In the Bid to Privatize PA's Lottery, One Is the Loneliest Number

By Stephen Herzenberg, Third and State

Three Dog Night: One

One is the loneliest number that you'll ever do …

Although I’m dating myself, some of you may recognize the Harry Nilsson song made famous by Three Dog Night. We recommend that Governor Tom Corbett download it to his iPod as he contemplates whether to accept a solitary bid from Camelot Global Services to take over the operation of the Pennsylvania Lottery. Whether privatizing state services or getting a new roof for your house, having a single lonely bidder is a red flag for a fleecing — for overpaying the contractor.

In its bid, Camelot promises 20 to 30 years of lottery profits that barely increase at the rate of inflation — even with the addition of new lottery games such as Keno and online gaming. The deal could produce big-time profits for Camelot with performance no better than the public system could produce. If the company maxes out its incentive-based compensation over the initial 20-year contract, it could receive $1.15 billion in today’s dollars; more when you count annual management fees.

A good deal for Camelot, but not for the Pennsylvania seniors who benefit from lottery proceeds, as the Keystone Research Center finds in a new report. The impact on seniors is critical since the lottery generates $1 billion a year for services that benefit area senior centers, low-cost prescription drugs, transportation for seniors, and property tax and rent rebates.

Mayor Nutter forgot the meaning of "public" in public ed

It probably wouldn’t surprise you to hear a Pennsylvania politician questioning the very definition and premise of public education. It may surprise you that Philadelphia’s leading Democrat is on record saying public vs. private ought to be meaningless when it comes to education.

At a press conference Thursday, Mayor Nutter said parents deserve school choice and that public, private, religious designations don’t matter. In his talk, the Mayor went on to say:

"I’m not getting caught up in all this. At my level, these are esoteric debates that ultimately don't mean anything to these young people sitting here in this room.”

Children care about their teachers, recess, lunch and whether they’re in a safe learning environment.

“That’s what this is all about,” he cried out.

While the mayor certainly hasn’t been hanging around the high schoolers I know, he may be right that my nine-year-old isn’t really paying attention to such discussions.

Does that mean we shouldn’t either?

Ask a parent who can’t dream of paying a $26,100 tuition bill from Penn Charter whether a quality free public elementary school in their neighborhood is a matter of meaningless “esoteric debate.”

Philadelphia public schools are 85% students of color and 80% economically disadvantaged. We have 20,000 children classified as special need and almost 12,000 English language learners. Is it “meaningless” that private and religious institutions hold the right to discriminate against and exclude those whom they choose not to serve? There’s no mandate for private schools to provide language services for new immigrants, serve special needs students, or take recently adjudicated youth. They have the right to promote religious scripture and denounce same sex orientation. They have the right to deny collective bargaining and employ non-certified teachers.

Would the Mayor consider it a matter of meaningless “esoteric debate” to take some lessons from Philadelphia’s failed history with privateeers like Edison Schools Inc. which exploited public funds for private gain with miserable results? Is it meaningless to take a look at our neighbors in Chester City and consider the fractured relationship they have with a charter school run by a for-profit company and a bankrupt school district?

I’m sure our governor would love for us to call concerns about transparency with voucher programs like the Educational Improvement Tax Credit (EITC) “meaningless” and “esoteric.” A recent New York Times investigation found that EITC programs nationwide permit forfeited tax dollars to go toward private and religious institutions that might otherwise be blocked from receiving public monies.

No matter to Pennsylvania. Since 2001, PA has diverted close to $400 million to organizations that give out the scholarships. The state's program was cited extensively in the Times investigation for questionable practices. And Harrisburg just approved a new $50 million per year tax credit targeted toward students who live in areas with low-performing schools.

Notably, the Times cited the architects of the program who crowed about the intricate and ingenious ways they were able to evade scrutiny. Perhaps if fewer people treated this as an “esoteric” subject, maybe there would be more public accountability.

We have more than a decade of money and broken promises poured into the idea that there’s some magic solution to neglected public schools. Philadelphia has been ground zero for every manner of experimentation from reformers touting the miracles of the private sector. When the Mayor calls the “public” in public education a mere label, he dumbs down important conversations about what lessons we’ve gained from using public funds for too many failed private enterprises.

He plays into widespread disinvestment in public education and the resulting gross inequities. He gives cover to a Governor whose billion dollar slashing of public education funding and promotion of private and charter enterprises has resulted in school districts across the state starved to the point of dysfunction.

Thanks to such efforts a Philadelphia public school classroom is $78,000 poorer than a classroom in a surrounding suburb. Three-quarters of our elementary schools lack a certified librarian. We’ve got one nurse for every 1500 students and a mindset that only guarantees nursing care for the “medically fragile.” Is it any surprise that the choice debate is here and not in Lower Merion which generously funds its schools?

The Mayor’s right that we don’t need meaningless esoteric debates. What parents want is a free, safe, well resourced neighborhood public school for our kids and we want to know why politicians can move heaven and hell to make everything BUT that a priority.

We want a smart conversation about the things our public schools SHOULD provide to every child and what resources it will take to make that happen. We want our political leaders to know that a public school is a communal responsibility – not a matter of individual whims.

Most of all we need our Mayor to understand that - at his level - underfunded public schools serving high poverty, high needs children versus a failed history of exploitation and privatization is never a meaningless esoteric debate.

Council Can Give the SRC the Money to NOT Privatize the System

Helen and Dan have laid bare the SRC’s plan to kill public education and to use the Mayor’s AVI initiative to fund the murder to the tune of $94 million. I have nothing to add to their brilliant exposure of the crime scene. However I do want to point out that Council does not have to collaborate. In fact Council can help prevent the sell-off of the School District through a simple carrot and stick approach.

All it has to do is sequester the $94 million and hold it back until the community gets what it wants and deserves.

Here’s how Council can do that:

1) Amend the pending Operating Budget Bill to appropriate $94 million to the City’s Sinking Fund Commission, a traditional place for parking money intended to be used later for other purposes. Putting the $94 million there would mean the School District couldn’t get it until Council passed another ordinance approving its transfer later in the year.

2) Amend the Mayor’s AVI bill to shift the revenue targets so that the City is getting $94 million more (the money that would go to the Sinking Fund) and the School District $94 million less.

3) Work with labor and the community to come up with a plan that works to keep the School District public and thriving, and refuse to send the $94 million until the SRC goes along.

What if the SRC doesn’t meet our demands by the end of the next fiscal year and insists on going forward with its fun and games? Well, then the $94 million would merge back into the City’s General Fund to be allocated the following year either for other purposes or to enable tax rates to be reduced. Or it could be used next year to reduce the pain from the Governor's social services cuts.

That’s it. It’s not rocket science; it’s just about Council’s sincerity in opposing the privatization of the District. They can fight it if they want.

Let the Facts Get in the Way of a Good Story: Private School Bus Services in PA Cost More

A blog post by Stephen Herzenberg, originally published at Third and State.

The standard conservative narrative is that private delivery of services and goods trumps government delivery. In Harrisburg, for example, Governor Corbett’s Council on Privatization and Innovation often presents its goal as privatization, taking for granted that this will be more efficient and cost-effective.

In fact, the record on privatization shows that in many cases privatization fails to deliver promised savings and can undercut service quality. That’s part of why Cornell Professor Mildred Warner has found that local governments often bring work back in house.

PA Liquor Privatization Findings Too Good to Be True

A blog post by Stephen Herzenberg, originally published at Third and State.

The privatization of Pennsylvania's wine and spirits shops will not do much for state revenues but will usher in alcohol-related social problems.

Those were the key takeaways offered by researchers working with the Keystone Research Center at hearings of the Pennsylvania House Liquor Control Committee last week in Philadelphia.

University of Michigan researcher Roland Zullo, who has worked with Keystone on privatization issues, presented the results of his analysis of a pro-privatization study commissioned by Governor Tom Corbett's Budget Office. As Zullo's written testimony shows, the study, performed by Public Finance Management (PFM), was very open about its assignment: show how privatization will maintain annual wine and spirits revenue for the state, while maximizing upfront fees from privatizing.

As Roland shows, this is an impossible assignment. Consequently, PFM was forced to make implausible and incompatible assumptions. To maintain revenue neutrality, PFM assumed very high taxes on wine and spirits, a high annual fee from franchisees, and low price markups by private wholesalers and retailers.

These same assumptions, however, would make wine and spirits franchises a dud as a business opportunity - companies would make low profits or lose money, and they sure won't give the state a big upfront check for the right to lose money. As Roland said, "I can't square this circle."

NN Meets to Fight the Next Step in Privatizing Education: Vouchers

In the legislative term just ended, Governor Corbett and his right wing clones in the Legislature devastated public education funding. But they have new blows ready in their effort to destroy the future of Pennsylvania’s children. The next step planned is to divert some of the insufficient money that has been left for public education into private hands through vouchers. Neighborhood Networks will be meeting on Tuesday night to discuss the next intended blow and what we can do to ward it off. Susan Gobreski, Exec. Director of Education Voters PA will be with us. We hope you will be too.

The idea that problems with public education can be solved by giving poor parents a voucher to pay for their kids to go to quality private schools is a sham. The legislation that now embodies this idea is Senate Bill 1. If enacted, it would probably cost $1 billion per year, taken directly out of amounts that would otherwise be available to public schools. Yet, according to Education Voters, only 6,500 students would use the vouchers provided for in this bill, about 65% of whom already attend private schools. Low income students will not likely be among the new students getting assistance, since many of them would have to come up with additional money for tuition; the vouchers wouldn’t pay enough.

Furthermore, nothing guarantees that poor, educationally challenged, low income students would ever be admitted to the best schools whether they pay full tuition or not. These schools would retain total discretion to admit whomever they want.

Public Health Experts Advise Against Further Privatization of Alcohol Sales

A blog post from Stephen Herzenberg, originally published on Third and State.

Back in April, a group of public health experts put out a statement with little fanfare recommending against the further privatization of alcohol sales.

This recommendation is based on evidence that privatization would increase excessive alcohol consumption and related health and social problems. It was released in an April statement from the Task Force on Community Preventive Services, an independent, volunteer body of public health experts created in 1996 by the U.S. Department of Health and Human Services.

In Case You Missed It: Third and State Blog for Week of March 14

This week on Third and State, we blogged about the state budget, privatization, fruit salad (really?), and much more!

In case you missed it:

Hey Council! School news you need to know

There’s a lot happening over at the School District that every council member -and state legislator - ought to know. So if you haven't already, pick up the latest issue of the Public School Notebook for more information:

  1. First up, Renaissance Schools – yet another list of failing schools (this time there are 26 schools:14 identified Renaissance schools, 12 “alert” schools), yet another set of promises to parents and children skeptical about the District’s insistence that this time it will be different. Consider the families at Douglass Elementary which has had 7 principals in 7 years, or Dunbar Elementary which, if chosen a Renaissance school, will be on its third manager in 8 years. Or Stetson, which along with Dunbar, was the first wave of promised change through privatization. Stetson too is listed as a potential Renaissance school.

    What’s the problem with Renaissance? My main concern has been that the District is stuck on seeing transformation via management and contracts, rather than defining what substantive changes are going to happen in the life of a child. I’d like to know whether Renaissance schools are going to reduce class size, offer more literary specialists, provide home-school liaisons, improve school food and provide a full library and build science labs? Are they going to revamp discipline, provide real professional development, analyze and publish studies on their improvement, and invest in their teaching force rather than threaten them into compliance? A number of Renaissance Schools have significant English Language Learner populations. Are they going to provide a model bilingual program, diversify their hiring, create a multicultural curricula that engages students? Are they diversifying their curricula overall? Or is it really just a change of names at the top of the masthead, a “trust us, we’ll get some good folks in there with a track record” which is basically what parents have heard for a decade now.

    The Notebook has done an excellent job compiling a full summary of information on Renaissance. In addition, look for the latest issue of the Notebook which focuses exclusively on understanding school turnaround. Renaissance School meetings are happening all around the city. We need city and state leaders present to hear the frustration parents and communities are feeling and to bring more accountability to the District.

  2. School Choice: Research for Action has a new study out on the expansion of choice options in the district, which has cost the district hundreds of millions of dollars over the past decade – it’s been the District’s single most decisive change – yet has led to limited choice options for the majority of students seeking a way out of their neighborhood high schools.

    70 percent of District eighth graders participated in the application process to begin ninth grade in fall 2007. However when the dust settled, only 45% were enrolled at any District school to which they applied. In other words there are not enough “seats” in schools of choice for the number of students trying to choose. This means that in most cases high schools are selecting students rather than students choosing schools, robbing students and families of the agency that school choice is supposed to provide.

    That’s a pretty serious indictment that needs careful review and consideration. Since 2002, the District has nearly tripled the number of high school options, and through charters has created the second largest school district in the state. The investment of resources and personnel has been tremendous. Yet for high school, more than 50% of kids seeking out of their neighborhood school can’t find another seat. It’s also worth noting that as the investment has spread to create options, disinvestment in our neighborhood schools remains a problem. In Imagine 2014 it was hard to determine how much investment there was for the average comprehensive high school. There were counselors to be sure, which was a helpful boost, but how significantly was life going to be different for the average high school kid at say, Gratz or Bartram?

    RFA’s report issues a strong call for investment in neighborhood high schools as well as provides recommendations for improving the high school selection process. Worth the short 8-page read.

Karen Heller on free market "courage" for the public schools

For now, I am reserving opinions on Dr. Arlene Ackerman’s "Imagine 2014" Strategic Plan document as I reflect on some of the progress the schools have made over the past decade and the challenges that we still face. But one area I am not reserving opinion for is the tired analysis in Karen Heller’s latest commentary on the Philadelphia schools.

Heller talks about plans to "detonate" the "worst schools" and turn over new schools to organizations with "successful track records" like we haven’t heard that line before.

It’s a bold admission that, despite a $2.3 billion budget, what’s being done isn’t working, and outsiders might do a better job.

She dismisses the concerns of those who raise questions about such a plan like the young woman she quotes from the Philadelphia Student Union – a youth group, by the way, whose members have a high school graduation rate exceeding 90 percent.

She then quotes Mastery Charter Schools CEO Scott Gordon for this insight: "Competition works everywhere else as a business model, why not in education?"

Perhaps Heller needs a brief history lesson.

In 2002, the School District of Philadelphia was to all effects detonated in the biggest experiment in privatization in the country. Originally, Edison Schools Inc. was supposed to take over as manager of the entire School District of Philadelphia as a result of the state takeover of the public schools. Overwhelming public opposition and the fortuitous move (from a schools perspective at least) of then-Gov. Tom Ridge to the U.S. Dept. of Homeland Security resulted in Edison receiving management of only 20 schools in the district; an additional 25 schools went to a variety of for-profit, non-profit and community providers.

Also since 2002, the district’s charter school system has grown to effectively become the second largest school district in the Commonwealth.

So how’s it all turned out?

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