Outsourcing by Michigan School Districts

Less than 10 years after the Mackinac Center’s first school privatization survey, almost half of Michigan school districts contract out for at least one of the three main support services. The survey reports have helped inform school district administrators of the growing trend toward privatization.

The latest report, authored by Fiscal Policy Analyst James Hohman and intern Dustin Anderson, showed that 48.8 percent of school districts contract out for food, custodial or transportation services. The 57 newly contracted services are expected to save $16.7 million in the first year alone.

The Center has published eight privatization surveys since 2001, when only 31 percent of districts contracted out services. The report is the only list of which Michigan districts are contracting out, and it has been replicated in Arizona, Florida and Illinois.

While its primary goal is to inform administrators and school boards of the benefits of privatization, the survey helps others as well. Contractors check on the growth in the market, school district consultants consider it in cost-saving plans and Michigan media turn to the Center for detailed survey data.

“The Mackinac Center’s privatization survey has helped public school officials make data-driven decisions that have saved districts — and taxpayers — millions of dollars," said former state Superindendent Tom Watkins. "The Center and its research have helped advance privatization from a seldom used practice to an effective tool that has now been accepted by nearly half of Michigan’s school districts.”

In 2006, Center analysts recommended that the city of Pontiac outsource police services to Oakland County. The city’s finances were deteriorating and officials were looking for savings ideas. Pontiac didn’t implement the recommendation at that point, and the state had to appoint an emergency financial manager to get the city’s books back in order. The manager decided in October to contract with the county sheriff, saving $2 million.