An important policy conclusion follows from the study’s key findings (which are distilled in the executive summary): Although school district size plays a statistically significant role in determining per-pupil operating spending in Michigan school districts, this role is relatively small. Manipulating district size by consolidating small districts — or more accurately, by redrawing those districts’ boundaries — could theoretically save as much as $31 million annually, but due to practical considerations, there would seem to be little chance of coming close to that theoretical maximum.

Among other things, such extensive consolidation would require altering the borders of hundreds of Michigan school districts (see “Appendix C: Michigan School District Head Counts”), and optimal size could not easily be maintained, even if it could be initially achieved.  In practice, the potential savings from redrawing these boundaries could also be reduced by any initial management and capital construction costs involved, and by potential increases in long-term student transportation costs. It is also unclear what effect consolidating districts might have on academic quality.

The study’s results suggest that costs will continue to rise over time unless market incentives are introduced into the system. Arguably the study’s most significant finding is that public school officials appear to maximize school operating spending regardless of the public demand for educational services. The introduction of market incentives could counteract this tendency by providing inducements for policymakers and school officials to reduce operating costs while maintaining or improving quality.