More than a third of all conventional pubic school districts in Georgia contract out one of the three major non-instructional services, according to survey data collected this summer by a the Mackinac Center for Public Policy, a Michigan-based research institute. The Mackinac Center survey of Georgia and four other states found that 38 percent of Georgia districts contract out for at least one of the “big three” non-instructional services: food, transportation and custodial services. … But Mackinac found a curious pattern in Georgia: Just three districts — 1.7 percent — contract out transportation (bus) services, and only four, or 2.2 percent, contract out for food services.
A Monday report from the Office of the State Auditor lists several findings related to overbilling and invoices lacking proper documentation in regard to a food service provider’s contract with San Juan College. … Litke said the review found that invoices provided by Sodexo were listed by category but did not provide details or supporting documentation. He said Sodexo now provides additional documentation with each monthly invoice. Litke said he found the more than $16,000 in charges that lacked documentation a little disconcerting. But Sodexo has provided the missing documentation to the college since the report was issued, he said. One of the items listed in the finding was $19,826 Sodexo billed the college in February 2014 for relocation costs for the company’s general manager to move from Wyoming to New Mexico. According to the report, Sodexo did not seek the required approval of the college before approving the request.
Abstract: In exchange for sizable tax exemptions, not-for-profit hospitals must engage in activities that meet the Internal Revenue Service’s community benefit standard. The provision of charity care—free care to those unable to pay—can help meet that standard. Bad debt, the other form of uncompensated care, cannot be used to meet the standard, although Medicaid shortfalls can. However, the ACA lacks guidelines for providing charity care, and federal law sets no minimum requirements for community benefit activities. Using data from California, we examined whether the levels of charity and uncompensated care provided differed across general acute care hospitals by profit status and other characteristics during 2011–13. The mean proportion of total operating expenses spent on charity care differed significantly between not-for-profit (1.9 percent) and for-profit hospitals (1.4 percent), in contrast to the mean proportion spent on uncompensated care. Both types of spending varied widely across hospitals. Policy makers should consider measures that remove disincentives to meeting the persistent considerable need for charity care—for example, increasing supports to offset rising Medicaid shortfalls resulting from program expansion—and facilitate the tracking of ACA impacts on the distribution of charity care and uncompensated care delivery.
Abstract: Governments face a fundamental choice between in-house production and contracting out for the delivery of services to citizens. This article examines the importance of ideology, fiscal pressure, and size for contracting out in technical and social services. The analysis builds on a panel data set covering municipal spending on services in all 98 Danish municipalities. The authors find that contracting out is shaped by ideology in social services but not in technical services, which indicates that social services are the contemporary ideological battlefield of privatization. The analysis further reveals that economically prosperous municipalities are more likely to contract out social services, whereas contracting out of technical services is not influenced by economic affluence. Finally, larger municipalities contract out more in technical services but less in social services, demonstrating that the size effect is contingent on the transaction cost characteristics of the service.
Private corrections companies, which contract with corrections departments and facilities to oversee and provide services to incarcerated people, make up a multibillion-dollar industry. Every year, they devote resources to building influence with decision makers in order to find and capitalize on new business opportunities. One key avenue of influence is through professional corrections associations, which are non-profit organizations that support corrections officials, including wardens, administrators, state Department of Corrections staff, sheriffs, and others through events, trainings, and public policy advocacy. This report first details how companies spend millions of dollars sponsoring conferences, paying vendor fees, and providing other funding to gain access to the professional corrections associations. This report then shows how corrections companies leverage this access in ways that can influence decision makers and benefit the companies’ bottom lines.
One month after Vermont inmates arrived at a privately run prison facility in northern Michigan, an inmate is voicing concerns about the conditions there. … The state recently terminated a contract with the Corrections Corporation of America, and began using a new for-profit prison company, the GEO Group Inc., based in Michigan. Last month, 280 Vermont prisoners were transferred by air from two facilities in Kentucky and Arizona to a single correctional facility in Baldwin, Michigan. … Bryer writes that there was no process for sick calls when inmates first arrived, and that medical services are not available at all on weekends and holidays. There are no windows in the building, and inmates get one hour of outdoor recreation a day, Bryer says. Some items in the commissary cost double what they did at the CCA facility in Kentucky, according to Bryer, and he says there are no curtains for the showers….
Editorial: Profiting from prisons
Source: Toledo Blade, June 11, 2015
Nobody doubts that Michigan needs more jobs. But setting up a privatized penal colony for some of the nation’s most dangerous inmates is not the way to treat them. In a fit of bad judgment, Michigan lawmakers narrowly passed a bill last month that would allow GEO, a multinational private correctional services provider, to bring some of the most dangerous offenders from Vermont and Washington state and house them in the former “punk prison” in Baldwin. The prison is in northern Michigan’s rural Lake County, one of the state’s poorest. … Michigan Gov. Rick Snyder reportedly has not yet decided whether to sign this bill. He should instead strike a blow for common sense and decency and veto it, without further delay.
Second private sector prison company, with a bad track record, vying for a piece of Michigan
Source: Tim Skubick, MLive.com, May 20, 2015
…. Enter the GEO Group, a private prison company which operates some 85,000 beds around the country and it wants to add Michigan to its roster. A bill would hire the Florida firm to reopen the moth-balled so-called Punk Prison in Baldwin. …. What appeared to be a fast track effort has been slowed down to a crawl in the Senate, where some have raised concerns about the possible “warehousing” of inmates and whether they are given rehab services. That from Sen. Patrick Colebeck, R-Plymouth. GEO is no stranger to Michigan as it ran the original punk prison and various state agencies concluded it was more expensive than many of the other facilities and by closing it, the state would save over $7 million. The company complained the auditor general’s report was “skewed.” It was finally shuttered but GEO is back for another bite of the prison apple which some folks feel is poisoned. ….
Vermont DOC Moving Out-of-State Inmates to Michigan
Source: Steph Machado, My Champlain Valley, May 19, 2015
Vermont will be moving 318 prisoners from Kentucky and Arizona to Michigan. The Department of Corrections announced a new contract with the company GEO, which owns the North Lake Correctional Facility in Baldwin, Michigan. The inmates are currently in facilities owned by CCA, whose contract with Vermont is expiring. …. The state will be paying GEO less than it paid CCA–about $600,000 less annually, at the current out-of-state population of 318. ….
Bill to open private prison clears state House
Source: Paul Egan and Kathleen Gray, Detroit Free Press, May 7, 2015
GEO Group officials say allowing the company to house prisoners from other states with the highest security levels would give them the flexibility they need to make the prison economically viable. …. A bill that’s expected to allow Michigan’s former “punk prison” to open as a privately run adult facility housing prisoners from other states passed the state House in a narrow vote Thursday. House Bill 4467 was approved 57-53, and now moves on to the Senate. The bill removes a restriction that prevents the Florida-based GEO Group, which wants to reopen and operate the former private youth prison near Baldwin, from accepting prisoners with the highest security levels — those above Level 4. …. As proposed, the bill would also allow GEO to take inmates from Michigan prisons, but the company says that’s not part of its plans. A Michigan Department of Corrections official said that the state has no interest in sending Michigan inmates to the private prison. ….
Michigan House votes to let private prison house high-security inmates from other states
Source: Jonathan Oosting, Mlive.com, May 7, 2015
The Michigan House on Thursday narrowly approved legislation aimed to help one of the country’s largest private prison companies bring out-of-state inmates to its shuttered facility in Baldwin. House Bill 4467, approved in a 57-53 vote, would allow The GEO Group Inc. to house Level V high-security inmates at the now-empty North Lake Correctional Facility…. State Rep. Sam Singh, D-East Lansing, spoke out against the bill, calling it “a form of backdoor privatization of state prisons” because it would also allow the state to house Level V inmates there, if it chooses to at a later date. Singh also said that GEO Group has “a spotty track record across the country, but also here in the state of Michigan.” He pointed to a 2005 Michigan audit, fines for understaffing in New Mexico, a prisoner escape in Arizona, and a scathing Justice Department report about a Mississippi youth prison that GEO Group took over in late 2010. ….
Bill would allow private prison near Baldwin to re-open
Source: Paul Egan, Lansing State Journal, April 23, 2015
The former “punk prison” near Baldwin would re-open as a private prison housing adult inmates from other states, bringing about 150 jobs to one of the most economically depressed areas of the state, under a bill taken up Thursday by a House committee. As proposed, the bill would also allow the prison, operated by the Florida-baed GEO Group, to take inmates from Michigan prisons, but the company says that’s not part of its plans and a Michigan Department of Corrections official said the state has no interest in sending Michigan inmates to the private prison, which has been closed for about four years. House Bill 4467 would remove a restriction that prevents GEO from accepting prisoners with the highest security levels — those above Level 4. GEO officials say allowing the company to also bring Level 5 and Level 6 prisoners from other states would give them the flexibility they need to make the prison economically viable…. The prison near Baldwin opened as a private youth prison in 1998 under former Gov. John Engler, a Republican. Ot closed in 2005, under former Democratic Gov. Jennifer Granholm, amid reports it was too costly to run and neglected the health and educational needs of its young inmates. Later, under the GEO Group, it briefly housed inmates from California, with the restrictions in place on the security levels of the inmates, but closed in 2011….
Federal Beds To Keep More Vermont Prisoners In Kentucky
Source: Laura Krantz, VT Digger, January 19, 2015
A deal in the works to house more federal inmates in Vermont prisons will hamper the state’s effort to reduce the number of local prisoners incarcerated in Kentucky and Arizona, the corrections commissioner said Monday. Vermont contracts with the U.S. Marshals Service to house up to 40 federal prisoners in Vermont prisons. The feds pay the state $129 per prisoner per day. … The deal will be good for the state’s pocketbook, but bad for the DOC’s goal of reducing the number of prisoners it houses with private prison contractor Corrections Corporation of America.
Advocates renew push to keep inmates in VT
Source: Terri Hallenbeck, Free Press Staff, August 17, 2014
…. A group of advocates is making a push to halt the long trips, the separation of inmates from family and the use of a for-profit company to house prisoners. About 25 people gathered in Burlington on a recent evening to strategize how to keep Vermont from renewing the out-of-state prison contract with Corrections Corporation of America when it comes due next year. … The group plans to launch a drive Sept. 22 titled “Locked Up & Shipped Away” and hopes to collect petitions from the Vermonters urging public officials to stop sending Vermont inmates out of state, Wizowaty said. Group members also plan to organize efforts to ask political candidates for their support at candidate forums through the fall. The group plans to hold organizational meetings in the coming weeks in Burlington, Montpelier and Brattleboro. … Wizowaty wants to halt or shorten the state’s next contract for out-of-state prison beds. Time and simple short-term math are working against her, but the state is looking for new options with a new contract. … Richard Byrne, the state Corrections Department’s out-of-state unit supervisor, said he is in the process of sending notices to states, counties and private prison operators that might have space. The state likely will put out a formal request for proposals in September to replace the existing four-year CCA contract, which expires June 30. … As of last week, because the state’s own prison were full, Vermont had 482 inmates serving time in two out-of-state prisons run by Corrections Corporation of America: 444 in Beattyville, Ky., and 38 in Florence, Ariz.
Abstract: The federal government encourages public support for charitable activities by allowing people to deduct donations to tax-exempt organizations on their income tax returns. Tax-exempt hospitals are major beneficiaries of this policy because it encourages donations to the hospitals while shielding them from federal and state tax liability. In exchange, these hospitals must engage in community benefit activities, such as providing care to indigent patients and participating in Medicaid. The congressional Joint Committee on Taxation estimated the value of the nonprofit hospital tax exemption at $12.6 billion in 2002—a number that included forgone taxes, public contributions, and the value of tax-exempt bond financing. In this article we estimate that the size of the exemption reached $24.6 billion in 2011. The Affordable Care Act (ACA) brings a new focus on community benefit activities by requiring tax-exempt hospitals to engage in community wide planning efforts to improve community health. The magnitude of the tax exemption, coupled with ACA reforms, underscores the public’s interest not only in community benefit spending generally but also in the extent to which nonprofit hospitals allocate funds for community benefit expenditures that improve the overall health of their communities.
…In a recent paper, Latika Chaudhary and I assess the earnings gains to associate’s degree programs in for-profit colleges. After carefully controlling for student background characteristics (including unobservable characteristics like ability and motivation), we find that for-profit students who work both before and after attending experience a bump in earnings around four percent per year of education—or 10 percent total (since a typical associate’s degree take 2.6 years to complete)—relative to high school graduates who do not attend college. The annual earnings gain increases to seven percent when we add in the slightly higher probability of being employed post-education. We find suggestive evidence that students who drop out of for-profit programs see virtually no return and those who complete their associate’s degrees have higher returns—around eight percent per year. Still, these numbers are quite a bit smaller than the returns found in other sectors (upwards of 12 percent per year for community college associate’s degree students) and suggest that many for-profit students would fare better in public community colleges, where earnings gains may be higher and tuition is less than a quarter of the price.
The labor market returns to a for-profit college education
Source: Stephanie Riegg Cellini and Latika Chaudhary, Economics of Education Review, Volume 43, December 2014, Pages 125–140
Abstract: A lengthy literature estimating the returns to education has largely ignored the for-profit sector. In this paper, we estimate the earnings gains to for-profit college attendance using restricted-access data from the 1997 National Longitudinal Survey of Youth (NLSY97). Using an individual fixed effects estimation strategy that allows us to control for time-invariant unobservable characteristics of students, we find that students who enroll in associate’s degree programs in for-profit colleges experience earnings gains of about 10% relative to high school graduates with no college degree, conditional on employment. Since associate’s degree students attend for an average of 2.6 years, this translates to a 4% return per year of education in a for-profit college, slightly lower than estimates of returns for other sectors found in the literature.
Betrayers of the Dream
Source: Mark Huelsman, The American Prospect, July 12, 2015
On April 26, an institution of higher education that as recently as 2010 employed more than 6,000 faculty members and another 4,000 in support staff announced that it would close its doors. Corinthian Colleges had enrolled more students than the Ohio State University and the University of Texas at Austin combined. For the giant for-profit chain founded just 20 years ago, the fall from grace was aided by lawsuits from several state attorneys general and the federal government, and investigations by the SEC. These found a broad pattern of deception in recruiting students, bogus reporting of job placement data, and a strategy of combining high tuitions and debt levels with a substandard educational product. … In the publicity about the government’s belated crackdown on the for-profit education industry, one key fact has not gotten sufficient attention: The students targeted and affected most by fraudulent operators are disproportionately black. The story of predatory for-profit colleges is not unlike that of subprime lending or the proliferation of payday loans. Wider economic unease was used by the cynical to bring further distress to people of color. … The differences for those seeking two-year degrees are even more stark. Tuition at community colleges nationally is $3,347. At a for-profit, it’s $15,230. Average cumulative debt for black graduates at two-year for-profit programs is nearly $26,000, and 93 percent of students must borrow. At community colleges, which are often competing for the same low-income, adult, or first-generation students, far fewer students borrow and debt levels are nearly $10,000 lower. On average, a black student takes on more debt for a two-year degree at a for-profit college than a white student does for a bachelor’s degree at a public college. … A full 53 percent of student loan borrowers at four-year for-profit programs drop out, including 65 percent and 67 percent of black and Latino borrowers. Compare this to about one in five borrowers at public four-year colleges and one in three borrowers at community colleges, and you quickly begin to realize that even if for-profits could claim to offer a similar product, it’s one that comes with far greater risk.
For-Profit Colleges Encourage Huge Student Debt
Source: Steven Salzberg, Forbes, 7/12/2015
Would you pay the same tuition for a Harvard degree as for a second-rate school that you’ve never heard of? Probably not. But thanks to the federal government’s help, that’s exactly what we are all doing. It turns out that many of the biggest beneficiaries of federal loan programs for graduate schools are low quality, for-profit universities that have figured out how to turn federal largesse into nice fat profits. A new study from the Center for American Progress finds that just 20 universities account for nearly one-fifth of all grad student debt, a total $6.6 billion. What’s perhaps most surprising is who those universities are: 10 of the 20 are for-profit schools, including two foreign schools….The degrees themselves are barely worth the paper they are printed on, because the reputations of most of these schools are–well, let’s just say they aren’t good. Graduate degrees do improve your career choices, if you get them from a well-regarded institution. But when the school isn’t even ranked in the top 200, a degree isn’t going to open any doors, and it’s certainly not worth borrowing tens of thousands of dollars to get one.
Forgiving Student Debt at Corinthian Colleges and Other For-Profits
Source: New York Times, Room for Debate, May 7, 2015
The for-profit Corinthian Colleges filed for bankruptcy after investigations into possible recruiting fraud led the Department of Education to suspend its access to federal student aid. Thousands of former students are asking the government to forgive their loans, arguing that the school used predatory practices to persuade them to borrow money. Other for-profit colleges have been accused of similar practices.
Loan relief for students could cost taxpayers millions of dollars, and establish a precedent for other students unhappy with their college degree. Who deserves debt forgiveness when for-profit colleges close or are accused of fraud?
Insufficient Protections at the Department of Education
Ben Miller, New America Foundation
Students who borrow loans from the federal government have a reasonable expectation of protection.
Forgiving Loans Would Be a Mistake
Richard Vedder, Center for College Affordability and Productivity
Loan forgiveness would set a precedent and encourage excessive borrowing.
For-Profit College Student Debt Should Be Forgiven
Osamudia R. James, law professor
We cannot expect these students — who are mostly veterans, minority and low-income — to carry their debt burden back to already economically destabilized communities.
Align the Incentives of Students and Schools
Andrew Kelly, American Enterprise Institute
If an institution’s students cannot pay back their loans, the school should be on the hook to pay back a portion of the loan balance.
The Government Should Actively Notify Borrowers
Robyn Smith, National Consumer Law Center
Thousands of low-income borrowers whose debts should be forgiven instead struggle financially because of the government’s draconian powers to collect student loan debts.
Source: Moshe Schwartz, Wendy Ginsberg, and John F. Sargent, Jr., Congressional Research Service, CRS Report, R44010, April 30, 2015
Summary: …In FY2014, DOD obligated more money on federal contracts ($285 billion) than all other government agencies combined. DOD’s obligations were equal to 8% of federal spending. … This report examines (1) how much money DOD obligates on contracts, (2) what DOD is buying, and (3) where that money is being spent….
Everywhere privatization has occurred, public access to the facts and figures around privatization has been a challenge. Here in Saskatchewan, that challenge can been illustrated by the difficulty of getting information about the privatization of hospital laundry. The cloak of secrecy was delt a major blow last week when the Saskatchewan Information and Privacy Commissioner recommended the disclosure of a 10-year contract for laundry services between K-Bro Linen Systems and 3sHealth. The Commissioner also recommended that the publicly-funded 3sHealth be brought under legislation as a health care organization and subsequently freedom of information laws….The decision to privatize hospital laundry services is a major restructuring of our health-care system. It means the loss of about 350 jobs in six communities and the loss of publicly-provided and local laundry services. University of Winnipeg economist, Hugh Grant, estimated a net loss in provincial income between $14 and $42 million over the next 10 years from laundry privatization….Public access to documents through freedom of information legislation is critical to accountability and transparency.
But privatization presents hurdles to public knowledge. In this case, 3sHealth and K-Bro Linen refused to publicly disclose the 10-year contract claiming the information was a “trade secret” and that its disclosure would cause economic harm…..The Ministry responded that “[t]he Ministry has performed a search for this record and has determined that this record does not exist within the Ministry of Health.” Four of the health regions responded that “no record exists.”
It is shocking that health regions who will have to monitor K-Bro’s laundry services and pay the bills did not have a copy of the contract.
New Privacy Commissioner report a victory for transparency; CUPE calls for changes in FOI legislation in response
Source: Canadian Union of Public Employees, July 24, 2015
Attempts by 3sHealth to prevent public disclosure and transparency on the privatization of hospital laundry services have been dealt with a major blow by the Saskatchewan Information and Privacy Commissioner in a new report that calls for public disclosure of a fully unredacted contract with K-Bro Linen. “CUPE has been trying to get a public copy of the contract with K-Bro Linen since it was signed in December 2013,” said Cheryl Stadnichuk, CUPE Researcher. “Both 3sHealth and K-Bro went to great lengths to prevent disclosure of this contract.” After unsuccessful attempts to get a copy of the 10-year K-Bro contract from the Ministry of Health, who claimed it did not have a copy, CUPE filed access to information requests to five health regions. All health regions, except for Sunrise Health Region, replied that they did not have the record. Sunrise offered a costing model template and requested a copy of the contract from 3sHealth, who denied the request. A heavily censored copy of the contract was provided to CUPE by 3sHealth only after a formal review had commenced. The review culminated in today’s report, which recommends full disclosure of both documents. “When dealing with our government, or one of its agencies, an unfortunate pattern seems to have developed,” said Tom Graham, President of CUPE Saskatchewan. “Requests for information are simply denied or the information that is released is heavily censored. It is time for us to seriously consider making changes to freedom of information legislation to ensure openness and transparency in government.” CUPE is calling for 3sHealth to be included under freedom of information legislation – a move in line with the report’s recommendation that 3sHealth be made a “health care organization” under the Regional Health Services Act. “3sHealth plays a major role in the provision and restructuring of health care services,” added Graham. “3sHealth is funded by public dollars but is not covered by LAFOIP and is not subject to the same public scrutiny as other publicly-funded health organizations. This must change.” “This report is a victory for democratic accountability and transparency,” said Stadnichuk. “Saskatchewan people deserve the opportunity to view all contracts for privatizing services to monitor the full costs.” “Disclosure is especially important in this case, since we’re dealing with a ten-year contract in an industry notorious for cost overruns,” added Stadnichuk. Public statements in B.C. show that payments to two laundry corporations that hold the monopoly on service to health authorities in the Lower Mainland increased by a staggering 170 per cent over a seven-year period. Critics of the agreement with K-Bro in Saskatchewan have raised concerns about possible cost overruns because of unrealistic cost valuations.
Short-Term Gain, Long-Term Pain: The Privatization of Hospital Laundry Services in Saskatchewan
Source: Hugh Grant, Manish Pandey, James Townsend, Canadian Centre for Policy Alternatives, December 2014
From the abstract:
The government’s plan to privatize hospital laundry services will have a negative impact on Saskatchewan’s local economies. The decision to close five regional laundries and centralize laundry services through Alberta-based K-Bro Linen will decrease the income of the residents of Saskatchewan between $14 and $42 million over the next 10 years in comparison to public options. The laundry plant closure in Prince Albert alone will result in 74 jobs lost, cause a decline in labour income of $2.5 million in the region, and a decline in regional GDP of $3.7 million. Privatization will also redistribute income away from workers and other residents of the province in favour of a private corporation whose major shareholders reside outside of the province. That is the conclusion of a new report by University of Winnipeg economists Hugh Grant, Manish Pandey and James Townsend. “Short-Term Gain, Long-Term Pain: The Privatization of Hospital Laundry Services in Saskatchewan” concludes that while privatization may garner limited, short-term savings, the long-term costs borne by Saskatchewan residents will be significantly higher.