School Savings

Is your school district missing out on savings?

Switching Employee Health Insurance Providers — The story of one school district’s $3 million idea.

Splitting the Health Insurance Bill — Examples of how other districts are controlling their health insurance costs.

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School Health Insurance Information Database — A database containing information about the costs of district-provided employee health insurance for nearly every district in the state.

Privatizing Noninstructional Services — Districts continue to save money through private-sector expertise and cost control.

School District Consolidation and Break-up — There are savings in consolidating some school districts and in breaking apart larger ones.

Six Habits of Fiscally Responsible Public School Districts — A look at six ways for districts to save money without laying off teachers.

Are Schools Underfunded? — Resources on current and perennial issues surrounding Michigan’s public school system financing.

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Like other school officials across the state, you’re probably feeling the frustration of not knowing how much state-based funding your school will receive this year. Although the exact funding amount remains unknown, one thing is clear: Overall revenue for schools will decline, and this puts the burden on you to find ways to save money for your district. No doubt this is a significant challenge, but there are many districts saving themselves thousands of dollars — sometime millions — per year that you could learn from. Here are some examples of how they’re doing it:

Switching Employee Health Insurance Providers

Flint Community Schools saved $3 million by merely switching from an insurance plan administered by the Michigan Education Special Services Association to one provided by HealthPlus. In the midst of negotiating a contract with the district’s teachers union, the Flint board voted to make itself the policyholder of the district’s insurance coverage. This essential step gave the district full control of its employees’ benefits and claims history data.  Recently, the district won an injunction case brought against it by the local teachers union in late October, and Flint Community Schools is now saving millions without cutting a single program or employee.

Capping or Sharing Health Insurance Premium Costs

Districts from Lansing to Sault Ste. Marie have placed caps on the amount spent on health insurance premiums. Others have successfully negotiated sharing premium increases with employees. Capping and sharing costs is so important that a fact-finder in contract negotiations with Leslie Public Schools stated that, “(N)ot agreeing to some form of limit when selecting a preferred (health) plan would be irresponsible and illogical.”

Putting Employees in Charge of Their Health Insurance

Buchanan Community Schools uses a unique program that makes their per-pupil expense for employee insurance one of the lowest in the state. The district contributes a negotiated amount towards employee health insurance, but leaves it up to their employees’ unions to find insurance providers. If unions find premiums for less than what the district has agreed to contribute, the difference goes into an escrow account that can then be used to subsidize rising premium costs.

Privatizing Noninstructional Services

As the map below shows, more and more districts are taking advantage of this fiscally responsible strategy. (Light green areas indicate districts that are saving money. See more information at www.mackinac.org/11574.) The Troy School District contracted out food, custodial and transportation services and saved $3.8 million this year alone. Richmond Public Schools expects to save $283,000, the equivalent of $150 per pupil. Statewide, the 29 newly outsourced contracts are expected to save a total of $6.9 million.

Michigan’s receding economy has forced nearly everyone to make difficult decisions with their personal budgets. You have the responsibility of managing your school district’s budget and you’ll have to make difficult decisions as well. But remember: You can save your school district money just as districts mentioned above did by following their lead and creating a fiscally stable educational environment.

A map of privatization in Michigan school districts is available in .pdf form by clicking the graphic below.

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