While a majority of Michigan’s local public school districts do
not report privatizing noninstructional services — such as transportation,
student meals and custodians — the growing minority who do privatize these
services often report substantial savings. Contracting out custodial services
has yielded some of the biggest winners. Recent examples reveal that the
Muskegon Reeths-Puffer district signed a contract to save $480,000 annually —
about $114 per student; Avondale in Auburn Hills plans to save $490,000 annually
— $128 per pupil; and the Jackson Public Schools would trim their annual
custodial costs by $1.3 million, or $193 per pupil.
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(Click to enlarge) |
| | A growing number of Michigan public school districts are relying on the privatization of noninstructional services for cost savings.
Source: Mackinac Center for Public Policy |
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For 2006, just 63 of 552 local school districts reported private
contracts for custodial services. Yet, if all of the other districts took the
privatization plunge for only custodial services and saved an average of just
$100 per pupil, the minimum annual savings statewide for Michigan public schools
would exceed $150 million.
On May 22, 2007, the Michigan House of Representatives approved
House Bill 4592 — legislation that would require school districts to create a
plan to transfer their procurement, human resources, busing, contracting
activities and other noninstructional services to their intermediate school
districts. Just prior to the House’s final vote on this bill, State Rep. Judy
Emmons, R-Sheridan, introduced an amendment that would have also required the
consolidation plan to include opportunities for cost savings that may be
achieved by seeking competitive bids and privatizing noninstructional school
services like busing, food service and custodians. Six Republican lawmakers
joined 56 Democrats in rejecting the Emmons amendment, and it failed 62-46.
As eventually passed by the House, the final bill encourages,
but does not require, districts and ISDs to act on the support service
consolidation plans, or to make plans to seek competitive bids on the services,
as suggested by the Emmons amendment.
In a 2007 survey of competitive contracting at Michigan’s public
schools, Michael D. LaFaive, the Mackinac Center for Public Policy’s director of
fiscal policy, and Mackinac Center Adjunct Scholar Daniel J. Smith found that
40.2 percent of districts outsourced at least one noninstructional service and
that the trend toward privatization was growing (up from a revised 37.4 percent
the prior year). However, the authors also point out that despite annual cost
savings that can exceed $100 per pupil, there are political impediments to
competitive contracting.
The Michigan Education Association, the state’s largest public
school employee union, is identified as one such obstacle by a school official
whose district outsources for its food and transportation services: "The
contracts certainly make us more efficient and provide a level of expertise that
(the district) could not otherwise expect. We are currently satisfied with both
of our contractors. In my opinion the largest barrier to privatization is the
highly effective MEA campaign against contracting. I think that good arguments
can be made for contracting and that efficiencies can be achieved, but it is a
hard sell against the MEA public relations machine."
Samples of the MEA’s opinions regarding competitive contracting
are summarized in the "Alternative Views" appearing nearby.
A summary of the Mackinac Center’s 2007 research on public
school competitive contracting is located at
www.mackinac.org/8881. To keep up to
date regarding privatization of government services across Michigan and the
nation, see the biannual
Michigan Privatization Report at
www.mackinac.org/pubs/mpr/.
The
MichiganVotes.org tally for the school contracting amendment
that was defeated appears below.
