Sectors at risk
No public service is safe from the threat of privatization. Here, we focus on the utilities, education, and transportation sectors to spotlight some of the exploitation and abuse we’ve encountered with privatization in Massachusetts.
The privatization of utilities including water, sewage, natural gas, electricity, and solid waste removal can threaten the efficiency, affordability, and safety of these services.
In Fall River, controversial Mayor Jasiel Correia rushed through privatization of the city’s sanitation department without consultation with the City Council or transparent disclosures of cost. Without citizen review or oversight, Correia refused to renew sanitation workers’ collective bargaining agreement, then inked a privatization deal that cut 24 jobs and sold the city’s trash collection fleet for $1 million — even while the city still owed $5 million on the bonds to finance their purchase.
Multiple Massachusetts communities have brought privatized water systems back under public control after problems with private operator cost and quality.
- In Chelsea, water and sewer service was brought back under municipal control in 2020, after the City Manager and Department of Public Works estimated doing so would save $350,000 per year — a significant sum in this city that has been hard-hit by COVID-19. Many residents felt the private contractor was not proactive in maintenance or responding to problems. Drains, catch basins, and hydrants were not well maintained before the switch, and problems including sewage backing into homes were not unusual. Now, the Department of Public Works has hired local residents to fill the water and sewer jobs, who are represented by a union, and ready to serve their own community.
- In Hingham, the privatized water system burdened residents with high costs, poor maintenance, and excessive water loss. Despite these problems, the private water company Aquarion was guaranteed a tidy profit funded by resident water bills. After a contentious legal battle, in 2020 the town residents voted to buy their water infrastructure and place it under public control.
The threat of education privatization in Massachusetts reached a critical point in 2016 with the Question 2 Charter School Expansion ballot initiative. Some of the Commonwealth’s most powerful corporations, including many in the financial industry, raised nearly $24.8 million to fund their unsuccessful attempt to “lift the cap” on public funding of charter schools. If successful, Question 2 would have allowed charter schools to siphon off more than $450 million away from public schools. The Question 2 ballot initiative was defeated in a landslide despite massive spending by charter school proponents. The threat is not over, however, with pro-charter groups like the Walton Family-funded Massachusetts Parents United using the COVID-19 crisis as an opportunity to disparage public education and teachers unions and promote public subsidies for charter schools.
Charter schools are not the only way corporations seek to privatize the education sector. Public school services and infrastructure, from cleaning and food services to school buses and sports facilities, have been eyed as a potential source of profit. Districts need to approach outsourcing cautiously.
- In Chelmsford, the School Department outsourced custodial services to Aramark in 2011. Wages were slashed nearly in half, from an average wage of $19 for public employees, to between $8.25 and $8.75. The low pay didn’t just hurt the workers—during the five years of the company’s contract, there was a series of thefts of school and personal property by custodians paid poverty wages. In addition, schools faced cleanliness complaints, delays in snow clearing and other project completion, and town maintenance staff had to cover some duties once performed by school custodians.“ According to the Town Manager, “[they] lost a lot of institutional knowledge,” with the layoff of long-time public employees. In exchange, Chelmsford had expected to save money, but found its estimates on lay-off related costs were wrong, and that supplies the contractor was supposed to pay for were still being paid for by the public. The Town Finance Director finally concluded that outsourcing was “a huge mistake that we are all paying for every day.”
- In Framingham, privatizing school buses also led to problems for workers, students, and the district. In 2011, the School Committee decided to privatize the bus service, estimating it could save $300,000 per year on busing costs. As a result of outsourcing to Durham School Service, almost seventy drivers lost their jobs and health insurance. While drivers could reapply for jobs with the contractor, at least one said she was not rehired because of her involvement with the union. Contract renewal in 2016 shifted some of the cost of the privatization to families, instituting a fee of $250 for one student or $500 per family. By December 2019, Durham’s understaffing meant that about 150 children were late for school every day. One school committee member calculated the lost instructional time cost $2,400 per day — which could amount to a $432,000 annual loss, far more than the contract was thought to save. The school committee told the contractor it could be penalized if problems were not solved, including understaffing and endangering students by failing to remove snow from bus roofs, generating multiple complaints.
Public higher education in Massachusetts, which has seen drastic cuts in funding over the past decade, also faces risky privatization proposals. Privatization on UMass campuses has included deals with for-profit companies for online instruction, recruitment of international students, the building and management of residence halls in Boston, Dartmouth and Amherst, and more. Outsourcing has shifted union jobs to non-union private “partners,” resulting in fewer benefits protections at work for employees. Students are impacted by rising fees and tuition and higher debt on graduation, raising the burden of what should be an affordable education for young people from Massachusetts.
Privatization of the MBTA has been a longstanding goal for many privatization advocates in Massachusetts.
Over decades of operation by corporations, including Keolis and Veolia, the Commuter Rail has suffered a range of problems. The current operator, Keolis, has a record of cost overruns and millions in fines for poor performance, and in 2017 Transportation Secretary Pollack pledged not to renew its contract. However, the MBTA recently did re-engage Keolis, claiming that the pandemic left them few other options.
Despite the rocky history with the privatized commuter rail, Governor Baker has pushed for more transit privatization and appointed a former Pioneer Institute affiliate as general manager of the MBTA. Taking advantage of the crisis of 2015’s “snowpocalypse,” Baker sought and secured a waiver from the protective Pacheco law for MBTA operations. Over public and union objections, privatizers secured a new contract to run the MBTA’s parts warehouse and distribution. By 2019, problems required an expensive contract renegotiation and the hiring of an additional contractor to help manage the first. A 2020 audit found that the deal failed to produce the millions in predicted savings and that the contractor had not lived up to its obligations.
The MBTA has seen expensive overruns and contracts renegotiations with other contractors as well, including on a now almost-billion-dollar fare collection “public-private partnership.” And the professional staff at the agency, members of OPEIU, are worried that a surge in the hiring of “private contractors and consultants has resulted in inefficiency, cost overruns, and poor public service.” OPEIU has submitted a public records request to learn more about the Authority’s contracting practices, but so far the T management has stonewalled.