School Services Privatization on the Rise, According to Mackinac Center Survey

Competitive contracting for custodial work up more than 26 percent for the second consecutive year

For Immediate Release
Thursday, Aug. 16, 2007

Contact: Michael D. LaFaive
Director of Fiscal Policy
989-631-0900

MIDLAND — The Mackinac Center for Public Policy today released its fifth school privatization survey, which shows that more than 40 percent of the 552 conventional public school districts in Michigan contract for at least one of the three major noninstructional services: food, custodial and transportation. "Survey 2007: More Growth in School Support Service Privatization" found that 16 net new districts chose to contract for at least one support service, a 7.6 percent increase over 2006.

The research was conducted by Daniel J. Smith, an adjunct scholar with the Mackinac Center and a Ph.D. candidate in economics at George Mason University, and Michael D. LaFaive, director of the Mackinac Center’s Morey Fiscal Policy Initiative. "This is the fourth survey in a row to show a net increase in district contracting statewide, which indicates a revealed preference in favor of privatization among many school officials," Smith said. "In addition, nearly 90 percent of districts that privatized these services said they were satisfied with the results."

The survey was completed on June 30, 2007, to coincide with the end of the fiscal year for public schools in Michigan. As of that date, an additional 42 districts were considering privatizing one or more of the food, custodial or transportation services for the 2007-2008 school year.

"Districts across the state are adopting support service privatization as a way to drive more money into the classroom," LaFaive said. "Officials recognize that noninstructional services are ancillary to the mission of their schools. Under a well-written contract, districts can save money, improve services, or both."

New in this year’s survey is a comprehensive breakout of districts that have outsourced one or more of the major noninstructional services since 2006, as well as a tally of contracting by county and by district size. The survey includes a map of every district in Michigan that uses competitive contracting for any of the three major support services.

Custodial services continue to be the top growth area for private contracting. Statewide, 14.5 percent of districts have private firms doing all or part of their janitorial work. The number of districts contracting for custodial work increased by 17, or 26.8 percent, over the 2006 survey, which saw a 26.2 percent increase over 2005. Of the 222 districts that contract for support services, nearly 78 percent report saving money, while 89 percent report being satisfied with their respective contracting experiences.

Food service remains the most frequently outsourced function with 29.7 percent of districts reporting having contracted either management or operation of their program. This is up 3.6 percent since 2006.

Contracting for busing services can be found in 4.3 percent of districts statewide, which is up slightly from 4.0 percent one year ago.

The survey is available at www.mackinac.org/8881. For more information on school privatization in Michigan, visit www.mackinac.org/8691.

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