Privatization and Government Reform News: Telehealth laws, impact fees, and more
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Privatization and Government Reform Newsletter

Privatization and Government Reform News: Telehealth laws, impact fees, and more

Plus, reforming underperforming schools, water outsourcing, private student housing, and more.

In this issue:


HEALTH: Assessing States’ Telehealth Practices

HOUSING: Development Impact Fees—Friend and Foe

CORRECTIONS: Alabama Faces Prison Finance Challenges

News & Notes

LOCAL GOVERNMENT: D.C. Selects Streetlight Partner, a Possible Nonprofit Future for Charleston Public Schools, and Iowa City OK’s Water and Wastewater Contract

STATE GOVERNMENT: Three State Liquor Privatization Proposals, and Arizona State University Housing Gets New Private Management 

FEDERAL GOVERNMENT: Military Housing Partner Receives Hefty Fraud Fine


Assessing States’ Telehealth Practices

The COVID-19 pandemic has highlighted many innovative practices in health care service delivery, including telehealth, which has been crucial in curtailing unnecessary in-person provider-patient interactions. Although telehealth practices have grown in recent years, states vary greatly about what constitutes telehealth services, when they can be allowed in lieu of in-person interaction, who pays for them, who can administer them, and a variety of other critical factors.

In a new report, Reason Foundation’s Vittorio Nastasi joins the Cicero and Pioneer Institutes’ Josh Archambault in taking an in-depth look at how telehealth practices vary across the 50 states. The report examines the types of health services eligible for telehealth, the methods of telehealth services allowed, scope-of-practice rules concerning the types of health care professionals allowed to perform telehealth services, and payment implications for patients, providers, and insurers. 

Development Impact Fees Do Both Harm and Good

Many parts of the country are affected by high housing costs, and government policies often place upward pressure on housing costs through land-use regulations, building codes, taxes, and fees. Development impact fees—designed to capture revenue for infrastructure investments that benefit new development—often suffer from flaws that make them counterproductive. For example, owners of high-value property often pay the same fees as owners of lower-value properties and the misuse of fee revenues for purposes better handled by other revenue streams. 

In a recent article, Reason’s Vittorio Nastasi demonstrates how poorly designed impact fees can cause housing costs to rise in regressive ways and how they could be tweaked to act more like user fees.

Alabama’s Prisons Have Many Problems, Including the Prisons Themselves

Alabama received notice from the U.S. Department of Justice in 2019 that the conditions inside the state’s prisons were so poor they constituted “cruel and unusual punishment.” While many factors play a role in such conditions, one obvious reason for the DOJ’s designation is the physical conditions of the prisons themselves. The state has tried to secure funding to build new facilities to replace some of its older prisons but has received backlash from a variety of sources, including the financial services industry, which is under pressure from criminal justice activists to reject any deal to build new prison facilities.

In a recent article, Reason Foundation’s Austill Stuart shows why the well-intentioned pressure from activists looking to make criminal justice reforms can end up harming the state’s efforts to improve its corrections system to the detriment of inmates, staff and taxpayers.


Balfour Beatty Pleads Guilty Over Fraudulent Military Housing Repair Records: In December, the Department of Justice ordered Balfour Beatty to pay $65 million in fines ($33.6 million criminal, $31.8 restitution) and undergo a three-year probation period after the company pleaded guilty to fraud over maintenance at its military housing facilities. Investigations found numerous cases of maintenance work entries that were falsified in a myriad of ways, from reporting repairs that never happened to deliberately inflating customer response metrics with no indication that the behavior would end without intervention.

Virginia Liquor Retail Privatization Legislation Introduced: House Bill 328, which would end Virginia’s liquor retail monopoly, was introduced in the Virginia General Assembly last month. The legislation calls for selling all state stores run by the Virginia Alcoholic Beverage Board Authority (ABC) while maintaining ABC’s wholesale monopoly for liquor.

Pennsylvania Proposal to Privatize Liquor Wholesale, Retail: HB 2272, introduced in January in the Pennsylvania General Assembly, would amend the state’s constitution to prohibit the state’s monopolies on liquor wholesale and retail. Lawmakers have made several attempts to end the state’s twin liquor monopolies over the past decade. This proposal alone does not specify how retail and wholesale of liquor would be handled without the agency monopolies that it would deem illegal.

Oregon Ballot Initiative Would Allow Non-Government Liquor Retail: Initiative 335, filed in January, would allow private retail establishments to sell liquor in the state of Oregon. Currently, only the state’s Liquor and Cannabis Commission is allowed to sell liquor in stores it owns and operates. The proposed ballot initiative would end the retail liquor monopoly, allowing grocers and other “large” retailers (minimum 4,000 square feet) to obtain liquor retail licenses and compete with the state-run liquor stores. State law requires a minimum of 6% of the number of voters in the most recent gubernatorial election to sign a petition for the initiative to make the ballot.

Arizona State University Finalizes Student Housing Deal: In January, Harrison Street and American Campus Communities (ACC) reached financial close on a joint venture to take over ownership and operation of eight student housing facilities at Arizona State University (ASU). ACC previously entered a P3 with ASU to own and operate the facilities—this deal gives Harrison Street a 45% ownership stake in the properties.

D.C. Selects Streetlight P3 Partner: The District Department of Transportation and the D.C. Office of Public-Private Partnerships announced they had selected Plenary Infrastructure DC as the preferred partner for the DC Smart Street Lighting Project. The estimated $309 million performance-based project will upgrade 75,000 area streetlights to LED technology and enable greater monitoring and control technologies. The improved lighting is also expected to save 50% on energy consumption and add nearly 250 wireless access points to improve broadband connectivity. The construction phase is expected to be completed in two years, after which Plenary will oversee all service operations for the remainder of the 15-year period.

Underperforming Charleston Public Schools Face Possible Private Nonprofit Management: A vote on a proposal to improve performance in Charleston, South Carolina, area schools that could lead to private nonprofit management was delayed in January. The $31 million Reimagine Schools initiative calls for community commissions to develop turnaround plans for over 20 schools in the Charleston area, which could include nonprofit organizations taking over the management of schools. No new date for a vote was available at press time.

Iowa Town Votes to Outsource Water, Wastewater: In December, the Boone (Iowa) City Council voted 5–2 in favor of outsourcing water and wastewater management to U.S. Water Services in a five-year contract worth approximately $8 million. Residents and utility workers were somewhat surprised by the move, which reportedly had no bidding process prompting the contract award. Iowa’s Department of Natural Resources notified the city a decade ago that it needed millions of dollars in upgrades.


“Instead of promptly repairing housing for U.S. service members as required, BBC [Balfour Beatty Communities LLC] lied about the repairs to pocket millions of dollars in performance bonuses. This pervasive fraud was a consequence of BBC’s broken corporate culture, which valued profit over the welfare of service members. Today’s global resolution sends a clear message to companies that if they do not maintain adequate compliance programs, voluntarily self-disclose misconduct, and fully cooperate with the government, they will pay a price that outweighs the profits they once reaped.”

– Deputy Attorney General Lisa O. Monaco on Balfour Beatty being found guilty of lying about repairs at military housing units the company operates

“We are very pleased to advance this major streetlight modernization project that exemplifies Mayor Bowser’s commitment for a safer, stronger DC. It also puts into effect a government procurement model that increases cost savings and performance accountability, both of which we know are incredibly important to every District resident.”

– Director of the District Department of Transportation Everett Lott on selecting a preferred partner for the street lighting project