As an alternative to adding large amounts of extra revenue to the K-12 system, some groups have proposed consolidating education agencies as a way to direct dollars more efficiently. While persuasive evidence is in short supply, a look at the experiences of service consolidation at the intermediate school district level and combining operations at the local school district level can offer some insight into the potential benefits of consolidation.
The Michigan Legislature created the current ISD system in 1962, during a time of significant growth in student enrollment and consolidation of local districts.[*] Nearly six decades later, the landscape of K-12 education has changed dramatically. Michigan's ISDs consolidate a wide variety of services for local districts within their regional boundaries. Yet the trend toward greater consolidation of services within ISDs in recent decades has failed to create desired efficiencies, according to the limited research on the topic. A peer-reviewed study found that the practice of service consolidation within Michigan ISDs between 2004 and 2010 did not significantly reduce spending on the affected services. However, consolidating one of the five specific types of activity — business office services — was associated with an increase in classroom instructional spending.[49]
The combination of various operations at the ISD level continued apace during the last decade. At the same time, the rate of school district consolidations increased from a prolonged slowdown. Conventional districts disappeared at the rate of one every other year between 1990 and 2010. Over the following eight years, though, the number of districts accelerated downward from 551 to 537.[50] Two of the 14 losses, Highland Park and Muskegon Heights, were reconstituted as public school academies in an attempt to address serious fiscal distress and academic challenges. The remaining 12 combined with or were annexed by other districts. In 2013 alone, four districts shut down and were absorbed by their neighbors.[†]
The following year, then-state superintendent Michael Flanagan recommended more districts combine as a means of blunting downward enrollment pressures and post-recession budget challenges.[51] Yet, by that time the number of districts under financial distress had already started to wane. From 50 districts or charter schools in deficit at the end of June 2013, the number dropped to 38 two years later.[52] Conditions have improved even more since: According to the state department’s official September 2021 report, fewer than 10 districts were expected to end the fiscal year in deficit.[‡] District officials who have an easier time managing their finances face little pressure to consolidate, even if the new arrangement would be more efficient.
A 2007 Mackinac Center analysis suggests that school district consolidation could result in some cost savings under certain circumstances, but there are limitations. Specifically, once districts grow beyond a certain size — about 2,900 students based on the study — the savings from consolidation starts to recede. The reason for this is that larger districts, for one reason or another, are not as cost effective as smaller school districts.[53] Therefore, grand consolidation schemes are unlikely to help direct more resources to student learning. Organizing public education under larger bureaucracies would likely be less cost effective and potentially less capable of serving students’ unique needs.
In the fall of 2019, the average size of Michigan’s 537 conventional districts was about 2,400 students, with a median enrollment of 1,362. Following the onset of the pandemic, the next fall’s average district size dropped to 2,313 and the median to 1,315.[54] This suggests that selective instances of consolidation could lead the state closer to the optimal number of districts from a cost effectiveness point of view but does not suggest a widespread or general benefit from the policy.
Earlier research into the consolidation of rural New York school districts revealed some meaningful patterns. The smaller the districts that joined together, the greater efficiencies were realized. Combining two 300-student districts resulted in substantial savings of 20%, while combining districts with 1,500 students each yielded no fiscal benefit.[55] However, one of the study’s authors critiqued a 2010 attempt to use these numbers to forecast precise fiscal impacts in Michigan.[56]
The New York analysis found that consolidation tends to generate per-pupil savings by preserving one board and superintendent regardless of district size, as well as through bulk purchasing power and lower utilities costs at more densely inhabited school buildings. Often overlooked, however, are the added costs larger district units tend to face. Longer commutes increase transportation spending, larger and thus more influential unions exert pressure to dedicate all new spending to increasing employee compensation, and heftier, more formalized management bureaucracies reduce productivity. With more powerful interest groups aimed at influencing the decisions of the school district, parental involvement and input is more difficult to hear and to consider as a source of ideas for improvement.[57]
These limitations are in addition to another significant barrier to effective school district consolidation: it tends to be unpopular due to historic community school affiliations and athletic traditions. Consolidation often involves eliminating cherished high school sports programs and teams, some of which play a role in defining local communities. Significant pushback against consolidation from district residents often rests on these sentiments.
Precisely forecasting the effects of consolidation is difficult. Combining smaller Michigan school districts could save money. But applying the same approach to larger districts, under conditions that likely vary by region, the costs may outweigh the benefits. A general program to reduce the number of Michigan school districts could well have unintended, negative impacts. Some degree of consolidation could marginally improve efficiency, but even that result is not guaranteed.
[*] Matthew J. Brouillette, “What Are Intermediate School Districts?” (Mackinac Center for Public Policy, Michigan Education Report, Feb. 10, 2000), https://www.mackinac.org /2709; “School District Organization in Michigan” (Citizens Research Council of Michigan, November 1990), 4, https://perma.cc/JT5G-ACQC. In 1960 the state had 2,149 districts serving 1.62 million pupils; five years later there were 1,227 districts and 1.92 million pupils. Most of the consolidation occurred among primary districts that did not operate a high school. Still, the number of comprehensive districts declined from 582 in 1960 to 545 in 1965.
[†] The four were Inkster City School District (Wayne), Buena Vista School District (Saginaw), Willow Run School District (Washtenaw) and Palo Community School District (Ionia). Other districts annexed in the past decade include Freesoil Community School District (Mason), Galien Township School District (Berrien), Port Hope Community Schools (Huron), Albion Public Schools and Arenac Eastern School District. In 2011, the Britton-Macon and Deerfield districts in Lenawee County merged to form Britton-Deerfield Schools.
[‡] Michael F. Rice, “Quarterly Report to the Legislature on Deficit Districts” (Michigan Department of Education, Sept. 24, 2021), attachment A, https://perma.cc/HC4K-5NUW. Of the 17 districts that began fiscal 2020 in deficit, state analysts project eight will end up in the black. No new deficit districts were identified.