May 26, 2015

Privatization Has Been a Colossal Flop. . . This is a classic mismatch of wonderful theory and disastrous practice. The privatization theory is compelling. Government is inherently bloated, lazy, wasteful, dumb and inefficient because it does not have to face the discipline of the marketplace. Put public services up for private bidding and you will get the lower costs and greater efficiency that comes with free market competition. But privatization practice is often a disaster. An inefficient government monopoly is replaced by an even more inefficient private monopoly that is more expensive, wasteful and lacking in accountability or responsibility for serving the public good. The selection of private contractors is often rife with the corruption of political sweetheart deals. The profit motive consistently trumps public interest And shareholders and executives benefit at public expense, while public services deteriorate. Let’s do a quick review of the scorecard. Huffington Post

IL: Chicago’s $62 million blunder. Ending a costly court fight that City Hall blundered into, Mayor Rahm Emanuel’s administration has paid more than $62 million to settle a dispute with the private operators of four city-owned parking garages downtown, records show. The payment last month ended City Hall’s long and unsuccessful legal fight against claims from investors in the four privately operated garages under Millennium Park and Grant Park. . . Under the 2006 privatization deal, the Daley administration received $563 million to lease the parking garages for 99 years. As part of the deal, the city wasn’t supposed to allow any new competitors in a vast area surrounding the garages. But less than three years after the Chicago City Council approved the deal, the Daley administration allowed the Aqua garage to open to the public just a block from the nearest of the privatized lots. Arguing that that violated their deal, the operators of the garages filed a claim against the city, asking for at least $200 million.   Chicago Sun-Times

CO: Editorial: More tolls are in metro Denver’s future. Without additional public money for highways or infrastructure improvements or an appetite to raise the gas tax, costs to build highways will be borne partly by private entities like Plenary Roads that use tolling to recoup their investment. The Denver Post

NY: NY rejects all applications for new charter schools. The state Education Department has rejected all 15 applications for new charter schools, including 12 in New York City, claiming they failed to meet academic standards…. The decision, which was made in the past week, comes at a time when Gov. Andrew Cuomo and the Republican-controlled state Senate are pushing to raise the cap for charters allowed in the state from 460 to 560. But Mayor Bill de Blasio and the teachers unions oppose charter school expansion, as does the Democrat-run state Assembly. Under the current formula, the city is authorized to open only 25 more charters — publicly funded, privately managed schools exempt from union rules. New York Post

NC: Protesters continue fight against I-77 toll lanes. Protesters said their 2-year fight to try and stop the Interstate 77 toll lane project isn’t over, and are heading to Raleigh Tuesday. . . .”Best case scenario would be (Gov. Pat) McCrory would listen to 1.5 million people in this area who say this is the time to tap the brake on these tolls,” Suter said. “I have teenage boys right now and they’ll be almost 70 before these tolls go away,” Vallee Bubak said. . . . But last week the state closed the financial deal with a subsidiary of Spanish-owned Cintra. . . . Four cities and two counties approved resolutions asking the state to back out of the $647-million deal over concerns about the contract. Suter argues the issue may soon impact people beyond the metro area. Construction crews will begin working on the interstate this summer. WSOC Charlotte

NJ: Liberty State Park supporters protest threat of privatization of park at picnic. Supporters of Liberty State Park gathered earlier this month for a picnic protest against the looming possibility of privatization within the waterfront park. More than 100 people attended the event, organized by Friends of Liberty State Park. . . .In February, Gov. Chris Christie signed the Hackensack Meadowlands Agency Consolidation Act, merging the New Jersey Meadowlands Commission and New Jersey Sports and Exposition Authority. The new agency, the Meadowlands Regional Commission, was initially given control of Liberty State Park. A set of amendments later passed that would require the Department of Environmental Protection to approve any development plans for the park and a public hearing would have to be held at the park.

IA: Editorial: Contact Obama administration to stop plan to privatize Medicaid. Medicaid provides health insurance to about 500,000 Iowans. For decades, the government program has been operated by the state, which is not beholden to shareholders. Spending has been held down by reducing fraud, paying lower reimbursements to providers and giving seniors alternatives to expensive nursing homes. On average, the annual cost to insure an Iowan with Medicaid is significantly less than insuring an individual with private coverage. Yet Gov. Terry Branstad is seeking to hand over administration of the huge health insurance program to for-profit managed care companies. With $4.2 billion on the line, businesses are salivating at the idea of landing one of these contracts with the state. Meanwhile, none of this makes sense to Iowans. Privatizing Medicaid will increase administrative costs as much as 300 percent.

WI: Letter to the editor: Plan to privatize Milwaukee schools is theft of public trust. Dear Editor: K12 Inc., a virtual education corporation receiving public funds, pays its CEO millions despite the poor performance of its students. Wisconsin’s Sen. Alberta Darling and Rep. Dale Kooyenga, authors of the plan to privatize Milwaukee Public Schools, must approve this theft of the public trust. They believe in education-for-profit.