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The Southfield Public Schools last fall began using private contractors to provide food, transportation and janitorial services. It is estimated that this will save the district between $14.7 million and $21.5 million over a three-year period — or an annual savings of $557 to $814 per pupil. This comes in an environment when falling state revenue projections are forcing the governor to request a reduction of $59 from the state's per-pupil foundation allowance in her fiscal 2010 budget recommendation.
For several years, the Mackinac Center's Fiscal Policy Initiative has tracked privatization of non-instructional services at public schools. The Center's 2008 survey found that 40 percent of Michigan school districts contract out for at least one of the three big services: busing, custodial and food. Southfield's projected savings for doing all three is not a surprise, as the Mackinac Center's surveys have indicated that privatizing just one support service can lead to annual average savings of more than $20 per-pupil for food, more than $135 for janitorial and more than $220 for transportation.
Privatization's timely injection of fiscal relief is still available and yet unused by a majority of the state's 551 school districts, in large part due to pressure from the Michigan Education Association, the state's largest public school employee union. In December, the MIRS Capitol Capsule newsletter (www.mirsnews.com - subscription required) published a story about Southfield, characterizing its new arrangement as "one of the most comprehensive privatization schemes in the state." An MEA spokesperson called it part of a "dangerous trend" and noted that the union sends "directors and consultants" and "all the resources we can possibly provide to fight the battle" against districts wishing to privatize.
One MEA tactic is to launch recalls against school board members that vote to hire private contractors. Such an attempt failed in Southfield due to lack of sufficient recall petition signatures. A similar effort against four Reed City board members succeeded during the Nov. 4, 2008, general election, despite the fact that the anticipated annual savings of $300,000 was used to hire three new teachers. Prior to privately contracting for food and custodial services, the Reed City district's projected expenses were exceeding revenues by $890,000.
The recall ballot language used by the MEA against the board members avoided listing the privatization vote as the reason. Instead, it cited their approval of the superintendent's contract; a baseless allegation that they had not cut administrative pay; and a subjective accusation that they did not consider input at board meetings. What may have been intended as an effort to deflect attention from the real issue worked on Election Day, but just barely: The average vote in favor of recalling each of the four was just 51 percent.
The hostility regarding privatization savings has also spread to the state Capitol. The MIRS story quotes state Rep. Rick Jones, R-Grand Ledge, as saying he believes that schools are more dangerous when they contract with the private sector. Last legislative session, Jones and state Rep. Jeff Mayes, D-Bay City, co-sponsored a package of bills that would have placed more restraints on the ability of districts to privatize.
On the other hand, Michael LaFaive, director of the Mackinac Center's Fiscal Policy Initiative, told MIRS that contractors winning competitive bids will often provide more sensitivity to safety and other concerns because they know that their contracts will expire if they do not keep school boards and administrators happy: "Now they've got a person at a private company saying, 'What can I do for you today?'"
The Jones and Mayes bills had co-sponsors from both political parties, but the bills were not considered in the 2007-2008 session of the Michigan Legislature. As of this writing, neither lawmaker has re-introduced these bills for the 2009-2010 session. However, state Rep. Fred Miller, D-Mount Clemens, has introduced House Bill 4219, which MichiganVotes.org says would "repeal a law that prohibits teachers unions from bargaining to get a school district to agree to not privatize non-instructional support services including bus, custodial, or food services, even if doing so would save the district money." State Rep. Doug Bennett, D-Muskegon, has introduced House Bill 4584, which MichiganVotes.org says would "prohibit the privatization of any school function if the savings are less than 10 percent compared to the cost of school employees performing the same function."
The contact information for all lawmakers may be found here.
Kenneth M. Braun is the senior managing editor of Michigan Capitol Confidential. He may be contacted at author@mackinac.org.
The Mackinac Center for Public Policy is a nonprofit research and educational institute that advances the principles of free markets and limited government. Through our research and education programs, we challenge government overreach and advocate for a free-market approach to public policy that frees people to realize their potential and dreams.
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