oursource parking meters
8. Chicago Mayor Daley’s plan to privatize Midway Airport is gaining altitude
9. $3B debt for roads, transit may cut PA turnpike lease price
10. RI: Prison counseling may go private
11. Va. sues Texas collection agency over child support payments
12. State officials, competing firms spar over Texas’ specialty license plate business
13. N.C. schools rethink private owners

News Summaries

1. Proposal in Texas for a public-private toll road system raises an outcry
Leon Little’s farm here near Corpus Christi would not be seized for Texas’s proposed $184-billion-plus superhighway project for 5 or 10 years, if ever. But Mr. Little was alarmed enough to show up Wednesday night with hundreds of his South Texas coastal neighbors to do what the Texas Department of Transportation has been urging: “Go ahead, don’t hold back.” Don’t worry. Texans have gotten the message, swamping hearings and town meetings across the state to grill and often excoriate agency officials about a colossal traffic makeover known as the Trans-Texas Corridor, a public-private partnership unrivaled in the state’s — or probably any state’s — history, that would stretch well into the century and, if completed in full, end up costing around $200 billion, according to an article in The New York Times.

2. 9th Circuit: No sovereign immunity for DA contractors
Private companies that run diversion programs administered by dozens of California district attorneys are now open to legal attack, reports Law.com. A 9th U.S. Circuit Court of Appeals panel ruled Wednesday that state sovereign immunity does not extend to American Corrective Counseling Services, a private contractor hired by the Santa Clara County DA’s office to go after individuals who passed bad checks. Deepak Gupta, an attorney with the Washington, D.C.-based Public Citizen Litigation Group who argued the plaintiff’s case, said the opinion is especially important in an age of increased privatization of governmental functions. "What we got in this case is a very scholarly, thoughtful treatment of this issue," Gupta said, "not just with check diversion, but as it relates to all private corporations that try to shield themselves in sovereign immunity." Under state law, check bouncers can avoid prosecution by paying the money back and attending a class, which is administered by companies like ACCS. The company faces a proposed class action for violations of the federal Fair Debt Collection Practices Act, among other statutes. The plaintiff, Elena del Campo, alleges ACCS sent letters threatening her with prosecution when she didn’t pay the full amount demanded by the company. Northern District Judge James Ware ruled that ACCS could not use sovereign immunity to toss the suit.

3. Hundreds attend meeting on Corzine toll plan: Demo at statehouse
NJ Gov. Jon S. Corzine continued his efforts to promote his plan to boost tolls on some of the nation’s busiest highways, drawing a mixed reception from a crowd of more than 500 people in Mercer County on Saturday, reports Newday. Several people questioned the governor on whether he had made enough budget cuts and whether the sharp toll increases would flood local roads with truck traffic. Meanwhile, others said they understood that something needed to be done to repair the state’s chronically troubled finances. Corzine wants to use the toll money to pay off at least half of $32 billion in state debt and fund transportation projects for 75 years. Meanwhile, the NJ Community blog reports on a demonstration at the statehouse against the toll plan: "Pigs flew over the Statehouse Friday. Rubber-balloon pigs, that is. They were pink and wore smiles. More than 700 chanting, placard-waving demonstrators — taking their cue from a line in Gov. Corzine’s State of the State speech — rallied in front of the Statehouse to protest Corzine’s 75- or 99-year plan to increase road tolls to halve the state debt and bankroll transportation projects.At one point, Katherine Koridek — age 11 — of Sterling was picked up over the podium, where the crowd roared that her grandchildren and great-grandchildren could be paying for Corzine’s plan. The governor had said “pigs will fly over the Statehouse” before spending cuts and tax increases rescue the state’s financial situation.""

4. NJ tolls plan is dead unless revised, Corzine is notified by opponents
NJ Gov. Jon S. Corzine’s plan to sharply raise tolls is all but dead, according to influential Democrats and every Republican state legislator, who have warned that he has to modify his plan substantially if he expects to win their support, reports The New York Times. Mr. Corzine’s plan to raise up to $38 billion in bonds by increasing tolls 50 percent every four years from 2010 to 2022 had been criticized by various Republicans since it was unveiled last month, but on Thursday all 49 Republican state legislators declared their opposition. More jarring to Mr. Corzine was the defection on Thursday of three notable Democrats, including his former colleague in the Unites States Senate, Frank R. Lautenberg, and State Senator John H. Adler of Camden County, the chairman of the Judiciary Committee.

5. CA toll road agency appeals coastal commission decision
Toll road officials have filed an appeal over the California Coastal Commission’s rejection of a proposed toll road that would cut through a popular beachfront state park in Orange County. The appeal was filed Friday with the U.S. Department of Commerce. The Transportation Corridor Agencies says the commerce department has the authority to override the commission’s conclusion that the road would violate environmental laws which regulate development along the state’s coastline. The commission voted 8-2 on Wednesday to side with environmentalists, surfers and others who said the extension would have destroyed a large area of environmentally sensitive habitat and wetland, reports the San Jose Mercury News.

6. Drink the kool-aid: DOT holds PPP summit
Land Line magazine reports on the recent U.S. Department of Transportation summit on public-private partnerships or PPPs. "U.S. Transportation Secretary Mary Peters was scheduled as the keynote speaker but another DOT representative spoke in her place. Peters is among those who are heavily promoting private investment in U.S. infrastructure. “These tend to be cheerleading sessions,” Mary Joyce of Owner-Operator Independent Drivers Association told Land Line. “It’s a big cheering session for PPPs, tolling and privatization. They try to get state officials to attend and they try to get them to drink the Kool-Aid and tell them their solution to transportation problems is tolling, congestion pricing, and public-private partnerships.”"

7. Daley looks to oursource parking meters
Motorists would pay more to park at Chicago’s 36,161 metered spaces — and even higher prices during peak periods in congested areas — in exchange for more cashless payment and pay-by-phone options, under a privatization plan advanced Friday, reports the Chicago Sun Times. Buoyed by the $2.4 billion gravy train of revenue generated by privatizing the Chicago Skyway and downtown parking garages and the prospect of an even bigger windfall at Midway Airport, Mayor Daley on Friday moved to unload yet another city asset: Chicago parking meters.

8. Chicago Mayor Daley’s plan to privatize Midway Airport is gaining altitude
Airlines operating at Midway say an agreement is near that would allow the city to seek a private operator for the South Side airport, a deal expected to raise up to $3 billion for Chicago’s underfunded public pension plans and long-term infrastructure needs, reports Chicago Business. Under the federal law that allows Midway to be privatized, five of the seven airlines operating there must approve the deal’s terms before it can be put out for bid. Southwest Airlines Co. and Delta Air Lines Inc. have tentatively approved it, while officials with AirTran Holdings Inc., ATA Airlines Inc., Frontier Airlines Holdings Inc. and Northwest Airlines Corp. all say a deal is near. A Continental Airlines Inc. spokeswoman says the "process is still ongoing."

9. $3B debt for roads, transit may cut PA turnpike lease price
The Pennsylvania Turnpike Commission’s mounting debt will lower the price a private company is willing to pay for a long-term lease of America’s first superhighway, a turnpike legal adviser said, reports the Pittsburgh Tribune-Review. The turnpike’s projected $3 billion debt "comes right off the top" of the probable lease price, said Alan Wohlstetter, an attorney with Cozen O’Connor, a Philadelphia law firm hired by the turnpike.

10. RI: Prison counseling may go private
Last November Roberta Richmond, assistant director of rehabilitative services at the state prison, met with 33 prison counselors to deliver what she knew would be grim news. Richmond told the counselors, a third of whom have 20 years or more of service, that the Corrections Department was considering giving their jobs to an outside agency to save money. Incredulous, the counselors responded with “shock, disbelief” and an understandable attitude of “Why us?” says Richmond. But three months later, the counselors aren’t much closer to losing their jobs and the “privatization” plan — one of two major departmental strategies for helping the state shrink its looming deficit — is shrouded in uncertainty, prison administrators concede, according to an article in The Providence Journal.

11. Va. sues Texas collection agency over child support payments
The Virginian-Pilot reports that Virginia is suing a private child-support collection agency based in Texas for interfering with the state’s collection efforts. Gov. Timothy M. Kaine and Attorney General Bob McDonnell announced the lawsuit on Friday. In a news release, the state officials said the organization Supportkids Inc. sends wage-withholding notices to employers of parents who owe child support payments, and directs the employer to send payments directly to the company’s office in Austin, Texas, rather than to Virginia’s Division of Child Support Enforcement.

12. State officials, competing firms spar over Texas’ specialty license plate business
Privatizing the Texas’ specialty license plate business was supposed to be an easy sell – a speedy way to bring in tens of millions of dollars in new revenue.
Instead, it’s been 1BGMESS, reports the Dallas Morning News.

13. N.C. schools rethink private owners
McClatchy reports that North Carolina’s Charlotte-Mecklenburg school board is expected to pull the plug Tuesday on plans to let a developer become the landlord at four schools. Administrators conceded this week that the public-private partnership, which was supposed to save money, would end up costing more. "We deliberated the value of doing this just to show how it would work so we could learn something," Associate Superintendent Guy Chamberlain said. "But in the end, we decided the cost to the taxpayers had to prevail."

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Privatization Bulletin is a project of Essential Information, 1530 P Street, NW, Washington, DC 20005. Essential Information is a non-profit, tax-exempt organization involved in a variety of projects to encourage citizens to become active and engaged in their communities. To contact the Privatization Bulletin, email <[email protected]>

Headlines

1. The FBI deputizes business
2. Calif toll road voted down
3. NJ Assembly GOP rejects Corzine toll plan
4. UT: Panel OKs bill on privatizing some services
5. Cleveland can’t replace police at Hopkins airport with private security, judge rules
6. Group criticizes Akron’s sewage privatization plan

News Summaries

1. The FBI deputizes business
The Progressive magazine has an article examining the growing phenomena of government outsourcing to private security companies: "Today, more than 23,000 representatives of private industry are working quietly with the FBI and the Department of Homeland Security. The members of this rapidly growing group, called InfraGard, receive secret warnings of terrorist threats before the public does—and, at least on one occasion, before elected officials. In return, they provide information to the government, which alarms the ACLU. But there may be more to it than that. One business executive, who showed me his InfraGard card, told me they have permission to “shoot to kill” in the event of martial law."

2. Calif toll road voted down
After hearing testimony and deliberating for more than 12 hours, the California Coastal Commission yesterday voted 8-2 to deny a proposed toll road that would cut across a habitat reserve in Orange County and San Onofre State Beach next to Camp Pendleton. The panel decided that certain aspects of the project failed to meet California’s coastal regulations. Their vote prohibited transportation officials from creating the first tollway to run through a state par, the San Diego Union-Tribune reported.

3. NJ Assembly GOP rejects Corzine toll plan
Newsday reports that a leading Democrat and all 49 legislative Republicans on Thursday promised to oppose Gov. Jon S. Corzine’s plan to significantly increase highway tolls to pay state debt and fund transportation. Sen. John Adler, D-Camden, vowed to vote against Corzine’s plan. "Increasing highway tolls would inflict yet another financial hardship on our hardworking taxpayers, and I oppose it," Adler said. "We should not even consider asking for one more penny from those taxpayers until Trenton assumes its share of sacrifice and makes serious cuts in government spending."

4. UT: Panel OKs bill on privatizing some services
A bill to make sure state agencies aren’t doing a job private business should do passed out of committee Thursday, reports the Desert Morning News. HB75 would force most state agencies to create an inventory of commercial activities the government is providing. The bill’s sponsor, Rep. Craig Frank, R-Pleasant Grove, also wants to expand both the authority and size of the current government privatization policy board to "review whether or not certain services performed by existing state agencies could be privatized to provide the same types and quality of services that would result in cost savings." The bill is one of three aimed at privatizing some government activities.

5. Cleveland can’t replace police at Hopkins airport with private security, judge rules
Mayor Frank Jackson has lost a battle with the city’s police unions over replacing 45 officers at Cleveland Hopkins International Airport with a private security force, reports the Cleveland Plain Dealer. Cuyahoga County Common Pleas Judge Nancy A. Fuerst ruled Wednesday that the city’s plan conflicts with state law because the security officers would be given arrest powers. In a 12-page ruling, Fuerst stated that state law does not allow the city to give police authority to a private company.

6. Group criticizes Akron’s sewage privatization plan
One national wastewater organization Thursday voiced concern about Akron’s proposal to sell off its sewage system. The National Association of Clean Water Agencies in Washington, D.C., is firmly opposed to privatizing public utilities, said Susan Bruninga, director of public and legislative affairs. The fear is that the prices paid by consumers for water or sewer will soar because private companies must make enough money to operate the utility plus satisfy their shareholders, Bruninga said, according to the Akron Beacon Journal.

Reports / Resources
GAO Report: Highway Public-Private Partnerships: More Rigorous Up-front Analysis Could Better Secure Potential Benefits and Protect the Public Interest. GAO-08-44, February 8, 2008, http://www.gao.gov/cgi-bin/getrpt?GAO-08-44 Highlights – http://www.gao.gov/highlights/d0844high.pdf

GotGov? Website: AFSCME Council 5’s GotGov? website provides information and resources for fighting privatization. Special sections for transportation, corrections and care givers including anti-privatization advertisements.

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Essential Information is a non-profit, tax-exempt organization involved in a variety of projects to encourage citizens to become active and engaged in their communities. To contact the Privatization Bulletin, email <[email protected]>

Headlines

1. TxDOT $1 billion error caused cash crunch: lawmakers suspicious
2. Capitol Hill P3 critics charge ‘subterfuge,’ ‘balkanization’ of transportation system
3. CA: State panel set to hold crucial vote on project
4. GOP to rally against N.J. toll plan
5. CO: Private prisons demand 5 percent rate increase
6. IN: Costs lead agency to scrap plan to privatize mental hospitals

News Summaries

1. TxDOT $1 billion error caused cash crunch: lawmakers suspicioius
The Texas Department of Transportation made a billion-dollar error, officials of the agency admitted Tuesday under stern questioning from legislators, a mistake they said contributed significantly to TxDOT’s sudden cash crunch, according to the Austin American-Statesman. TxDOT officials say agency planners inadvertently counted $1.1 billion of revenue twice, a mistake that caused them to commit to more road projects than the agency could handle. But lawmakers, always skeptical, were often openly hostile during a lengthy Senate committee hearing that amounted to a thorough wood-shedding of TxDOT. They let department officials know that they remain suspicious about the legitimacy of the fiscal crisis. Texas Transportation Commission members, said state Sen. Kirk Watson, D-Austin, "have an agenda. And that’s to privatize the second-largest (highway) system in the world. And you are hell-bent-for-leather to do that."

2. Capitol Hill P3 critics charge ‘subterfuge,’ ‘balkanization’ of transportation system
Unbridled state and local government use of private financing to improve the nation’s highway network will result in a national transportation system of varying quality from region to region and will not solve mobility problems, a House Transportation and Infrastructure Committee aide warned yesterday, reports The Bond Buyer (subscription). Unchecked use of public-private partnerships "fails to heed the lessons of the past and will lead to future balkanization of our transportation system," Art Chan, the aide, told those attending a P3 summit here sponsored by City & Financial, a British-based conference and publishing company. Chan’s comments were presented on behalf of committee chairman Rep. James L. Oberstar, D-Minn., who was originally scheduled to deliver the speech, but withdrew after coming down with a case of laryngitis. The committee will play a key role in a reauthorizing transportation policy and funding law that expires next year on Sept. 30, the end of fiscal 2009. "Advocating privatization, tolling and rationing as the only solutions to our nation’s transportation crisis … fails to recognize the magnitude of the crisis we are facing and does not acknowledge the difficult choices required to remedy the situation," Chan said. "The effort of the [Bush] administration and its supporters to sell off or toll existing infrastructure undermine the policies that have led to the world’s premier intermodal surface transportation system." Chan argued that the federal government must make sure that the transportation network functions as a unified system and allows movement efficiently around the nation.

3. CA: State panel set to hold crucial vote on project
It’s decision time for one of the most heated environmental battles in Southern California history. The San Diego Union-Tribune reports that on Tuesday, the state Coastal Commission will vote on a decade-long proposal to build an $875 million toll road between between Orange and San Diego counties. The freeway would cross the Donna O’Neill habitat reserve and San Onofre State Beach, which were both set aside to offset the environmental damage of previous development. These sites are home to numerous endangered species – including birds and amphibians – and the San Onofre park contains a beloved campground and world-famous surfing spots. Business leaders, chamber of commerce officials and some motorists fed up with gridlock can hardly wait for the concrete to start pouring.

4. GOP to rally against N.J. toll plan
New Jersey Republicans on Monday vowed to try to lobby businesses against Democratic Gov. Jon S. Corzine’s plan to increase highway tolls to pay state debt and fund transportation, according to the AP. Republicans Anne Estabrook, a former Chamber chairwoman, and former Bogota mayor Steve Lonegan plan to launch a joint effort to build a new coalition of businesses opposed to the plan. "It will hurt working families and drive businesses out of state," said Estabrook, who is running for the state’s Republican U.S. Senate nomination this year. Corzine wants to pay off at least half of the state’s $32 billion in debt and fund transportation projects.

5. CO: Private prisons demand 5 percent rate increase
A private prison company is threatening to move all Colorado inmates out of one of its facilities if it doesn’t get an increase in what the state pays to house them, says The Pueblo Chieftain. Corrections Corporation of America, which operates four of the state’s five private prisons, including three in Southern Colorado, is demanding that the Colorado Legislature give it a 5 percent hike in the per diem it receives to house about 4,000 state inmates, Rep. Bernie Buescher, D-Grand Junction, said Tuesday. Rep. Buffie McFadyen, D-Pueblo West and a longtime critic of private prisons, said the state should call CCA’s bluff and give them no increase.

6. IN: Costs lead agency to scrap plan to privatize mental hospitals
The Indiana Family and Social Services Administration has dropped a plan to privatize three state hospitals, throwing new uncertainty into its future care for chronically mentally ill patients, reports The Indianapolis Star. Less than five months after FSSA Secretary Mitch Roob told a state panel that a federal audit showed Indiana needed a new way of delivering care to chronically mentally ill patients, he has ended negotiations with a group vying to take over Richmond State Hospital. The change in strategy was driven by a variety of reasons including cost concerns. Roob, in a telephone interview, said he decided to end the Richmond talks because Gov. Mitch Daniels asked state agencies in December to cut spending after a lower tax revenue forecast. Turning over the 300-patient Richmond State Hospital to a local group would cost the state $3 million to $5 million. "We were not comfortable spending that money when times might get tough," Roob said

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Essential Information is a non-profit, tax exempt organization. We are involved in a variety of projects to encourage citizens to become active and engaged in their communities. We provide provocative information to the public on important topics neglected by the mass media and policy makers. To contact the Privatization Bulletin, email [email protected].

Headlines

1. Is Texas DOT citing phony financial crisis to push private toll roads?
2. Palo Alto branding rights for city land could go to highest bidder
3. Infrastructure: the next asset bubble
4. Report faults security at U.S. monuments
5. Az. budget deficit stirs issue of privatization
6. Flood bill creates insurance oversight
7. Utah privatization bills stall after questions arise
8. Ky. megaprojects will require tolls
9. PA: Public-private group is latest ‘last hope’ for Mon-Fay toll road

News Summaries

1. Is Texas DOT citing phony financial crisis to push private toll roads?
Just how broke is TxDOT really? Lawmakers will be asking that Tuesday during a joint session of the Senate finance and transportation committees, reports the Dallas Morning News. For most of last summer and fall, the Texas Department of Transportation issued warnings that it was running out of money for adding lanes and building new highways. In December, it announced it would cut back spending on new highways and instead focus on repairing and, when needed, rebuilding existing roads. So far, though, that argument hasn’t set well with lawmakers, some of whom fear TxDOT’s warnings are designed at least in part to pressure them to support the agency’s push for private toll roads.

2. Palo Alto branding rights for city land could go to highest bidder
The Palo Alto City Council tonight will ponder changes to a city law that could give naming rights for city land to the highest donor. The city has not changed its land naming policy since 2004 and currently uses a process that leaves responsibility and final approval with the city council. In light of the cost for future capital improvement and infrastructure projects, however, city staff is again asking the council to explore the possibility of "putting a private or corporate name on a city facility in exchange for a significant financial contribution," according to the council staff report. Mayor Larry Klein said universities, museums and hospitals all use similar funding options and that it would lessen the fiscal burden on he city’s tax payers. The council would, however, have to hold corporate donors to high standards, he said. "I’ve thought about it, and I don’t have any problem with it," Klein said. "I think it’s where the world is going. If someone wants to put up ten or twenty million dollars, I think that’s a fair trade for us," he told the Palo Alto Daily News.

3. Infrastructure: the next asset bubble
Condé Nast Portfolio reports that the once-sleepy backwater of infrastructure investment—the buying up of public roadways, utilities, airports, hospitals, and even prisons—has become fertile ground for Wall Street titans. The problem is that the chief benefit of the investment—a safe long-term inflation-adjusted return—becomes harder to reach as more investors pile into the market seeking it. Experts worry that prices have already been driven too high for many of the best assets. As evidence, they note that more deals are being loaded up leveraged-buyout levels of debt. At the same time, yield-hungry investors are increasingly willing to build or buy infrastructure in riskier corners of the world. It’s an opportunity based on hard times, as governments around the world will have difficulty paying for what is estimated to be $53 trillion in needed infrastructure investment over the next 25 years. This leaves the door open for private investors to offer a helping hand—for a price.

4. Report faults security at U.S. monuments
The AP reports that inadequate security has left national icons such as the Washington Monument and the Statue of Liberty vulnerable, according to a government report on the U.S. Park Police released Monday. Investigators found that a grate blocking access to stairs under the Washington Monument was left open and unattended for about 20 minutes. In another case, a visitor left a suitcase against the monument’s wall for five minutes, and nobody appeared to notice.The report also includes a photograph an officer who appears to be sleeping in what the report says is a patrol vehicle at the Jefferson Memorial. The Park Police often rely on private security companies, but there is little coordination between the private guards and the officers, the report said. Officers told the investigators that many of the guards don’t speak English.

5. Az. budget deficit stirs issue of privatization
Privatization of government operations and services has surfaced in the debate over Arizona’s estimated $1.3 billion budget deficit, reports The Business Journal of Phoenix. That could mean good news or bad news for the private contractors in charge of prison operations, economic development and state support services. One legislative budget plan would cut into private prison contracts, funding for outsourced international trade offices, school construction, and health, technology and economic programs that rely on private contractors. The deficit, however, also has some people talking about increasing privatization efforts, saying the private sector can perform functions cheaper and more efficiently than the government.

6. Flood bill creates insurance oversight
On the heels of a federal report that found an inherent conflict of interest in having private insurance companies determine how much the government should pay on flood claims, Louisiana U.S. Sen. Mary Landrieu plans to introduce legislation creating an ombudsman to strengthen financial oversight of the National Flood Insurance Program, according to the AP. Flood policies are issued by the federal government, but private companies sell them alongside their homeowners products and determine the flood claims for the government after disaster strikes. Consumer advocates, plaintiffs attorneys and individual homeowners began to question the arrangement after Hurricane Katrina, when private insurance companies had the power to determine whether damage was caused by wind, which they pay for, or water, which the government covers.

7. Utah privatization bills stall after questions arise
A move to privatize some government activities stalled Tuesday, after one of three bills ran into a barrage of questions and clarification issues in a committee hearing, reports the Deseret Morning News. Rep. Craig Frank, R-Pleasant Grove, wants to expand both the authority and size of the current privatization policy board to "review whether or not certain services performed by existing state agencies could be privatized to provide the same types and quality of services that would result in cost savings." The bill would also require state agencies to create an inventory of all commercial activities the government is providing. Members of the House Government Operations standing committee raised questions on which agencies would be included, whether or not the public education system was exempt from the process and how the board seats were disbursed between the public and private industry.

8. Ky. megaprojects will require tolls
The Louisville Courier-Journal reports that Kentucky House Speaker Jody Richards said that tolls must be part of how the state funds the Ohio River Bridges Project and other new "mega" road and bridge ventures. His comments echoed remarks made last week by Senate President David Williams and came as the Kentucky Transportation Cabinet released a study describing eight different toll scenarios for the $4.1 billion Louisville project. Richards said he hadn’t reviewed the bridge toll study, but he favors a "public-public partnership" that would result in tolls. He noted that part of the revenue would be paid by residents of other states, and that Kentucky imposed tolls from 1971 through 2006 on some of its parkways.

9. Public-private group is latest ‘last hope’ for Mon-Fay toll road
When the Mon-Fayette Expressway was conceived more than 40 years ago, the idea of a high-speed highway connecting Pittsburgh and Morgantown, W.Va., seemed like an urgent transportation and economic development need for southwestern Pennsylvania. Since its 1973 groundbreaking, however, the toll road, now open from Jefferson Hills to Morgantown, has yet to make it through its most expensive and final phase — a Y-shaped 24-mile extension from Route 51 near Jefferson Hills to Pittsburgh and Monroeville. Now, a group of business and political leaders is looking to jump-start the project through a public-private partnership that they hope could raise half of the estimated $3.6 billion cost, reports the Pittsburgh Post-Gazette.

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Essential Information is a non-profit, tax exempt organization. We are involved in a variety of projects to encourage citizens to become active and engaged in their communities. We provide provocative information to the public on important topics neglected by the mass media and policy makers. To contact the Privatization Bulletin, contact [email protected].